Institutional and Structural Barriers to Iranian Industrial Energy Efficiency: Policy Implications from a Stochastic Frontier Analysis
نویسندگان
1 Baft Higher Education Center, Shahid Bahonar University of Kerman, Kerman, Iran
2 Department of Agricultural Economics, Agricultural Faculty, University of Torbat Heydarieh, Torbat Heydarieh, Iran
doi
10.22097/eeer.2026.573320.1399چکیده
In fossil-fuel-dependent less developed economies, persistent industrial energy inefficiencies significantly undermine both sustainable economic growth and climate-mitigation objectives. This study explores the institutional and structural determinants of energy inefficiency in Iran’s industrial sector using Stochastic Frontier Analysis (SFA), a method that isolates inefficiency from random noise. Based on provincial data spanning 2012–2023, we estimate energy efficiency scores and identify factors associated with inefficiency. The results reveal substantial regional disparities, with over half of the provinces scoring below the national average efficiency (mean= 0.7883), indicating an annual energy-saving potential equivalent to 739,358 tons of crude oil. Key inefficiency factors include ownership structure, market structure, and workforce education gaps. Our findings inform a policy framework for reforming industrial sectors, emphasizing: (1) targeted privatization incentives; (2) investment in vocational training; and (3) the promotion of energy-efficiency cooperatives among SMEs to leverage scale benefits, advancing progress toward SDG 7 and net-zero transitions in Iran and other emerging economies facing similar institutional and market distortions.
