Abstract
Energy has been heavily subsidized in Iranian economy for decades. Due to low oil prices, and, thus, budget limit, fossil fuel prices are under gradual liberalization. This will result in higher cost of production in all fuel consuming activities including agriculture. So it seems that farmers will plan to substitute fossil fuels by non-fossil alternatives. This study aims at modeling and prediction of energy demand (as a key factor of production) in Iranian agriculture. Box–Jenkins methodology is applied to model agricultural consumption of four major sources of energy including: gasoline, kerosene, gasoil and electricity for the period spanning from 1988 to 2014. Also same data are predicted for 2015–2026 in order to check model adequacy and provide information regarding status of energy demand in Iranian agriculture in the future. Main results indicate a downward trend in consumption of four energy types except electricity which is predicted to go up. This implies that, as far as energy consumption is concerned, Iranian agriculture is approaching to a more sustainable situation. Rearrangement of fuel price support policy from nonrenewable to renewable sources and provision of more governmental support for switching to lower-carbon and environment-friendly energy sources is recommended.
Highlights
Energy demand forecasting is crucial for energy planning, formulating strategies and recommending energy policies (Bhattacharyya and Timilsina, 2009)
Econometric methods of forecasting, in the context of energy demand forecasting, can be described as the science and art of specification, estimation, testing and evaluation of models of economic processes that drive the demand for fuels (Meetamehra, 2009)
Econometric approaches of forecasting, in the context of energy demand modeling, can be characterized as ‘the science and art of specification, estimation, testing and evaluation of models of economic processes’ that drive the demand for fuels
Summary
Energy demand forecasting is crucial for energy planning, formulating strategies and recommending energy policies (Bhattacharyya and Timilsina, 2009). In conventional terms, demanding more energy implies a more tight dependence on fossil fuels like natural gas and oil which are, left with limited reserves and release greenhouse gases which are harmful to the environment and the global climate change. All these reasons force countries to adopt new sustainable energy policies, and to find alternative ways to balance the energy demand in most efficient, cheapest and strategic way (Oguz, 2013). The agriculture sector has at its core the production process for foodstuff (e.g., grains, fruits and vegetables, meat, fish, poultry, and milk), and non-food vegetable products of economic value (e.g., tobacco, jute, hemp). Any measure that will reduce the fossil energy consumption while delivering the food service is in principle a potential candidate for analysis as a way of greenhouse gas (GHG) mitigation option (Sathaye and Meyers, 1995)
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