The Impact of Environmental Constraints on Long-Term Economic Growth in Iran (Case Study: Land and Natural Resources)

Economic growth, as a crucial macroeconomic variable, has consistently been the focal point of policies. It brings about various consequential changes in the economy, such as unemployment and income. Factors, both natural and unnatural that impose constraints on economic growth are of paramount significance. This paper specifically examines the impact of environmental constraints, encompassing fossil resources and land, on long-term economic growth. The study refines the solo growth model, incorporating environmental constraints, and employs dynamic optimization, calibration, and analysis methods to quantify the influence of fossil resources and land on Iran's economic growth over an extended period. According to the findings, under current inventories, the projected long-term economic growth rate for Iran stands at 6% in the first scenario, with limitations stemming from the availability of fossil and land resources imposing potential restrictions. The constraints associated with fossil and land resources are noteworthy. Should production yields from fossil resources drop to 0.45, economic growth becomes negative, and a sustained decline exacerbates long-term production. Similarly, if the production stretch reaches 0.4, long-term economic growth turns negative. Hence, effective management of land use and fossil resources emerges as a critical imperative, emphasizing the need to diminish production dependence on these inputs to foster increased economic growth.