Economic Research and Perspectives

Economic Research and Perspectives

Natural Disasters and Energy Security in Iran

Authors
parvin alimoradi afshar 1
vahid azizi 2
Somayeh fatehi 3
1 Assistant Professor of Economics, Department of Economic Sciences, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran
2 M.A. Student in Theoretical Economics, Department of Economic Sciences, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran
3 . M.A. Student in Energy Economics, Department of Economic Sciences, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran
10.22034/24.3.31
Abstract
Introduction

In recent years, economic development and public welfare are not possible without reliable and sustainable energy sources. Therefore, providing energy security is one of the basic priorities of every society and government. On the other hand, energy security is closely related to human life and productive activities and is strongly related to the increase in the number of extreme natural events in the past decades. Natural disasters can have different effects on energy consumption depending on the type of disaster and the desired energy source. Emergency food products can be useful for disaster situations, and carbon absorption is one of the solutions that can greatly reduce greenhouse gas emissions. The search for better energy performance of buildings and the using alternative sources of energy along with the rationalization of energy consumption can be directly related to reducing emission levels in the atmosphere and alleviating detrimental impacts on the environment. However, the transition to renewable energy sources requires careful planning and implementation to ensure energy security and prevent negative environmental effects, natural disasters also have significant implications for energy security, extreme weather events such as droughts and floods can affect the availability and reliability of energy resources, especially hydropower. Therefore, it is crucially important to consider the potential effects of climate change on energy systems and to develop adaptation strategies for ensuring energy security. Therefore, dealing with climate change and energy security are two critical challenges of any society today. Transitioning to renewable energy sources can reduce climate change, but requires careful planning and implementation to ensure energy security. In addition, it is vital to consider the potential impacts of climate change on energy systems and develop adaptation strategies to ensure energy security. Therefore, dealing with and managing severe natural disasters is necessary to ensure and manage energy security. Therefore, considering the importance of energy security on the one hand and limited research on the other to depict the impact of extreme natural events on energy security is of paramount importance. Therefore, considering the increasing frequency of natural disasters and energy security, how natural disasters affect energy security needs to be debated which has rarely been addressed yet. So, the aim of this research is to fill this theoretical gap so that the impact of severe natural hazards on energy security from a theoretical point of view to be investigated and solutions for diminishing the impact of natural disasters on energy security proposed.

Methodology

In this research, due to the fact that the degree of significance of all research variables was of the first order and with the difference of the first order of significance, to estimate the research model, it is possible to use co-accumulation methods to avoid creating false regression and misleading results. In econometric literature, various methods are introduced to check the existence of long-term relationship between variables. Therefore, this research uses Fully Modified Least Squares (FMOLS) cointegration method to estimate the research model. The fully modified least squares method by Phillips and Hansen (1990) to examine long-run relationships and estimate a co-integrated relationship that has a combination of I(1) was introduced and developed. This method uses a quasi-parametric correction to eliminate problems caused by long-term correlation between co-accumulation equations and changes in random variables. Characteristics of this estimator; They are highly consistent and asymptotically distributed normally without skew and provide better results in small samples. It also provides modified standard deviation that allows statistical inferences to be made. In fact, the fully modified least squares method applies two corrections of distortion and endogeneity to the ordinary least squares method. On the other hand, the FMOLS method is not affected by the length of the interval and is asymptotically unbiased and has a fully efficient combination of asymptotes when all variables are endogenous. In fact, by means of this method, an optimal estimate of the cointegration vector can be estimated.

Findings

In this study, for the first time, the effect of severe natural disasters on the risk of energy security in Iran during the period (1980-2018) have been examined. To estimate the model, fully modified least squares (FMOLS) method was used. According to the variable results, severe natural disasters have a negative and significant effect on energy security in Iran, which is in agreement with the results of the research by Qiu et al. (2023), Lee et al. (2021), Rakshit (2021), Wei et al. 2022). Open degree index without trade has a negative and significant effect on energy security during the studied period, which confirms the results of Qiu et al. (2023), Wei et al. (2023) and Lee and Park (2021) studies. The industrialization index has a positive and significant effect on energy security in Iran, and the results of this section agree with the results of Qiu et al. (2023) research. The growth rate of urbanization also has a positive and significant effect on energy security during the studied period, which rejects the results of Qiu et al. (2023) study. Technological innovation has a positive and significant effect on energy security. Financial development had no significant effect on energy security. The GDP variable has a negative and significant effect on energy security. The results of this section are contrary to the research results of Qiu et al. (2023) and Lee and Park (2021) and are consistent with the research results of Wei et al. (2023).

Discussion and Conclusion

Natural disasters are an inevitable part of life that threaten different aspects of human life. Natural disasters may create some long-term social, economic and environmental trends in the society, whose effects have economic consequences for the country for decades. The position of natural disasters and its effect on other variables in a disaster-prone country like Iran should be given special attention. Natural disasters should be a gateway to a scientific, strategic and accurate look at these events and their social, political and economic consequences. Increased investment in infrastructure and mechanisms related to crisis prevention and management, and serious attention should be paid to basic indicators such as trust and political legitimacy to facilitate the functioning of the government in crisis conditions. The results of this study show that policy makers should pay enough attention to natural environment, especially natural disasters in planning agenda to improve energy security so that appropriate policy interventions can help deminish the impact of extreme natural events on energy security.

Policy recommendations

Paying attention to environmental issues to face natural disasters has become public knowledge in different societies. In terms of energy security, the following recommendations are suggested for Iran which is located in a dry and semi-arid climate and faces serious limitations:

Providing sufficient credits by promoting cooperation with international organizations. Lack of credits is one of the main obstacles to the implementation of legal articles approved in the development programs and advancing the goals set in the field of environmental issues of the country.
Adopting the approach of comprehensive and integrated management of the environment. In Iran varied organizations and institutions are involved with the environmental issues and none are fully responsible for it. Environmental Protection Organization, Forests and Ranges and Watershed Organization, Water Department of the Ministry of Energy, and the Iranian Fisheries Organization are each responsible for a part of environmental concerns with no mechanism for coordination between them.
Promotion of culture and environmental literacy of society to strengthen the spirit of cooperation of citizens with environmental policies.

Application of greenhouse gas emission management policies in the country.
Keywords
Energy Security
Natural Disasters
Fully Modified Least Squares

Subjects

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Economic Research and Perspectives
Volume 24, Issue 3
Autumn 2024
Pages 31-60