Modeling the Effect of Energy Intensity Changes in Industrial Sector on the Economic and Environmental Indices: A System Dynamics Approach

In this study، we designed and simulated a system dynamic model to analyze the impacts of energy intensity changes on environmental and economic indicators in Iran. Results show that if the current situation is continued، the industrial sector energy intensity will increase from 2. 67 in the base year to 2. 704 at the end of planning horizon. So، the sector will consume 540 million oil barrels to create a value added equals 490627 billion Rials in 2025. Accordingly، the amount of environmental pollutants will increase from 59 million tons in the first year to 267 million tons in 2025 and social costs of producing this pollution would be equal to 67، 449 billion Rials. These findings indicate that regarding the limitation of the production and the increasing costs of energy supply in the future، the country''s industrial policies should concentrate on technological changes to increase the efficiency of energy consumption. Also، results indicate that industrial energy consumption has destructive effects on the environment and society in the future and the costs in this sector will not be reversible.