The impact of renewable energy and carbon emissions on health expenditures in Iran

Subject Areas : Health, Education, and Welfare Economics

Mohammadreza Arefian ¹ , Abbas Assari ² , Lotfali Agheli Lotfali Agheli ³ , Ali Asgary ⁴

1 - Ph.D Student in Ecinomics, Department of Economics, Tarbiat Modares University, Tehran, Iran, [e-mail]
2 - Associate Professor, Department of Economics, Tarbiat Modares University, Tehran, Iran (Crossponding Authur), [e-mail]
3 - Associate Professor, Department of Economics, Tarbiat Modares University, Tehran, Iran, [e-mail]
4 - Professor, School of Administrative Studies, York University, Toronto, Canada, [e-mail]

Received: 2025-01-23 Accepted : 2025-03-24 Published : 2025-05-17

Keywords: Keywords: Environmental Pollution, Age Dependency, Urbanization, Energy Consumption JEL Classification: C32, I18, Q20, Q50, R23,

Abstract :

Health is the most valuable asset of humanity and is often considered priceless. In recent decades, the increasing consumption of fossil fuels and its consequences—such as carbon emissions and environmental pollution—have worsened health conditions, strained healthcare systems, and raised mortality rates in many countries. Additionally, urbanization and demographic shifts have introduced new challenges for the health sector. This study employs time-series data and the autoregressive distributed lag (ARDL) model to examine the impact of environmental and social factors—including renewable energy consumption, carbon emissions, urban population growth, and the age dependency ratio—on health expenditures in Iran from 1990 to 2019. The key indicators analyzed include government health expenditures, renewable energy consumption as a share of total energy use, annual urban population growth, and the age dependency ratio as a percentage of the working-age population. The findings indicate that rising carbon dioxide emissions, urban population growth, and a higher age dependency ratio contribute to increased health expenditures, while greater renewable energy consumption, by reducing carbon dioxide emissions, has a significant negative effect on healthcare costs. In other words, increased reliance on renewable energy improves public health and reduces financial burdens on the healthcare system. These results underscore the importance of developing renewable energy sources, transitioning away from fossil fuels, and prioritizing green growth strategies to enhance environmental quality and promote public health.

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