Investigation of Interrelationship between Renewable Energy- Sustainable Development- Co2 Emmision in Iran: Bayesian VAR Approach

Due to the limitation of fossil energy resources and problems caused by greenhouse gas emissions, it is essential to focus on renewable energy resources, because it can be used to achieve sustainable development goals. Thus, the purpose of this research is to investigate relations among renewable energy, CO2 emissions and sustainable development and compared to non-renewable energy in Iran. 

In this study, dynamic interrelationships in the sustainable development-energy- CO2 emissions nexus is examined by applying bayesian vector autoregression (BVAR) in Iran over the period 1980-2013. Gross Domestic Product (GDP) is the indicator commonly used to measure economic growth and sustainable development, but this indicator is inefficient for evaluating development. One of the most prominent alternative indicators for sustainable development is the Index of Genuine Savings (GS). For this purpose, in this study GS is used as an indicator of sustainable development.

Results reveal that the impact of creating positive shock on renewable and non-renewable energy consumption on sustainable development in Iran is positive. Also, positive shock on renewable and non-renewable energy consumption causes an increase in CO2 emission. Moreover, the impact of an increase in sustainable development is positive on renewable energy consumption and is negative on non-renewable energy consumption.

 Discussion and Conclusion

It is suggested that policy makers prioritize the promotion of energy supply diversification policies, especially renewable energy.