Assessing the Effects of Productivity and Pricing Policies on Water, Energy, and Food Security in Iran: A Nexus Approach Based on a Computable General Equilibrium Model

Articles in Press

Document Type : RESEARCH PAPER

Authors

1 University of Tabriz economic and management faculty

2 Professor of Economics, University of Tabriz, East Azerbaijan

3 Professor of Economics, University of Tabriz, East Azerbaijan, Iran

10.22111/sedj.2026.55223.1691

Abstract

Water, energy, and food (WEF) security constitute major macroeconomic and environmental challenges for Iran. Addressing these challenges within a sustainable development context requires a systemic nexus perspective that explicitly models cross-sectoral interdependencies. Accordingly, this study employs a WEF nexus framework to identify the inherent synergies and trade-offs that shape resource management across these sectors. Using a Computable General Equilibrium (CGE) model calibrated to Iran’s Social Accounting Matrix (SAM), the research evaluates economy-wide effects of two contrasting policy strategies: productivity‑enhancing measures and price‑based policies, including subsidy removal and taxation. Simulations reveal that productivity-driven policies consistently generate macroeconomic dividends, improving aggregate social welfare and reinforcing security across all three WEF dimensions. These benefits are maximized when interventions are implemented as cohesive, prioritized policy packages. Specifically, enhancing energy productivity exerts the most robust positive impact compared to water or food interventions, while a bundled energy–food productivity scenario yields the highest overall efficiency gains. Conversely, relying exclusively on pricing instruments triggers widespread negative macroeconomic spillovers and diminishes public welfare. Within the price scenarios, escalating food prices precipitously degrade food security, and energy price hikes induce severe systemic shocks across the entire economic network. Interestingly, water price increases yield largely neutral systemic effects.
Ultimately, the findings demonstrate that unilateral pricing policies create unsustainable socio-economic frictions. To mitigate these inherent trade-offs, policymakers must design hybrid strategies that structurally integrate price reforms with targeted productivity enhancements, thereby fostering positive nexus synergies and safeguarding Iran’s sustainable development trajectory. Given the static nature of the model, the simulation results are applicable exclusively to short- and medium-term equilibrium adjustments.

Keywords

Main Subjects

Stable Economy Journal

Articles in Press, Accepted Manuscript
Available Online from 10 September 2026

Files

Share

How to cite

Statistics