Energy Intensity in Iran: Examining the Threshold Effects of Economic Structure and Trade

Document Type : Original Article

Authors

1 Department of Economics and Accounting, Faculty of Management and Economics, University of Guilan

2 Department of Theoretical Economics, Faculty of Economic and Administrative Sciences, University of Mazandaran

3 M.A. Student in Economics, Faculty of Management and Economics, University of Guilan

10.22080/jeem.2025.28316.1022

Abstract

The issue of optimizing energy consumption is a long-standing concern in developing economies. This study examines the effects of two key factors, namely economic structure and degree of trade openness, on energy consumption intensity in Iran. Going beyond linear analyses, a threshold econometric model is used to examine nonlinear relationships. This model identifies how different levels of energy intensity affect the patterns of influence of macroeconomic variables. Based on time series data of the Iranian economy (1973-1979), the results show that at low levels of energy intensity, both industrialization and trade openness significantly reduced energy consumption intensity. However, at high levels of energy intensity, industrial development increased energy intensity and trade openness no longer had a significant effect. In addition, studies show that the phenomenon of energy waste has had a positive and significant effect on current energy consumption at both levels. These findings emphasize the existence of nonlinear and variable relationships in the impact of economic variables on energy consumption intensity. Therefore, adopting integrated policies without considering the conditions of different levels of energy consumption intensity cannot be a solution. By explaining these relationships, this research paves the way for formulating targeted policies to reduce energy consumption intensity and achieve sustainable development in the Iranian economy.

Keywords

Journal of Energy Economics Modeling
Volume 2, Issue 1
October 2024

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History

  • Receive Date: 30 December 2024
  • Revise Date: 10 April 2025
  • Accept Date: 12 April 2025
  • Publish Date: 22 September 2024

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