An Analysis of Energy Productivity Shocks on CO2 Emissions in the Main conomic Sectors of Iranian Economy with Panel-VAR Approach

The purpose of this paper is to investigate the relationship between CO2 emissions and energy productivity as an index of energy consumption, alongside the other explanatory factors in Iranian economic sectors (industry, transportation and agriculture) in the period of 1376-1394. To achieve this objective, we have used a Panel-VAR multivariable model including the intensity of CO2 emissions, energy productivity, labor power and capital, energy carriers’ price increase, sectoral value added, and the cost of research and development in selected sectors. This model is then used to test the effect of lagged variables on CO2 emissions. In addition, we have used the impulse-response approach to determine the share of shocks in changes of CO2 emission for the short, medium, and long-terms. The results indicate the shocks of energy productivity have negative and significant effect on the intensity of CO2 emissions.