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

Raanaei, Alireza; Shahnazi, Rouhollah; Hoseiny, Seyyed Aqil

doi:10.30465/ce.2025.51474.2026

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

Document Type : Scientific-research

Authors

Alireza Raanaei ¹

Rouhollah Shahnazi ¹

Seyyed Aqil Hoseiny ²

¹ Shiraz University

² Yasuj University

10.30465/ce.2025.51474.2026

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

Institutional congruence

Green political economy

Central bank independence

Energy governance

Environmental Policy Making

Subjects