Investigating the effects of economic and human development on Iran’s carbon footprint

Abstract

Environmental pollution is nowadays one of the main challenges of the world. The global economic growth and the associated environmental degradation have put environmental protection at the forefront of attention. Regarding the aim of economic growth and its impact on environmental quality, the effect of various economic and human factors on environmental pollution and degradation is increasingly gaining importance in Iran. This study investigated the effects of economic growth, energy consumption, trade liberalization, urbanization, financial development, and human development on ecological footprint and environmental degradation in Iran over the period 1971-2015 using the Markov switching-error correction method (MS-ECM). Based on the results, the environmental Kuznets hypothesis was confirmed for the ecological carbon footprint with a reversed-U shape. Economic growth, urbanization, and energy use were found to have a positive and significant effect on environmental degradation, while financial development negatively influenced environmental degradation. Also, human development had a positive effect on the ecological carbon footprint. Finally, it is recommended to save energy, especially fossil fuels, by using clean energy, increase environmental awareness, and enforce strict environmental monitoring.

Keywords

• ms-ecm
• pollution
• economic growth
• environmental degradation