International trade and air pollution damages in Iran

In recent dacades,the unbalanced pattern of foreign trade and its impact on the unfair emission of pollutants in different countries, has been considered by policymakers.in addition to the economic effects of trade, its environmental effects should also be considered in calculating the real trade balance or "green trade balance". in the present study, using the input-output technique. monetary losses resulting and the added value created in the trade process, are estimated in nineteen sectors. The net environmental damage is equal to 4.8% of the net value added and 1.7% of Iran's trade deficit in 2019. The results show that Iran, despite having a trade deficit, is a net importer of pollution. Estimates in the second stage confirm the higher export losses ($ 60.2) compared to the avoided import losses ($ 38.7) for each monetary unit of trade. In fact,Iran is turned to “port of pollution” because of it’s structure. In terms of trade relations with other countries, most of the pollution was imported from Iraq and Afghanistan, while the most polluted exports were to Germany, Switzerland and France, respectively. In trade with China, there are also reciprocal effects (lower income trade and greater environmental damage). Given the current difficult economic and political conditions, the best strategy to simultaneously achieve economic and environmental goals is to develop import alternatives in the groups of pharmaceuticals and health, agriculture, recreational services, arts and tourism, wood, paper and leather textile products. Because they have the lowest proportion of environmental damage to value added among economic groups with a negative trade balance. Also, the minimum amount of environmental damage for each monetary unit of trade is observed in the mentioned groups. The comparison of the study findings with the results of other researches confirms the high potential of the pharmaceutical and health materials group in achieving both economic and economic goals during import substitution policy.