Social, economic, and technical factors affecting CO2 emissions in Iran

Abstract

Most scholars support the increase in carbon dioxide (CO2) emissions as one of the major causes of the increase in global climate change. Therefore, reducing CO2 emissions from the main emitter countries, including Iran as the sixth emitter, is important to deal with the harmful effects of global climate change. Accordingly, the main aim of this paper was to analyze the social, economic, and technical factors affecting CO2 emissions in Iran. Previous studies on diverse variables affecting emissions are not very accurate and reliable as they do not consider indirect effects. This study applied a structural equation model (SEM) to estimate the direct and indirect impacts of factors on the emissions by panel data for 28 provinces of Iran from 2003 to 2019. According to geographical location, three distinct regions, the north, center, and south of Iran were considered. The findings suggest that a 1% increase in social factor directly increased CO2 emissions by 2.23% (in the north) and 1.58% (in the center), but indirectly reduced emissions by 0.41% (in the north) and 0.92% (in the center). Hence, the total effects of the social factor on CO2 emissions were estimated at 1.82%, and 0.66% in the northern, and central regions, respectively. In addition, the total effects of the economic factor on CO2 emissions were estimated at 1.52%, and 0.73% in those regions. The results of this study showed that the direct effects of a technical factor on CO2 emissions were negative in the north and center. However, they were positive in the south of Iran. Based on the empirical results of this study, three policy implications are discussed in order to control CO2 emissions in regional distinctions of Iran as follows: First, policymakers should pay attention to the social factor, i.e., the growth of human capital in the southern region with the aim of increasing sustainable development. Second, Iranian policymakers must prevent unilaterally increasing gross domestic product (GDP) and financial development in the north and center. Third, policymakers should pay attention to the technical factor, i.e., improving energy efficiency, as well as upgrading information and communications technology (ICT) in the northern and central regions, and limiting the technical factor in the southern region.

Keywords: CO2 emissions; Direct and indirect effects; Regional distinctions; Social, economic, and technical factors; Structural equation model (SEM).