Parametric and Non-parametric Estimation of Environmental Kuznets Curve in Iran

The purpose of this paper is to examine a systematic relationship between environmental pollution and economic development in Iran. Environmental Kuznets Curve (EKC) is an empirical relationship to illustrate the links between environmental pollution, income, and economic growth. By testing EKC hypothesis, a question is answered implicitly: Do high per capita income and the growth lead to reduce pollution? Here, we first estimate the model with using Iran's (country) time series data, and then, we apply the panel data of Iran's provinces in the model. The existence of EKC does not rejected by the results of nonparametric estimation of time series data (Iran) and the results of parametric estimation of panel data (Iran's states) for Iran. Based on empirical confirmation of EKC pattern in Iran, it can be concluded that increase in the income can lead to clean environmental pollution derived from early stages of economic growth through some mechanisms – including imposing the tax on emissions, establishing control rules and regulations and activation of