The Effect of Energy Intensity on Carbon Dioxide Emissions in Iranian Provinces: A Spatial Econometric Approach

One of the most important issues related to the environment is the increase in energy consumption in economic activities. On the one hand, energy is a major production input that is necessary for production and economic growth. On the other hand, energy consumption causes the emission of greenhouse gases and also air pollutants such as carbon dioxide. Accordingly, the purpose of this study is to investigate the direct and indirect effects (spillovers) of energy consumption intensity on carbon dioxide emissions in the provinces of Iran during 2008-2017 using the model of spatial econometrics. Before estimating the model, at first the Levin, Lin, Chou (LLC) unit root test was estimated to evaluate the stationarity of the variables, then after performing the Hausman test and multiple Wald and Wald diagnostic tests used to selection of best model. The results of model have shown that energy intensity, per capita GDP and population of regions have had a significant positive and direct effect on carbon dioxide emissions in the regions. Also, energy intensity, per capita GDP and change in the structure of the provinces have had indirect effects on the production of the provinces