Journal of Iranian Economic Issues

Journal of Iranian Economic Issues

Green Political Economy and Energy Governance: Examining the Role of Institutional Congruence in Environmental Policy Making in Iran

Document Type : Scientific-research

Authors
1 Ph.D. in Monetary Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran
2 Professor of Department of Economics, Shiraz University, Shiraz, Iran
3 Assistant Professor of Department of Economics,Yasuj University, Yasuj, Iran
Abstract
The environmental crisis has emerged as one of the main challenges confronting both advanced and developing economies. Addressing this challenge and discovering a solution necessitates a profound rethinking of macroeconomic policy and institutional mechanisms. The present study has examined the implications of central bank independence and government regulation on energy governance and environmental policy in Iran, using green political economy and the principal-agent model. Furthermore, the concept of Institutional Congruence is introduced as a measure of congruity between the government and the central bank in environmental policy. Given adequate Institutional Congruence, the government and central bank can implement coordinated and consistent policies in responding to climate change and enhance energy governance. The findings show that the degree of Institutional Congruence has a significant effect on monetary and macroprudential policy in mitigating pollutant emissions, controlling inflationary fluctuations, managing the output gap, and supervising the financial leverage. Thus, the reformation of institutional structures and formulation of an efficient regulation mechanism are priority strategies in the transition to Iran’s sustainable and green economy.
Keywords

Subjects


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  • Receive Date 20 March 2025
  • Revise Date 25 May 2025
  • Accept Date 14 June 2025