Abstract
This study examines the relationship between economic growth, renewable energy consumption, and carbon emissions in Iran between 1975-2017, and the bounds testing approach to cointegration and the asymmetric method was used in this study. The results reveal that in the long run increase in renewable energy consumption and CO2 emissions causes an increase in real GDP per capita. Meanwhile, the decrease in renewable energy has the same effect, but GDP per capita reacts more strongly to the rise in renewable energy than the decline. Besides, in the long run, a reduction of CO2 emissions has an insignificant impact on GDP per capita. Furthermore, the results from asymmetric tests suggest that reducing CO2 emissions and renewable energy consumption do not have an essential role in decreasing growth in the short run. In contrast, an increase in renewable energy consumption and CO2 emissions do contribute to boosting the growth. These results may be attributable to the less renewable energy in the energy portfolio of Iran. Additionally, the coefficients on capital and labor are statistically significant, and we discuss the economic implications of the results and propose specific policy recommendations.
Highlights
Energy is considered an essential source of any country’s socio-economic development and an important key to strengthening all aspects of the country’s economy
This study empirically investigates the link between CO2 emissions, economic growth, and renewable energy consumption in Iran
In the case of renewable energy consumption, the findings revealed that the growth hypothesis has only been confirmed for Peru; the conservation hypothesis was endorsed for Thailand and Colombia; the feedback hypothesis for South Korea and Greece was identified, and the neutrality hypothesis was relevant for the other 12 emerging economies
Summary
Energy is considered an essential source of any country’s socio-economic development and an important key to strengthening all aspects of the country’s economy. The change in energy consumption from renewable and non-renewable sources in Iran has followed an exciting trend over the past few decades. This continually addresses the rise in air pollution and inadequate future energy sources. One of the aims of studying energy consumption may be to determine whether the causality pattern between economic growth and renewable energy differs from economic growth and non-renewable energy This kind of diversity is needed among research work on energy growth. This study empirically investigates the link between CO2 emissions, economic growth, and renewable energy consumption in Iran. The relationship between renewable energy consumption, CO2 emissions, and Iran’s economic growth has not been previously studied to the best of our knowledge.
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