Relation of Foreign Trade Expansion and Energy Intensity in Iran Economy with Emphasis on Scale, Composite and Technical Effects

Expansion of foreign trade has important effects on energy intensity based on the structural conditions and economic nature of countries. In the present research the scale effect (the economy volume changing), the composite effect (the structure of economic activities changing) and the technical effect (productivity changing) resulting from the trade on the energy intensity of Iran economy, as one of the important economic-environmental indicators is investigated. For this purpose the empirical model of the research according to the economic theories by using the structural vector autoregression in 1353-1392 is modeled. The results of the model show that the trade expansion have positive scale and composite effects but negative technical effect on the energy intensity of Iran. Also the size of technical effect is bigger than the resultant of the two other effects. Therefore according to the results, increasing the volume of foreign trade has not energy intensive effect and there is evidence that energy intensity decreases from the total factors productivity channel (as an indicator of technical changes). Therefore the expansion of foreign trade in Iran is considered energy saving.