Factors Affecting the Consumption of Ecological Resources in Iran Using Economic Approach

The objective of this study is the investigation of factors affecting Ecological Footprint and testing Pollution Haven and Environmental Kuznets’ Curve hypotheses.

In this study, after introducing ecological footprint as an indicator of natural resources degradation, factors affecting it is investigated in the form of natural resources degradation model for the period 1965-2011 using Autoregressive Distributed Lag (ARDL) model; and Environmental Kuznets Curve (EKC) and Pollution Haven hypotheses were tested. In this study, the Gross Domestic Product (GDP), free trade index, urbanization, human development index, development of financial markets index were used as factors affecting the ecological footprint.

Results show that per capita GDP, free trade, development of financial markets and urbanization have positive and significant impacts in long and short term periods, but human development has negative and significant impact on ecological footprint. These results confirmed Pollution Haven hypothesis; but the EKC hypothesis is not confirmed and the relationship between income and ecological footprint is in the form of N. The coefficient of Error Correction is negative and significant which represent the long run equilibrium. The coefficient is -0.99 meaning that ecological footprint corrects its previous period disequilibrium at a speed of 99% annually to reach at the steady state.

According to the results of this study, economic growth in Iran leads to more natural resources degradation. Therefore, governments should pay special attention to development programs in order to be sustainable.