ENERGY ECONOMICS REVIEW
Year:2011 | Volume:8 | Issue:30|Papers Count:8

Given the importance of looking into economic aspects of greenhouse gas emissions and their environmental effects in the current context of rising volume of greenhouse gas emissions, this study estimates the relationship between carbon dioxide emissions, electricity consumption and economic growth through use of Dynamic Ordinary Least Square (DOLS) method for major emitting countries, included in the Annex (I and II) lists of the Kyoto Protocol during the period between 1990 and 2007. We use the Granger causality test to assess the short and long-term relationship between relevant variables. Estimated long-term values of the model confirm a positive and significant relationship between fossil energy consumption and C02 emissions and a non-linear relationship between C02 emissions and GDP per capita, as per the Environmental Kuznets Curve hypothesis.However, long-term values of test statistics do not confirm relations of causality amongst all the variables. The results rather confirm a unidirectional Granger causality between electricity consumption and C02 emissions and economic growth in the long run. The results also point to the existence of a unidirectional Granger causality between C02 emissions and electricity consumption in the short-term.

Increasing energy efficiency is considered as one of the major instruments for reducing energy use and carbon dioxide emissions. Increasing energy efficiency reduces the cost of energy, and energy services, thus increasing the real income of consumers. The demand of energy and energy services will increase as their prices decrease, hence increasing energy usage. Moreover, increase of real incomes will increase the consumption of other goods. This in turn will further increase energy use. In short, the reduction in the prices of energy and energy services and the increase of real income will lead to lower actual energy saving than the expected energy saving. This phenomenon is known as the "rebound effect" in economic literature. The main purpose of this paper is to estimate the "rebound effect" when assessing impact of increasing energy efficiency on Iranian household consumption and CO2 emission. We assume technological progress to be an exogenous factor.Simulating increased energy efficiency under three different scenarios, we investigate the effect of increasing energy efficiency on household consumption and CO2 emission. In all scenarios, increased energy efficiency causes an increase in the consumption of some goods and a reduction in consumption of other goods. The estimated rebound effect is about 98 percent and this suggests that increasing energy efficiency only reduces energy use and CO2 emission slightly. The results also indicate that the greater the increase in energy efficiency the lower is the rebound effect. It is thus clear that if we are to achieve a noticeable reduction in energy use and CO2 emission, energy efficiency has to be increased in a marked manner.

The American geophysicist M. King Hubbert introduced a logistic equation to estimate the peak and lifetime production for oil of United States in 1956, which became known as the Hubbert peak theory. In this research, by applying system dynamics approach, based on the hubbert theory, we simulate Iran's independent gas reservoirs using the Ithink software. These reservoirs which are independent from oil fields account for 70% of Iran's total gas resources. Therefore analyzing their conditions is important in assessing Iran's future gas supply condition. Our simulation results indicate that depending on factors such as levels of exploration, reservoir leakage, extraction rate and investment, peak production will be reached between Iranian years 1409 and 1430. The base run simulation, which assumes continuation of current trends on above noted parameters produces a peak production level of 2350 million cubic metres of gas in 1412. The simulation exercise indicates the importance of reservoir preservation and extraction patterns on time needed to reach peak production.

We expect energy use to decrease with any increase in its relative price through substitution of other goods for energy. In this process we attach importance to the extent and speed of substitution. In this study we estimate a dynamic and two level (nested) CES production function for manufacturing establishments with ten workers and more on the basis of observations for the period 1346-1386 (1967-2007). The results indicate that, capital and energy have a complementary relationship while labor has a substituting relationship with both capital and energy. The speed of labor substitution to energy (54%) is higher than it is with respect to capital (42%).On the other hand, studying the energy demand determints (energy price and production) in the period before and after the real price increase of various forms of energy, indicates increasing importance of price and reduced influence of production on demand for energy after energy prices were liberalized.We can thus conclude that the increase in energy prices is associated with increasing price and substitution elasticity in the long run, hence leading producers to be more flexible in substituting labor for energy, as a result increasing employment.

Given increased concerns about declining quality of the environment, there is need for consideration of negative impacts of economic activities, when assessing the efficiency and productivity of firms at the individual and macro levels and energy intensive and polluting industries. In this paper we measure the environmental efficiency of Iranian Electric utilities using the non-separable desirable and non-desirable output model. Empirical results indicate that the Azerbaijan and Khorasan Electric utility companies have low performance in terms of both Environmental and traditional efficiency. Although Khuzestan electric utility has high traditional Efficiency, its Environmental Efficiency is low. The results further demonstrate that Gilan has full environmental and traditional efficiency.The Kurskal-wallis test indicates that taking into account co2 Emission as an undesirable output has a significant effect on the efficiency score of all Iranian electric utilities.

While globally there has been a lot of attention paid to increasing energy efficiency following the oil price shock of the 1970' s, oil exporting countries like Iran, benefitting from access to rich energy resources, have not yet done much in this regard. As a result Iran wastes millions of barrels of oil annually due to high energy intensity linked to use of old production structures.This research studies specifically the use of energy in the poultry industry. The study seeks to find a practical solution for the high energy intensity in the Iranian poultry industry through energy conservation to renovate the poultry industry, taking into account suboptimal domestic energy prices and the huge difference between domestic, regional and international energy prices. The study makes use of the two emerging concepts of Energy Service Companies (ESCOs) and Clean Development Mechanism (CDM). The study concludes that renovation of the poultry industry is technically and financially feasible and can pay for itself from savings in energy use.Devising the proposal for funding as a CDM project renders it even more attractive.

Energy has become an important factor in the production function. This paper investigates the relationship between energy consumption and growth in different economic sectors in Iran for the period 1346 to 1386. The study uses co-integration techniques and the vector error correction model. The results confirm a long-run unidirectional causality from electricity consumption to growth in industrial and agricultural value added. There is also a long-run unidirectional causality from gas consumption to increases in value added in industry. In addition, there is unidirectional causality from consumption of oil products to increases in value added of services.

This article attempts to model oil price volatility through use of conditional variance models (GARCH) in the time interval between January 1983 and December 2010. We present an index to measure the uncertainty, using calculated conditional variance parameters. Based on the results obtained, all models used in this study confirm the existence of conditional variance structure for the time series Iranian oil price data.Moreover models such as TARCH& EGARCH were used to assess leverage effects and both models confirmed such leverage effects. The results of GARCH coefficient tests show that in the long run, conditional variance returns to its average level.In addition, the uncertainty index shows a maximal divergence of 8 percent between similar seasons, while all such variances are contained within the domain of between 1 to 8 Percent.