The Effects of Economic Growth and Energy Consumption on Environmental Pollution: A Case Study of Iran

Most economic activities inevitably use natural resources and at the same time by releasing waste material which is a result of production activities, imposes pressures on the natural ecosystem. In this study it has been attempted to investigate the relations between carbon dioxide emissions and national income variables, trade liberalization, electricity generation, total consumption of petroleum products, natural gas consumption and domestic investment in the form of Environmental Kuznets Curve (EKC) hypothesis by applying time series data of Iran’s economy during the time period of (1979-2010) and by adopting Auto Regressive Distributed Lag (ARDL) method. This shows that environmental hypothesis and Kuznets Curve are partly approved in Iran. In order to accomplish this issue thoroughly, standard growth and perfect technology in production is required. The results of this study indicate that increase in national income, trade liberalization, electricity generation, total consumption of petroleum products,  natural gas consumption and domestic investment have a positive and significant effect on carbon dioxide emission. Moreover, it has been found that chi-income has a negative, however, more insignificant, compared to income, on environmental pollution