Document Type : Research Paper

Authors

• Mahnaz Rezazadeh ¹
• Saeed Daei-Karimzadeh ²
• Shahram Moeeni ³

¹ PhD student in Economic Sciences, Islamic Azad University, Isfahan (Khorasgan) Branch, Isfahan, Iran

² .Associate Professor, Department of Economic Sciences, Islamic Azad University, Isfahan (Khorasgan) Branch, Isfahan, Iran.

³ Assistant Professor, Department of Economics, University of Isfahan, Isfahan, Iran.

Abstract

Energy security and environmental sustainability have been identified as key economic challenges in recent years. Most countries have shown a strong interest in achieving significant economic development through the development of exports and its diversification, and gradually the share of innovative produced goods and services in total exports surpassed traditional exports. This change in the export pattern may change energy needs because the energy needed to produce new and industrial products (such as spacecraft, electrical equipment, telecommunication equipment, and..) is relatively higher. The exports diversification is a trade indicator and can play a role in encouraging the consumption of renewable energy. In this paper, the impact of diversification export, extensive export margin and intensive export margin as determinants of renewable energies, using the CS-ARDL model in countries with natural resource rents during the period of 2000-2020 has been investigated. The results of the study in the estimation of the first model show that the increase in export diversification has a positive effect on the consumption of clean energy, and the increased export diversification generally increases the consumption of these energies. Also, the estimation results of the second model indicate that the extensive export margin, which emphasizes the export of new products, has a positive and significant effect on the ratio of clean energy consumption, but the intensive export margin, which emphasizes the development of traditional trade, has a negative significant effect. It has a ratio of clean energy consumption.
 
Introduction
Energy demand and its determinants have been controversial in the energy economics literature. Since the 19th century, global energy demand has increased by 2.5% per year. On the other hand, the consumption of non-renewable energy is a factor in environmental degradation and can trigger climate change, which becomes a serious threat to sustainable growth (Kaygosuz, 2007). The rapid increase in energy intensity in many industries may cause the depletion of fossil resources, so experts warn that with the current energy consumption, non-renewable energy resources will probably end by 2040 (Bielska et al. cited in Asgari et al.2023).
One of the important factors affecting energy demand is international trade, which, according to empirical evidence, energy demand, in addition to trade volume, is strongly dependent on the composition of countries' export baskets in terms of export diversity (Shehzad et al., 2021a). Export diversification is intended to increase the number of exported goods and reduce dependence on a single source of income. The more diversified a region's economy is, the less sensitive it is to fluctuations (Nasiri and Nunezhad, 2020). Export diversification can generate economic benefits through two channels: product diversification or partner diversification (Shehzad et al., 2021b). The International Monetary Fund and the World Bank recommend that developing and emerging economies adopt export diversification strategies to reduce dependence on specific exports and generate sustainable income. Export-related policies for developing and developed economies may conflict with sustainable development goals and environmental protection goals. This leads researchers to ask whether such trade strategies are good or bad for the environment and cleaner energy production. And this is because export diversification is closely related to energy consumption and the overall energy mix, while most developing and developed economies consume abundant fossil fuels and non-renewable energies (Shahbaz et al., 2019). Therefore, given the aforementioned conditions, it was necessary to investigate whether do developing countries that have high natural resource rents in their economies and relatively free energy have an incentive to use renewable energies by diversifying exports? And under what conditions, can these countries clean  the  decrease or increase of energy consumption?
Methods and Material
In this study, information was collected using the library document method, using books, articles, theses, and databases to collect literature and statistical data. Theoretical foundations and research literature were collected using a data mining tool, and in order to obtain statistical data related to the indicators, the World Bank database and international institutions and organizations such as the IMF and the UNCTAD database were used. This article, as the first study, examines the effect of export diversification on renewable energy demand in developing countries with oil exports and medium to high pollution, including Iran, Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Nigeria, Kazakhstan, Mexico, Colombia, Algeria, Qatar, Malaysia, Gabon, Egypt, and Indonesia, along with other control variables, during the period 2000-2020, using the CS-ARDL model.To test the aforementioned relationship, following the model presented in the study by Sharma et al. (2021, b), the following models were used:
 
(1)                   
 
 
 
(2)                        
 
 
Results and Discussion
As mentioned, two models were used to examine the effect of export diversification on renewable energy consumption. In the first model, the effect of export diversity, economic growth, degree of openness, natural resource rent, and research and development variables on renewable energy consumption were examined, and in the second model, the effect of broad and narrow export margins was analyzed. Based on the results of the first model and in the long run, the export diversity variable of the selected countries has had a positive effect on the consumption of renewable energy, and in other words, with increasing export diversity, the consumption of renewable energy has increased. Therefore, export diversity and its growth have reduced the use of fossil fuels and increased the proportion of renewable energy use. Also, economic growth has had a positive and significant effect on the consumption of renewable energy. Another variable is natural resource rent, which is significant, and an increase in natural resource rent reduces the consumption of renewable energy. Finally, the results related to the research and development variable indicate that this variable has had a positive effect on the consumption of renewable energy.
After estimating the second model and with the presence of extensive and intensive margin indicators in the long run, the coefficient of the extensive export margin variable has the necessary significance and its coefficient has become positive. Therefore, for the extensive margin variable, which in a way emphasizes the expansion of trade through the development of new export markets, the effect of the variable on the consumption of new energies has increased. Also, the coefficient of the intensive export margin variable has the necessary significance, but this coefficient has become negative and in a way emphasizes that the increase in the intensive margin has reduced the proportion of renewable fuel consumption. However, the reason for the negative effect of the intensive export margin on the consumption of renewable fuels is that because these countries have high natural resource rents, as a result, the development of exports of these countries to their traditional destinations mainly includes figures related to these resources, and since exports related to these products, including petrochemical, oil and gas products, in a way require a large consumption of fossil fuels, as a result, it has increased the proportion of fossil fuel consumption. The degree of openness has the necessary significance and its coefficient has also become positive, and in other words, with increasing integration in the global economy, the proportion of clean fuels has increased. Also, the coefficient of the natural resource rent variable has also been significant and its coefficient has also become negative, in other words, with the increase in the ratio of natural resource rent in the economy, the use of clean fuels has decreased. Also, the increase in clean energy with a short-term break has been able to improve the ratio of clean energy use in the economy. The variable of investment in research and development has also been significant. The coefficient of this variable has also been positive, in other words, with the increase in the ratio of research and development, the use of fossil fuels has decreased and the use of clean fuels has increased.
Conclusion
In general, the sustainable development literature emphasizes that different countries, while developing their exports and economic growth, should be sensitive to the relationship between these variables due to the importance of the environment, because perhaps in the short term this growth and diversification of exports can improve welfare, but in the long term it will reduce the welfare of the people of the society through environmental problems. Accordingly, and according to the estimated results of this study, the export development of countries with natural resource rents has greatly increased the consumption of fossil fuels in this group of countries, and this can affect economic growth and export development in these countries in the future, and especially the consequences of that growth will confront society with environmental and health problems. Another point that is clearly visible in the results of the studies is the effects of technological development on the development of clean and renewable fuels, which the results of this study emphasize in both the short and long term. Also, the degree of openness, which shows the degree of economic integration of a country and to some extent emphasizes the development of trade, has caused a decrease in the proportion of fossil fuel consumption. Based on the results and as observed, trade development based on trade growth through traditional trade has had a negative impact on the proportion of renewable energy consumption in the long term and in a way emphasizes that the development of traditional trade, since it is related to natural resource rents and especially cheap energy rents, has ultimately increased the consumption of fossil fuels. However, changing this indicator to a wide margin, which is in a way an emphasis on the development of new export markets and distancing from traditional trade, and since the conquest and development of new markets requires the development of new knowledge and technology, the impact of this indicator in the long term has increased the proportion of clean fuel consumption. Therefore, and finally, it seems that in countries, especially with oil rents and natural resources, and due to the dependence of their competitive advantage in exports on the consumption of fossil fuels, in practice the development of exports and ultimately economic growth will lead to increased destruction of the environment and natural resources, and as mentioned in previous studies in this field, the path to sustainable development and sustainable export development in these countries will pass through the path of technological development, and through this path the consumption of clean fuels will also increase.
Acknowledgments
With due appreciation and thanks to the learned and wise professors who helped me in writing this article, as well as my dear family who supported me financially and spiritually.

Keywords

• Diversification Exports
• Extensive Export Margin
• Intensive Export Margin
• Renewable Energy
• CS-ARDL Model

Main Subjects

• مطالعات اقتصادی مرتبط با حامل‌های انرژی (فسیلی، تجدیدپذیر و برق)