Analysis of intersectoral differences and environmentally development process in Iran

Although the economic growth and development of societies have brought them dramatic improvements in various fields, but these achievements were at the expense of a growing environmental degradation. Investigating different national and international reports on the growth and development indicators of Iran reveals a growing trend, but at the expense of an accelerating environmental degradation. Given the importance of the environmental development process, this study investigated the environmental Kuznets curve (EKC) hypothesis considering intersectoral differences between the economic sectors of agriculture, industry and services in Iran during 1988-2012 and using panel mean group (PMG) approach to estimate the Co2 emission function. Results confirmed the existence of the EKC in long run period, though in the short run the structural differences between sectors played an effective roll on the environmental development process and on the existence of the EKC in Iran. Finally, due to the mentioned structural differences, some policy recommendations appropriate to each sector's special features were recommended.