Studying the effects of fuel price changes on greenhouse gas emissions in the road transportation sector of Iran; approach of Robust Least Squares

Economic policies in recent decades so that environmental challenges have become one of the most important concerns of policy makers. Reform of energy carrier price, is one of the government's economic policies in recent years that so far had widely the economic and environmental effects. In this study, we have tried using Robust least squares method (RLS), the effect of changes in the fuel price (Gasoline and Diesel fuel) on greenhouse gas emissions in the road transport sector during 1991-2013 to be tested. In order to accurate assess the environmental impacts resulting from reform of the fuel price, the road transport sector is divided to four sub-sectors; cars, buses, minibuses, trucks and tractors and the amount of emissions for each sub-sector of the existing fleet is considered. The results shows that with the increasing of Gasoline price in cars sub-sector, significantly reduced greenhouse gas emissions. But in other sub-sectors with rising Diesel fuel price significantly rising greenhouse gas emissions. On the other hand, by increasing the share of investment in transport sector to total investment, emissions in each sub-sector significantly have increased. Increasing of GDP per capita and urbanization leads to negative and significant effects on emissions in cars sub-sector. While this relationship is positive and significant in buses, minibus and trucks sub-sector.