Analyzing the Asymmetric Effect of Income per Capita, Capital Inflow, and Oil Price on CO2 Emission in IRAN: NARDL Approach

Document Type : Research Paper

Authors

1 Professor of Economics, Economic Development and Planning Group, Faculty of Economics and management, University of Tabriz, Tabriz, Iran

2 Phd student in Economics, University of Tabriz

Abstract

This study examines the asymmetric effects of per capita income, oil prices, industrial value added, and foreign direct investment on CO2 emissions in Iran through a non-linear distributed lag autoregression model (NARDL) from 1989 to 2023. This study also discusses the pollution safe haven hypothesis and the Kuznets U-shaped curve simultaneously and asymmetrically for Iran. Based on the results of this study, only the per capita income variable has a linear relationship with CO2 emissions, while the other variables have a non-linear relationship. The model results showed that OPEC oil prices have an inverse relationship with pollution emissions only in positive shocks. For the foreign investment variable, only a negative shock positively affects pollution emissions, which indicates that Iran is not a pollution-safe haven for other countries. Also, industrial value added only has a positive effect on positive shocks. On the other hand, per capita income has a negative effect on pollution emissions. Finally, this study's findings showed that the U-shaped Kuznets curve is not true for Iran

Keywords

Main Subjects

References

  1. Abdollahi Arani, Mo., Mansouri, N., Jani, S., & Aghaei, N. (2014). Carbon Dioxide Emissions and Economic Growth: A Spatial Analysis Among Iranian Provinces. Economic Growth and Development Research, 13 (49), 33-54(In Persian).
  2. Antón, A. (2020). Taxing crude oil: A financing alternative to mitigate climate change?. Energy Policy, 136, 111031.
  3. Baek, J., & Kim, H. S. (2013). Is economic growth good or bad for the environment? Empirical evidence from Korea. Energy Economics, 36, 744-749.
  4. Boamah, V., Tang, D., Zhang, Q., & Zhang, J. (2023). Do FDI Inflows into African Countries Impact Their CO2 Emission Levels?. Sustainability, 15(4), 3131.
  5. Esfahani, H., & Naderi, M. (2016). Foreign Direct Investment and the Pollution Shelter Hypothesis. Quarterly Journal of Planning and Budgeting, 21(4), 3-14 (In Persian).
  6. Ghazouani, T. (2021). Impact of FDI inflow, crude oil prices, and economic growth on CO2 emission in Tunisia: Symmetric and asymmetric analysis through ARDL and NARDL approach. Environmental Economics, 12(1), 1.
  7. Gozgor, G. (2017). Does trade matter for carbon emissions in OECD countries? Evidence from a new trade openness measure. Environmental Science and Pollution Research, 24(36), 27813-27821.
  8. Halicioglu, F. (2009). An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy policy, 37(3), 1156-1164.
  9. Hatamrad, S., Safari, B., & Yarmohammadian, N. (2016). Evaluating the Effect of Factors Affecting City Size with an Economic Approach Using a Dynamic System Model (Case Study: Isfahan City). Applied Theories of Economics, 9(3), 202-171 (In Persian).
  10. Iqbal, A., Tang, X., & Rasool, S. F. (2023). Investigating the nexus between CO2 emissions, renewable energy consumption, FDI, exports and economic growth: evidence from BRICS countries. Environment, Development and Sustainability, 25(3), 2234-2263.
  11. Mikayilov, J. I., Galeotti, M., & Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of cleaner production, 197, 1558-1572.
  12. Mahmoudi, M., & Dehmardeh, N. (2014). Investigating the Impact of Renewable and Non-Renewable Energy Consumption, Economic Growth and Governance Quality on CO2 Emissions in Asian Countries. Economics and Modeling, 12 (4), 181-215 (In Persian).
  13. Namahoro, J. P., Wu, Q., Zhou, N., & Xue, S. (2021). Impact of energy intensity, renewable energy, and economic growth on CO2 emissions: Evidence from Africa across regions and income levels. Renewable and Sustainable Energy Reviews, 147, 111233.
  14. Nathaniel, S., Anyanwu, O., & Shah, M. (2020). Renewable energy, urbanization, and ecological footprint in the Middle East and North Africa region. Environmental science and pollution research, 27(13), 14601-14613.
  15. Negin Taji, Z., & Izadkhasti, H. (2014). The impact of international trade and foreign direct investment on carbon dioxide emissions in D8 member countries using a panel data approach. Iranian Journal of Energy Economics, 11(44), 161-192 (In Persian).
  16. Onofrei, M., Vatamanu, A. F., & Cigu, E. (2022). The relationship between economic growth and CO2 emissions in EU countries: A cointegration analysis. Frontiers in Environmental Science, 10, 934885.
  17. Ozcan, B., Ulucak, R., & Dogan, E. (2019). Analyzing long lasting effects of environmental policies: evidence from low, middle and high income economies. Sustainable Cities and Society, 44, 130-143.
  18. Qamruzzaman, M., & Karim, S. (2024). Green energy, green innovation, and political stability led to green growth in OECD nations. Energy Strategy Reviews, 55, 101519.
  19. Salari, M., Javid, R. J., & Noghanibehambari, H. (2021). The nexus between CO2 emissions, energy consumption, and economic growth in the US. Economic Analysis and Policy, 69, 182-194.
  20. Sreenu, N. (2022). Impact of FDI, crude oil price and economic growth on CO2 emission in India:-symmetric and asymmetric analysis through ARDL and non-linear ARDL approach. Environmental Science and Pollution Research, 29(28), 42452-42465.
  21. Sanjari Kenar Sandal, N., Elias Pour, B., & Babaki, R. A. (2016). The Asymmetric Impact of Economic Policy Uncertainty and Oil Prices on Carbon Dioxide Emissions in Iran. Economic Research (Sustainable Growth and Development), 22 (4), 233-260 (In Persian).
  22. Stern, N. (2007). Climate. Stern review: The economics of climate change. New England Journal of Public Policy, 21(2), 4.
  23. Usmani, R. S. A., Saeed, A., Abdullahi, A. M., Pillai, T. R., Jhanjhi, N. Z., & Hashem, I. A. T. (2020). Air pollution and its health impacts in Malaysia: a review. Air Quality, Atmosphere & Health, 13, 1093-1118.
  24. You, W., Zhang, Y., & Lee, C. C. (2022). The dynamic impact of economic growth and economic complexity on CO2 emissions: An advanced panel data estimation. Economic Analysis and Policy, 73, 112-128.
  25. Zabihi, S. M. Ghaem., Akbari, F., & Salehnia, N. (2016). Investigating the Role of Economic, Financial and Political Risks on Carbon Emissions in Iran: A Quantile-by-Quantile Regression (QQR) Approach. Iranian Economic Research, 28(96), 7-52 (In Persian).

Files

Share

How to cite

Statistics