Evaluating the Mutual Effects of Economic Growth and Environmental Degradation (Analysis of the Main Economic Sectors in IRAN)

The declining trend of non-renewable resources and the damage caused to the climate in this century has caused many concerns in terms of economic growth and progress. Strengthening economic growth is achieved in parallel with the increasing consumption of energy, and high energy consumption causes the release and increase in the concentration of all kinds of pollutants that are harmful to the environment, for this reason, the topics of economic growth and how to create a balance between growth and environmental quality are very important. One of the important tools to investigate this question is to pay attention to the environmental curve of Kuznets. This review is also important in the micro sector and the same macroeconomic results cannot be used for other sub-sectors. For this reason, in this study, this curve has been investigated and extracted for each of the economic sub-sectors.

The present study aims to measure the effects of economic growth on the environment. The research variables include the country's GDP per capita as an indicator of economic growth and CO2 emission per capita as an indicator to show the level of environmental degradation. The data of the study has been collected at the level of three main sectors for the economy of Iran in the period of 2010-2016. This research will first create an econometric relationship (Co-Integration) between the mentioned variables in each of the three sections and then present the applied form of EKC.

The results of the study confirm the long-run Co-integration relationship between the research variables in the agricultural and industrial sectors, but the dependent form of the Kuznets curve is not confirmed in these sectors. The results show that there is no long-run Co-integration association in the service sector. Also, the error correction coefficients in each of the agricultural and industrial sectors state that 6 and 1 percent of each period's error is corrected in moving to the long-run Steady equilibrium, respectively.

Based on the findings of the research and relying on the logic of the Kuznets curve based on the positive correlation between economic growth variables (income) and pollutant emissions (energy consumption) at low income levels and negative correlation at high income levels, in each of the agricultural and industrial sectors, Economic growth is accompanied by the production of more pollutants and more destruction of the environment, and according to the results of the estimated elasticity’s, this trend in the agricultural sector has more acceleration than in the industrial sector. Therefore, surely, the plan of the Iranian governments should be in line with moving in the direction of development by observing the indicators of sustainable development and compatible with nature. In this regard, the results of the present study on the use and exploitation of clean technologies and new production technologies. It emphasizes recycling, renewable energy consumption, green transportation, green chemistry, gray water, etc.