Globalization, Energy Consumption and Environmental Degradation in Iran: Empirical Evidence from the Maki Cointegration Test

Globalization is a driving force in emitting carbon dioxide (CO2), which causes countries to interact with each other economically, socially and politically. The interaction between countries will inevitably affect CO2 emissions. The aim of this study is to investigate the dynamic effects of globalization and energy consumption on environmental degradation in Iran. Therefore, it examines which variable (globalization, energy consumption or economic growth) is more effective in the process of environmental degradation. The Fully Modified Least Squares (FMOLS) and Charnes, Cooper and Rhodes (CCR) models are applied to investigate the subject over the period 1978-2016. In addition, Maki co-integration test is used to check the long-term dynamic relationships. The results show that globalization increases environmental degradation regardless of the decrease or increase in economic growth. This indicates that the scale effect of is dominant in Iran.