Document Type : Research Paper
Authors
alzahra university
Abstract
Flaring is a phenomenon that exists in most oil-producing countries and refers to the gases associated with oil that are produced during oil extraction and are not collected or utilized for various reasons. The present study examines the impact of flaring, along with other explanatory variables, on Iran's per capita GDP during the period 1366-1402 using the ARDL method. The results of the model estimation, while confirming the existence of a cointegration relationship between the variables, show that in the long term, the impact of flaring on GDP per capita is positive and significant (with a coefficient of 0.58). A review of foreign studies in this field reveals differences in findings, with some studies showing a positive coefficient and some showing a negative coefficient. The present study shows a positive coefficient for flaring in Iran. The positive coefficient may be surprising at first glance, but it is theoretically justifiable (which is explained in the theoretical foundations section of the paper). Furthermore, in an oil economy like Iran, given that there is a positive correlation between oil production and GDP, and since flaring is a side effect of oil production, this positive relationship is to be expected. At the same time, it can be stated that the increase in revenues resulting from the high volume of oil production is sufficiently compensating for the expected decrease in revenues (due to flaring).
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