Back to origins?: economic sanctions and shifts in primary energy consumption of the targeted states

Official URL: http://risc01.sabanciuniv.edu/record=b1819770 (Table of Contents)

This paper explores the relationship between economic sanctions and total primary energy consumption of the targeted states. Iran and Panama serve as illustrative cases to depict the mechanisms by which this association exists. This study utilizes the interrupted time series across the individual cases of Iran and Panama over the period from 1975 till 2004. Since targeted countries tend to hide the real effects of economic sanctions, the total primary energy consumption trends comprise an accessible indicator that sender countries and policy makers may evaluate. While sanctioned states are faced with economic constraints and limited investments at hand, they are compelled to shift the investments to more cost-effective options. Study finds the long-term increasing trends in the share of fossil fuels within Iranian energy mix, largely endowed with hydrocarbons. While for Panama, rich with renewable energy, results indicate a reversal of the trends followed by a long-term shift towards non-renewable path of consumption. It seems that existing inland renewable endowments do not play a primary role for a targeted state when faced with economic sanctions. On the other hand, high initial capital expenses required for installing renewable energy plants comprise a factor that divert energy preferences towards expanding usage of hydrocarbons at times of economic sanctions.