Investigation of Environmental Kuznets Curve for N2O Gas Emissions in Iran by ARDL Model
Subject Areas :
Environmental Economics
Mehdi Sadeghi Shahdani
1
,
Aliakbar Mohammadi Samchouli
2
,
Mohammad Javad Rastegari Koupaei
3
1 - Professor, Department of Energy Economics, Faculty of Economics, Imam Sadiq (A.S) University.
2 - Ph.D. Student, Department of Energy Economics, Faculty of Economics, Imam Sadiq (A.S) University. *(Corresponding Author)
3 - M.Sc., Department of Public Sector Economics, Faculty of Economics, Imam Sadiq (A.S) University.
Received: 2020-11-22
Accepted : 2021-05-28
Published : 2021-08-23
Keywords:
ARDL Model,
Nitrous Oxide Gas,
GDP,
Environmental Kuznets Curve,
Abstract :
Background and Objective: Climate change, such as the increase in hazardous N2O greenhouse gas, is always associated with various economic and developmental consequences. The environmental Kuznets curve indicates that the increase in greenhouse gases emissions until a country's development is directly related to that country's level of production and inversely related after development. The purpose of this study is to investigate the environmental Kuznets curve for N2O greenhouse gas emissions in Iran.
Material and Methodology: The method of answering this problem is quantitative and through econometric analysis of time series data in the period 1960 to 2017 and the Auto Regressive Distributed Lag Model (ARDL) has been used to study and analyze variables.
Findings: The results of the dynamic model show us that the area under cultivation has a negative effect and gross domestic product (GDP) and exports have a positive effect on N2O emissions. GDP2 also has a sign opposite to its root, and the inverse quadratic relation is established. As a result, the assumption of the Kuznets curve in Iran isn’t rejected.
Discussion and Conclusion: The maximum point of the chart for Iran in terms of GDP per capita will be around $7,500. Therefore, if we go beyond this amount, N2O emissions will decrease. At present, the country's GDP per capita is about $6,900 and we are on the upward trajectory of the Kuznets Curve. As a result, reducing N2O emissions will have a negative impact on Iran's growth. Thus, it isn’t possible to implement some policies to reduce these greenhouse gas emissions without major consequences in various sectors of the economy.
References:
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Hamit-Haggar, M., 2012. Greenhouse gas emissions, energy consumption and economic growth: A panel cointegration analysis from Canadian industrial sector perspective. Energy Economics, Vol. 34(1), pp. 358–364.
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Grossman, G.M., Krueger, A.B. 1991. Environmental impacts of a North American free trade agreement. Journal of National Bureau of Economic Research, Working Paper No. 3914.
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Dollar, D., Kraay, A., 2004. Trade, growth, and poverty. Journal of The Economic Journal, Vol. 114(493), pp. 22-49.
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Zivot, E., Andrews, D.W., 1992. Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, Vol. 10(1), pp. 251–270.
World Bank, 2020. World development indicators. Available at http://data.worldbank.org/data-catalog/ (accessed 15 October 2020).
Narayan, P.K., Narayan, S., 2010. Carbon dioxide emissions and economic growth: Panel data evidence from developing countries. Journal of Energy Policy, Vol. 38(17), pp. 661–666.
Brown, R.L., Durbin, J., Evans, J.M., 1975. Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society. Series B (Methodological), Vol. 37(2), pp. 149–192.
Alam, M.M., Murad, M.W., Noman, A.H.M., Ozturk, I., 2016. Relationships among carbon emissions, economic growth, energy consumption and population growth: Testing environmental Kuznets Curve hypothesis for Brazil, China, India and Indonesia. Journal of Ecological Indicators, Vol. 70, pp. 466–479.
IRNA News Agency, 2020. The Minister of Jihad for Agriculture announced: 8% share of the agricultural sector in the country's GDP. Available at https://www.irna.ir/news/83828066 (accessed 15 November 2020).
Lorentsen, L. G., 2008. OECD key environmental indicators. Available at https://www.oecd.org/env/indicators-modelling-outlooks/37551205.pdf (accessed 16 November 2020).
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Alishiri, H., Mohammadkhani, S., Mohammadbagheri, A., 2017. Study of factors affecting carbon dioxide emission in the country (With refined Laspeyres decomposition analytic method). Journal of Environmental Science and Technology, Vol. 19(2), pp. 51-62. (In Persian)
United States Environmental Protection Agency, 2014. Overview of greenhouse gases. Available at https://www3.epa.gov/climatechange/ghgemissions/gases/n2o.html (accessed 16 November 2020).
Strogies, M., Gniffke, P., 2012. Reporting under the United Nations Framework Convention on Climate Change and the Kyoto Protocol 2012 National inventory report on the German greenhouse gas inventory 1990–2010. Federal Environment Agency, Dessau.
U.S Energy Information Administration, 2011. Emissions of greenhouse gases in the U.S. Available at https://www.eia.gov/environment/emissions/ghg_report/ghg_nitrous.php/ (accessed 16 November 2020).
Statistical Center of Iran, 2020. Available at https://www.amar.org.ir/ (accessed 16 November 2020).
Zambrano, M., Fernandez, M.A., 2017, An Environmental Kuznets Curve for N2O emissions in Germany: an ARDL approach. Natural Resources Forum, Vol. 41(2), pp. 119 –127.
Managi, S., Hibiki, A., Tsurumi, T., 2009. Does trade openness improve environmental quality? Journal of Environmental Economics and Management, Vol. 58(3), pp. 346–363.
Hamit-Haggar, M., 2012. Greenhouse gas emissions, energy consumption and economic growth: A panel cointegration analysis from Canadian industrial sector perspective. Energy Economics, Vol. 34(1), pp. 358–364.
Lapinskiene, G., Tvaronavi _ ciene, M., Vaitkus, P., 2014. Greenhouse gases_emissions and economic growth – evidence substantiating the presence of environmental Kuznets curve in the EU. Technological and Economic Development of Economy, Vol. 20(1), pp. 65–78.
Wang, Y., Han, R., Kubota, J., 2016. Is there an Environmental Kuznets Curve for SO2 emissions? A semi-parametric panel data analysis for China. Renewable and Sustainable Energy Reviews, Vol. 54, pp. 1182–1188.
Nasr, A.B., Gupta, R., Sato, J.R., 2015. Is there an Environmental Kuznets Curve for South Africa? A co-sumability approach using a century of data. Energy Economics, Vol. 52(Part A), pp. 136–141.
Lin, B., Omoju, O.E., Nwakeze, N.M., Okonkwo, J.U., Megbowon, E.T., 2016. Is the environmental Kuznets curve hypothesis a sound basis for environmental policy in Africa? Journal of Cleaner Production, Vol. 133, pp. 712–724.
Mohammad Bagheri, A., 2010. Investigating the short-term and long-term relationships between GDP, energy consumption and carbon dioxide emissions in Iran. Journal of Energy Economics Studies, Vol. 27, pp. 101-129. (In Persian)
Lotfalipoor, M.R., Fallahi, M.A., Ashna, M., 2011. Investigating the relationship between carbon dioxide emissions and economic growth, energy and trade in Iran. Journal of Economics Research, Vol. 94, pp. 151-174. (In Persian)
Mahdavi Adeli, M.H., Ghanbari, A.R., 2013. Analysis of the cumulative and causal relationship between carbon dioxide emissions, GDP and energy consumption in Iran. Journal of Iranian Energy Economics Research, Vol. 9, pp. 217-237. (In Persian)
Jamour, M., Judaki, M., Shavvalpour, S., 2019. Identifying factors affecting environmental quality in Middle Eastern countries. Journal of Geography and Environmental Hazard, Vol. 29, pp. 119-131. (In Persian)
Kuznets, S., 1955. Economic growth and income inequality. The American Economic Review, Vol. 45(1), pp. 1–28.
Grossman, G.M., Krueger, A.B. 1991. Environmental impacts of a North American free trade agreement. Journal of National Bureau of Economic Research, Working Paper No. 3914.
Shafik, N., 1994. Economic development and environmental quality (An econometric analysis). Journal of Oxford Economic Papers, Vol. 46, pp. 757-773
Dollar, D., Kraay, A., 2004. Trade, growth, and poverty. Journal of The Economic Journal, Vol. 114(493), pp. 22-49.
Henseler, M., Dechow, R., 2014. Simulation of regional nitrous oxide emissions from German agricultural mineral soils: A linkage between an agro-economic model and an empirical emission model. Journal of The Agricultural Systems, Vol. 124, pp. 70-82.
Kearsley, A., Riddel, M., 2010. A further inquiry into the Pollution Haven Hypothesis and the Environmental Kuznets Curve. Journal of Ecological Economics, Vol. 69(4), pp. 905-919.
Cole, M., 2004. Trade, the pollution haven hypothesis and the environmental Kuznets curve: Examining the linkages. Journal of Ecological Economics, Vol. 48(1), pp. 71-81
Pesaran, M.H., Shin, Y., Smith, R.J., 2001. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, Vol. 16(3), pp. 289-326.
Bouznit, M., Pablo-Romero, M., 2016. CO2 emissions and economic growth in Algeria. Journal of Energy Policy, Vol. 96, pp. 93-104.
Baum, C.F., 2004. A review of Stata 8.1 and its time series capabilities. International Journal of Forecasting, Vol. 20(1), pp. 151-161.
Zivot, E., Andrews, D.W., 1992. Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, Vol. 10(1), pp. 251–270.
World Bank, 2020. World development indicators. Available at http://data.worldbank.org/data-catalog/ (accessed 15 October 2020).
Narayan, P.K., Narayan, S., 2010. Carbon dioxide emissions and economic growth: Panel data evidence from developing countries. Journal of Energy Policy, Vol. 38(17), pp. 661–666.
Brown, R.L., Durbin, J., Evans, J.M., 1975. Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society. Series B (Methodological), Vol. 37(2), pp. 149–192.
Alam, M.M., Murad, M.W., Noman, A.H.M., Ozturk, I., 2016. Relationships among carbon emissions, economic growth, energy consumption and population growth: Testing environmental Kuznets Curve hypothesis for Brazil, China, India and Indonesia. Journal of Ecological Indicators, Vol. 70, pp. 466–479.
IRNA News Agency, 2020. The Minister of Jihad for Agriculture announced: 8% share of the agricultural sector in the country's GDP. Available at https://www.irna.ir/news/83828066 (accessed 15 November 2020).
Lorentsen, L. G., 2008. OECD key environmental indicators. Available at https://www.oecd.org/env/indicators-modelling-outlooks/37551205.pdf (accessed 16 November 2020).
