The Effects of Energy Carrier's Price Surging on Damage Cost of Environmental Pollution Emissions in Wheat Production Process in FASA City

In this study, indirect production function was applied to cross sectional data of 2013-14 Collected from 201 irrigated wheat producers in Fasa city, to investigate the effect of increased energy carriers’ price on damages cost of pollution emission. According to the high consumption of energy carriers (gas oil and electricity) in production of wheat, with the rising cost of these carriers after targeting subsidies, wheat production cost increased that resulted in reductions of wheat production and thus the damage cost of environmental pollutants emissions. The results showed that a 50 present increase in the price of gas oil and electricity respectively decreases wheat production by 2.22 and 11.75 percent per hectare and this in turn reduces the pollutant damage cost respectively by almost 232 and 1223 thousand rials per hectare. Thus, increasing energy carriers’ prices can lead to controlling damage cost of environmental pollution emission, however, increasing energy carriers’ prices causes wheat production to decrease and so the policy should be implemented cautiously. It also seems that use of appropriate technology in wheat production along with increasing the productivity of all inputs may result in lessening the damage cost with low reduction in wheat production.