Iranian Energy Economics

Examining the Impact of Renewable Energy Consumption Shock on the Circular Economy in Iran

Articles in Press

Document Type : Research Paper

Authors

fateh habibi 1
Mohammad Parsa Ehterami 2

1 Department of Economics, University of Kurdistan, sanandaj, Iran

2 department of Economics, University of Kurdistan, sanandaj, Iran

10.22054/jiee.2026.91017.2190
Abstract
This study examined the asymmetric effects of positive and negative changes in renewable energy consumption on circular economy performance in Iran from 1990 to 2020. Data for seven variables—including recycled energy from biomass and waste, renewable energy consumption, GDP growth, industrialization, urbanization, population density, and carbon emissions—were collected for the period. The nonlinear autoregressive distributed lag (NARDL) method was used to analyze short-run and long-run relationships, while the fully modified ordinary least squares (FMOLS) method confirmed the stability of long-run relationships. Findings from both methods showed complete alignment in the direction and significance of variables. Carbon emissions, urbanization, and negative changes in renewable energy consumption had a negative and significant effect on the circular economy, whereas positive changes demonstrated a considerable reinforcing effect. Population density and industrialization approached statistical significance, but GDP growth showed no significant effect. In the short run, the circular economy responded quickly and positively to positive renewable energy changes, while urbanization and carbon emissions exhibited dual effects. Based on the results, sustainable investment in renewable energy, development of urban green infrastructure, and reform of pollution control policies were identified as the most critical strategies for strengthening Iran's circular economy.

Keywords

renewable energy consumption
Circular economy
Nonlinear autoregressive distributed lag model
Fully modified ordinary least squares model
Iran
Subjects
Iranian Energy Economics

Articles in Press, Accepted Manuscript
Available Online from 05 October 2026

  • Receive Date 26 January 2026
  • Revise Date 09 September 2026
  • Accept Date 05 October 2026
  • First Publish Date 05 October 2026
  • Publish Date 05 October 2026

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