Comparison of the role of Renewable and Non- Renewable energies in economic growth and sustainable development (Case study of IRAN)

Document Type : Original Article

Author

Phd Student of economics, Islamic Azad University, Kerman branch, Kerman, Iran

Abstract

Abstract
In the most past studies, the relationship between energy consumption and gross domestic product represented economic growth has investigated. GDP not only takes in to account the environmental issues but also ignores the social variables. So. In this study, using the index of sustained economic welfare that in addition to economic aspects, includes the Intergenerational social welfare, the relationship among renewable energy, un-renewable energy and ISEW with ARDL BOUND testing model for IRAN is investigated, The results are then compared with the effect of energy types consumption on GDP. The results expressed that the un-renewable energy consumption
have positive effect on GDP and ISEW In the long-run. Also, the renewable energy consumption has a negative effect on ISEW, while causing the economic growth of the country.

Introduction
Development is a process in which the economic growth and welfare of society is continuously and steadily increasing, and in addition to the short-term benefits and welfare of the present generation, the long-term benefits and welfare of future generations are taken into account. To study the concept of sustainable development on a large scale that includes all social and economic variables, it is necessary to use an index that also takes into account the economic aspects, the environmental aspect and the level of social welfare. The GDP index is one of the most important indicators of economic growth and development. Now, despite achieving the concept of economic growth, does the GDP index include the welfare of present and future generations? Also, do they include costs such as the destruction of natural resources, environmental and social costs that are related to the concept of sustainable development of a country?
Another noteworthy point is that increasing the consumption of conventional (non-renewable) energy, despite leading to economic development in the short term (Afenso et al., 2017), due to the finite nature of this type of energy and the destructive effects of the environment, it will cause great damage to the interests of future generations. Now the main question of the present study is whether the consumption of this type of energy leads to sustainable development or long-term economic development and ensures the welfare of the interests of the next generation in less developed countries? Given that energy consumption is one of the important prerequisites for achieving sustainable development, is there a way to reduce the challenges posed by the production and consumption of fossil fuels?
To reduce the damage caused by energy consumption of non-renewable resources and achieve sustainable development, solutions can be used, including the proper use of this type of energy through culture, education and raising awareness and awareness of the community about energy consumption and the use of clean energy and Infinite, including sources of solar, nuclear, wind, etc., which, by producing energy consumption, make it possible to replace non-renewable sources. This study introduces the ISEW, which takes into account all aspects of economic, energy, environmental, as well as the social welfare of individuals in the present and future generations. Unlike previous studies in which environmental hazards such as air pollution are not considered, in this study, using the sustainable economic welfare index, the role of long-term and short-term effects of non-renewable and renewable energy consumption is examined and according to short-term and long-term effects From these resources on the sustainable economic development index, appropriate scenarios for the optimal use of these resources in the production and consumption process should be introduced.

Methodology
GDP index is a measure of economic growth and has been used as a substitute for economic growth (Azadegan Jahromi, 2012). Gross domestic product (ie, buying and spending on consumer goods, including durable and non-durable goods), investment (flow of demand and use of surplus goods to produce more wealth and more profit), government spending (Government expenditures are calculated for goods and services produced this year) and net exports (difference between exports of goods and services and imports of goods and services) (Rahmani, 2001) and the Index of Sustainable Economic Welfare, as defined by Dali and Cobb in 1989, is the only indicator that includes the use of natural resources of each country and the level of economic well-being. (Marquis et al., 2017). Although the welfare of communities is very important in this index, but items such as noise costs, crime rates, social costs resulting from divorce or accidents, etc. have been omitted due to unreliable standard statistics.
In this study, using the GDP index and using the ISEW, which is obtained from the algebraic sum of economic, environmental and social variables, an attempt is made to find a clear way to influence the consumption of renewable and non-renewable energy in the Iranian economy. Explained in the short and long term to achieve the goal of sustainable development. In this study, first the normality and significance of the variables, the absence of serial correlation and the same variance that are classical hypotheses were investigated, then the self-return boundary test with distributional intervals introduced by Boys et al. (2001) was used to achieve Long-term and short-term relationships are used between the studied variables.

Conclusion
According to the results obtained from model estimation, non-renewable energy consumption in the long run has a positive effect on Iran's sustainable development economy and also the effect of this type of energy consumption on long-term economic growth in the target countries; While the effect of non-renewable energy consumption on sustainable economic welfare is 2.075 percent and on economic growth is 1988; As a result, the effect of non-renewable energy consumption in this country on sustainable economic prosperity is greater than economic growth; Also, according to the results, the effect of non-renewable energy consumption and renewable energy have a positive effect on economic growth, which is the coefficient of effectiveness of non-renewable energy consumption 0.1988 and the coefficient of effectiveness of renewable energy consumption is 0.1948. Therefore, despite the disadvantages of non-renewable energy, the effect of this type of energy on economic growth and sustainable economic prosperity is greater than renewable energy.

Keywords
Index of sustainable economic welfare; Economic growth; Un-Renewable energy; Renewable energy; Auto regressive distributed lag.

Keywords