Zohreh Salimian; fatemeh Bazzazan; Mirhossein Mousavi
Abstract
Energy-intensive industries in Iran are responsible for a significant share of energy consumption, especially oil products. Therefore, there is a major focus on promoting energy efficiency in such industries. Energy efficiency improvement results in rebound and backfire effects. In this paper we estimate ...
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Energy-intensive industries in Iran are responsible for a significant share of energy consumption, especially oil products. Therefore, there is a major focus on promoting energy efficiency in such industries. Energy efficiency improvement results in rebound and backfire effects. In this paper we estimate the effects of fuel oil efficiency improvement in energy intensive industries based on intertemporal general equilibrium model. Simulation for long run period is done for two scenarios, including 3.1% efficiency improvement in energy intensive industries and all sectors of economy. Results show that the rebound effects in chemical industry, food and beverage, basic metal, paper, Rubber and plastic, non- metallic minerals, and wood industries leads to rebound effects in the first scenario. In the long-run, backfire effects are seen in the second scenario in which efficiency improvements for all sectors is considered. In addition, efficiency improvement will result in production cost decrease. Chemical and non- metallic mineral industries experiencing the most decreases of production cost around 1.1% and 0.7%, respectively.
Fatemeh Bazzazan; Mir Hosien Mousavi; Farnaz Gheshmi
Abstract
The continuous growth of electricity consumption in Iran, due to the low and unreasonable prices, has created immense pressure on the national network of supplying electricity to meet the ever-increasing demand. The realistic and economically justifiable pricing of electricity has, therefore, become ...
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The continuous growth of electricity consumption in Iran, due to the low and unreasonable prices, has created immense pressure on the national network of supplying electricity to meet the ever-increasing demand. The realistic and economically justifiable pricing of electricity has, therefore, become an urgent issue for managing supply and demand. The residential electricity consumption in the country is one of the main sources of such demand increase. The present study focuses on the impacts of government subsidies on electricity demand and consumption for the urban and rural households in Iran. Data used for this study include price index, urban and rural household expenditures, provided by the Iranian Center for Statistics, Central Bank of Iran during the period 1991-2012. The study utilizes Almost Ideal Demand System (AIDS) and Seemingly Unrelated Regression (SUR) estimation methods for data analyses. The results show that electricity is an essential good for both urban and rural households, and as such the demand and consumption levels for both urban and rural households in the country have very little (less than one) elasticity to prices. The conclusion is that the demand levels for residential electricity consumption are not meaningfully reduced by the price increase for customers created by elimination or reductions of governmental subsidies for electricity. Therefore, pricing policies alone would not be effective to reduce residential electricity consumption in the country, and there is a need for additional and supplemental policies.
