Effects of the Industrial Sector Economic Growth on the Quality of the Environment in Iran (Application of the Self Explanatory Model with Extensive Pauses)

We decided to investigate the effects of the industrial sector growth, trade liberalization and energy consumption on Iran's pollution emission amount. For this purpose, time series data from 1986 to 2014 and the self-explanatory technique with extensive pauses have been used. The results of the long-term and short-term relations imply that the added value of industrial sector has positively and significantly impacted on pollution while its square has had a negative impact on pollution. Hence, the environmental Kuznets hypothesis was confirmed in the current study. Energy consumption and trade liberalization have had a positive and significant impact on both short-term and long-term carbon dioxide emission while the impact of energy consumption variable on the level of pollution emission is more considerable. The positive estimated coefficient of the energy consumption variable can be due to low energy efficiency in Iran. For this purpose, it is suggested to move toward environmentally-friendly technologies for the industrial sector. In addition, policy makers should pay a close attention on granting license to industrial sector and avoid granting permission to polluting industrial sectors or try to move them outside the urban area. Developing technical and environmental requirements in manufacturing industrial products in order to decline the amount of industrial emissions, modify production patterns, move energy consumption patterns from polluting energy (such as oil products) to clean and low polluting energies, and consumption of modern and renewable energies in industry are among the suggestions for environmental policies.