A Decomposition Analysis of CO2 Emissions Related Energy Consumption in Iran

Introduction Carbon Dioxide emissions related to energy consumption is an important challenge for the world economy. According to reports, 84% of the total CO2 emissions in the world are related to energy consumption. Also, 64% of green house gases emissions in the world are CO2 emissions. On the basis of the IEA scenarios (2009), the growth of CO2 emissions related to energy consumption will continue as a result of growing demand for fossil fuels by 2030. The CO2 emissions related to energy consumption increased from 20.9 G.T, in 1990 to 28.8 G.T, in 2007. The forecasts of IEA in 2009 show that the CO2 emissions related to energy consumption will increase to 34.5 G.T, and 40.2 G.T, by 2020 and 2030, respectively. Its implications are that CO2 emissions related to energy consumption will increase on average by 1.5% in the period of 2000-2030, while the other green house gases will increase on average by 0.3%. The Iranian resource-based structure of the economy and the energy-based production system has caused the consumption of fossil fuels and non-fossil fuels to increase. Although the interrelation between energy consumption and green house gases, especially CO2, shows the green house gas emissions will be high in the future. The statistics show that CO2 emissions per capita in Iran have increased from 3.6 T in 1990 to 6.9 T in 2008, while the CO2 emissions per capita decreased in the United States and Europe. Predictions show that the CO2 related to energy consumption will be an important challenge for the economic future in many countries including Iran. Considering the importance of this challenge, several countries have considered decreasing the CO2 emissions by the definition of policy tools. To achieve this goal, knowing the structure of CO2 emissions related to energy consumption is required. In the present research, the structure of CO2 emissions related to energy consumption at the macroeconomic and sectoral levels is considered. Materials and MethodsThe theoretical evidence shows that there is a relationship between energy consumption, CO2 emissions and economic growth. The structure of these relations depends on the economic structure and economic development stages of the countries in question. The empirical evidence has not been considered as demonstrating the structure of the relationship between energy consumption, CO2 emissions and economic growth.Review of the economic literature verifies the relationship between energy consumption, CO2 emissions and economic growth. However, this relationship has been affected by other factors such as population, composition of fuels consumed, and the carbon contents of the fuels being consumed. It is noteworthy that most studies have not paid attention to these factors. Considering the importance of this subject for gaining knowledge about the CO2 emissions structure and the importance of using policy tools, in this paper CO2 emissions structure using the Index Decomposition approach was studied.