The impact of financial development on air pollution in ECO member countries

Abstract

Although economic growth and development in different countries has increased economic prosperity, but also environmental pollution threatens human life. The purpose of this study is to investigate the factors affecting air pollution by emphasizing the emission of carbon dioxide in among the countries of the ECO region from 2000 to 2018 with an emphasis on financial development. To investigate the effect of financial development on environmental pollution, the Panel Data econometric method has been used and the model coefficients have been estimated with Eviews 10 software. The dependent variable of the research is the amount of carbon dioxide emissions in terms of tons per year and the independent variable is the combined index of financial development. Two control variables including GDP and energy consumption are also included in the model. In the long run, the effect of financial development on carbon dioxide emissions in the ECO countries is positive and significant. Also, the effects of GDP and energy consumption on carbon dioxide emissions are positive and significant. The coefficient of determination of the model is equal to 98%, which indicates the high descriptive power of the model. Although increasing the level of economic activity increases welfare in different societies, but given that increasing the level of economic activity, especially industrial activity, increases the emission of carbon dioxide and biodegradation. یEnvironment in ECO member countries, economic policy makers of these countries should work together to implement the necessary policies and strategies to control and reduce emissions of carbon dioxide and other environmental pollutants.

Keywords

• financial development
• carbon dioxide emission
• echo
• air pollution