Impact of Innovation on Pollution Emission of Iranian Provinces in the Framework of Environmental Kuznets Curve (Spatial Econometric Approach)

Document Type : Research Paper


1 Ph.D Student of Economics, Razi University

2 Associate Professor of Economics, Razi University

3 Assistant Professor of Economics, Razi University


Identification the affecting drivers on improving the quality of the environment is one of the most effective steps towards achieving environment friendly economic growth and development, thus moving to the third stage of the environmental Kuznets curve. In the present study, the impact of innovation as one of the most important affecting variables on emission of pollution in the Iranian provinces in the framework of Kuznets curve over the period of 2007- 2016 has been estimated with the spatial econometric approach. Two indicators of R&D costs and human capital are used as an alternative to innovation. The results indicate that R&D and human capital have a significant negative impact on air pollution emissions in the Iranian provinces. Therefore, policymakers should reduce pollution emission by planning to increase local investment in R&D activities and improving the quality of human capital. Also, the increase in R&D of adjacent provinces through spatial spillover effects reduces contaminant emission. The findings also suggest that innovation causes that the return point of Kuznets curve occurs at a lower GDP per capita level.


Main Subjects

1-   Álvarez-Herránz, A., Balsalobre, D., Cantos, J. M., & Shahbaz, M. (2017). Energy innovations-GHG emissions nexus: Fresh empirical evidence from OECD countries.Energy Policy, 101, 90-100.‏
2-   Álvarez-Herránz, A., Balsalobre, D., Cantos, J. M., & Shahbaz, M. (2017). "Energy innovations-GHG emissions nexus: Fresh empirical evidence from OECD countries", Energy Policy, 101, 90-100.
3-   Adzawla, W., Sawaneh, M., & Yusuf, A. M. (2019). Greenhouse gasses emission and economic growth nexus of sub-Saharan Africa.Scientific African, 3, e00065.‏
4-   Azami, S., Sharafi, M., and Moradian, F. (2018). Estimation environmental Kuznets hypothesis in Iran: Parametric and nonparametric approach. Journal of Economic Research and Policy, 26( 87), 221-247. (In Persian)
5-   Brannlund, R., Ghalwash, T., Nordstrom, J. (2007). Increased energy efficiency and the rebound effect: effects on consumption and emissions. Energy Econ, 29, 1-17.
6-   Bivand, R. S., Pebesma, E. J., & Gómez-Rubio, V. (2008). Applied spatial data analysis with R,.Springer, 2nd ed, 2013 edition.
7-   Bölük, G., & Mert, M. (2014). Fossil and Renewable Energy Consumption, GHGs (Greenhouse Gases) and Economic Growth: Evidence from a Panel of EU (European Union) Countries.Energy, 74, 439-446.
8-   Chen, W., & Lei, Y. (2018). The impacts of renewable energy and technological innovation on environment-energy-growth nexus: new evidence from a panel quantile regression. Renewable Energy, 123, 1-14.‏
9-   ‏ Donfouet, H. P. P., Jeanty, P. W., & Malin, E. (2013). A spatial dynamic panel analysis of the environmental Kuznets curve in European countries Center for Research in Economics and Management (CREM), Economics Working Paper Archive, 18, 1-16.‏
10-    Dinda, S. (2004). Environmental Kuznets Curve Hypothesis: A Survey. Ecological Economics, 49, 431-455.
11-    Elhorst, J.P. (2014). Spatial econometrics, from cross-sectional data to spatial panels, Springer briefs in Regional Science, Springer.
12-    Fernández, Y. F., López, M. F., & Blanco, B. O. (2018). Innovation for sustainability: the impact of R&D spending on CO2 emissions.Journal of cleaner production, 172, 3459-3467.
13-    Fallahi, F., Asgharpour, H., Behboodi, D., & Pournazmi, S. (2012). Testing the Environmental Kuznets Curvein Iran: LSTR method. Quarterly Energy Economics Review, 32, 73-94.(In Persian)
14-    Fattahi, S., Heiydarian, M., and Moradi, S. (2018). The technical and scale effects of economic growth on environment in Iranian provinces. Quarterly Energy Economics Review, 14(57), 147.171. (In Persian)
15-    Hashmi, R., & Alam, K. (2019). Dynamic relationship among environmental regulation, innovation, CO2 emissions, population, and economic growth in OECD countries: A panel investigation. Journal of cleaner production, 231, 1100-1109.‏
16-    Irandoust, M. (2016). The renewable energy-growth nexus with carbon emissions and technological innovation: Evidence from the Nordic countries. Ecological indicators, 69, 118-125.
17-    Islamlouian, K., Harati., J., & Ostadzad, A. H. (2013). Investigating the dynamic relationship between product and pollution in the framework of environmental Kuznets hypothesis in Iran.. Iranian Energy Economics, 7, 171-197. (In Persian)
18-    Jaunky, V. C. (2011). The CO2 emissions-income nexus: Evidence from rich countries.Energy Policy, 39(3), 1228-1240.
19-    Kahouli, B. (2018). The causality link between energy electricity consumption, CO2 emissions, R&D stocks and economic growth in Mediterranean countries (MCs). Energy, 145, 388-399.
20-    LeSage. J., & Pace, R. (2008). Spatial econometrics modeling of origin destination flows. Journal of Regional Science, 48(5), 941-967.
21-    Monserrate, M. Z., Quiroz, A. T., & Borja, M. J. P. (2016). Testing the environmental Kuznets Curve hypothesis in Iceland: 1960-2010.Revista de economía del Rosario, 19(1), 5-28.‏
22-    Mirshojaeian Hosseini, H., & Rahbar, F. (2011). Spatial dependency in the Environmental Kuznets Curve in Asian countries (Case study: carbon dioxide gas). Journal of Environmental Studies, 37(58), 1-14.(In Persian)
23-    Mozaffari, Z., & Motafaker Azad, A. (2019). The effect of social capital and human capital on air pollution in Iranian Provinces. Journal of Applied Theories of Economics, 6(1), 97-128. (In Persian)
24-    Nikzad, R., & Sedigh, G. (2017). Greenhouse gas emissions and green technologies in Canada. Environmental Development, 24, 99-108.
25-    Ostadzad, A. H., & Behlouli, P. (2015). Effect of renewable energy on the environmental Kuznets curve in Iran. Applied Theories of Economics, 2, 127-154. (In Persian)
26-    Pajooyan, J., & Morad Hasel, N. (2007). Investigating the effect of economic growth on air pollution. Economic Research, 7(4),141-160. (In Persian)
27-    Shahbazi, K., Hamidi Razi, D., & Fashari, M. (2015). Influential factorson pollution emission ofstates of the Persian Gulf: spatial econometric approach. Journal of Environmental Studies, 41(1), 107-127. (In Persian)
28-    Shahbaz, M., Dube, S., Ozturk, I., & Jalil, A. (2015). Testing the environmental Kuznets curve hypothesis in Portugal. International Journal of Energy Economics and Policy, 5(2), 475-481.
29-    Song, X.,  Zhou, Y., & Jia, W. (2019). How do Economic Openness and R&D Investment Affect Green Economic Growth?—Evidence from China. Resources, Conservation and Recycling, 146, 405-415.
30-    Schumpeter, J.A. (1934). The Theory of Economic Development, Harvard University Press, Cambridge, MA.
31-    Töbelmann, D., & Wendler, T. (2020). The impact of environmental innovation on carbon dioxide emissions. Journal of Cleaner Production, 244, 118787.
32-    Wang, Y., & He, X. (2019). Spatial economic dependency in the Environmental Kuznets Curve of carbon dioxide: The case of China. Journal of Cleaner Production.
33-    Xie, Q., Xu, X., & Liu, X. (2019). Is there an EKC between economic growth and smog pollution in China? New evidence from semiparametric spatial autoregressive models. Journal of Cleaner Production, 220, 873-883.‏
34-    Yii, K. J., & Geetha, C. (2017). The nexus between technology innovation and CO2 emissions in Malaysia: evidence from granger causality test.Energy Procedia, 105, 3118-3124.‏
35-    Zhang, Y. J., Peng, Y. L., Ma, C. Q., & Shen, B. (2017). Can environmental innovation facilitate carbon emissions reduction? Evidence from China. Energy Policy, 100, 18-28.‏
36-    Zhang, J., Chang, Y., Zhang, L., & Li, D. (2018)Do technological innovations promote urban green development?—A spatial econometric analysis of 105 cities in China. Journal of Cleaner Production, 182, 395-40.
37-    Zhu, Y., Wang, Z., Yang, J., & Zhu, L. (2020). Does renewable energy technological innovation control China’s air pollution? A spatial analysis. Journal of Cleaner Production, 250, 119515.