Abstract
Background. Energy is the most important prerequisite for the development and socioeconomic activities of any country. However, the payment of subsidies for energy and its excessive consumption in recent years have led to numerous environmental problems, such as air pollution, intensified greenhouse effects, and health damage. Therefore, this study aimed to compare alternatives for paying energy subsidies in Iran.
Methods. This descriptive-applied study was designed using the AHP method and conducted with Expert Choice-11 software. In this study, three alternatives of "modifying the payment of energy subsidies (adjusted)", "removing the payment of energy subsidies", and "continued payment in the current form" were evaluated based on 12 health and environmental criteria.
Results. Based on the results, the alternative "modifying the payment of energy subsidies (adjusted)" with a relative weight of 0.503 was selected as the best alternative for payment of energy subsidies in the country. The alternatives "removing the payment of energy subsidies" and "continuing payment in the current form" were ranked next with relative weights of 0.377 and 0.119, respectively. The overall consistency coefficient was ≤0.03, indicating the correctness of the decisions.
Conclusion. Based on the findings, correcting the payment of energy subsidies allows for more efficient spending of financial resources on improving health and medical services, food security subsidies, developing education, public transportation, and renewable energy. Additionally, this alternative can help control the increasing trend of energy consumption and address the issue of energy imbalance in the country while improving health indicators and the environment, particularly air pollution.
Extended Abstract
Background
Energy subsidies have been implemented in many countries, including Iran, often to improve justice, increase energy supply security, promote economic development, support domestic production, create employment, and control inflation. However, paying energy subsidies over time can lead to several adverse effects and negative consequences. Specifically, the low price of energy, which results in higher consumption, along with the low efficiency of industrial complexes, has led to outcomes such as the acceleration of global warming, climate change, urban air pollution, imbalances in government budgets and the energy trade balance, fuel smuggling, and delays in the development of renewable energy projects. These issues have caused significant health and environmental damage. Therefore, the main objective of this study is to compare various alternatives for paying energy subsidies in Iran.
Methods
This descriptive-applied study aims to identify the best alternative for paying energy subsidies in Iran, using the AHP method and Expert Choice-11 software. After defining the main criteria (12 health and environmental factors) and selecting the decision-making alternatives ("modifying", "removing", and "continued" of current energy subsidies), a questionnaire for paired comparisons of criteria and alternatives was developed and provided to a team of experts. Initially, the criteria were compared in pairs using a 9-point preference scale. The relative weight of each criterion was calculated using the geometric mean and weight normalization (special vector method), which determined the importance of each criterion relative to the others. Next, the alternatives were compared in pairs for each criterion, and their relative importance was determined using the same methods. Finally, to determine the final priority, the scores for each alternative were calculated by combining the coefficients obtained from the previous steps using the software. Based on these scores, the best alternative was selected, considering health and environmental factors relevant to the conditions in Iran. The alternative with the highest weight was identified as the best. To assess the consistency of the judgments, the consistency index (CI) and consistency ratio (CR) were calculated. If the CR value of the hierarchical matrix is 0.1 or lower, the experts' comparisons are considered consistent; if the CR exceeds 0.1, the pairwise comparisons need to be revisited.
Results
The results of the pairwise comparisons of the criteria based on relative weights revealed that the criteria "increase in the burden of diseases attributed to air pollution", "health-care costs, disability of citizens, deaths caused by air pollution and road accidents", "health effects caused by global warming and climate change", and "air pollution (global warming, climate change, and acid rain caused by energy production and consumption)"- with relative weights above 0.1- had the greatest impact compared to other criteria in selecting the best alternative for paying energy subsidies in Iran. Subsequently, pairwise comparisons of the three alternatives were evaluated according to the effect of each criterion. Based on these evaluations, the "modifying" alternative received the highest relative weights across all 12 criteria, while the "removing" and "continued" alternatives were ranked next, with lower relative weights. Considering the results of the two main stages, the calculations and final prioritization, showed that decision-making based on health and environmental criteria led to selecting the "modifying" alternative, with a relative weight of 0.503, as the country’s best energy subsidy payment alternative. The "removing" and "continued" alternatives were ranked next, with relative weights of 0.377 and 0.119, respectively. Additionally, the overall consistency coefficient was equal to or less than 0.03, indicating the consistency and accuracy of the decisions made at all levels of the process.
Conclusion
Reforming the subsidy system in line with global planning and policymaking enables the government to control the growing trend of energy consumption, improve environmental indicators, and use financial resources more efficiently. This approach can help enhance health services and food security subsidies, develop education, implement measures to control air pollution (such as expanding public transportation), promote renewable energy, and support other economic and social development programs.
Practical Implications of Research
The continued implementation of the current subsidy payment system promotes inappropriate consumption behaviors. Correcting such behaviors will become more complicated over time, so a prolonged delay in subsidy reform could transform the issue from a socio-economic concern into a socio-political and even security challenge. Therefore, it is recommended that gradual and continuous energy subsidy reform be implemented, accompanied by strategic investments in healthcare, education, transportation infrastructure, renewable energy, industry, food security subsidies and targeted financial support for low-income groups.