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Analysing the CO2 Emission Function in Iran

Document Type : Original Article

Author

Department of Economics, Faculty of Economics, Managment and Accounting, Yazd University, Yazd, Iran.

Abstract

Introduction: According to international reports, the emission of carbon dioxide in Iran is increasing and it is moving to the top ranks of the first ten countries in the emission of carbon dioxide, research in this field is necessary. The purpose of this research is to analyze the carbon dioxide emission function and the effective variables in this function using the Markov switching method with two regimes for the period from 1975 to 2018. In the conducted researches, the carbon dioxide emission function for Iran has not been investigated. For the first time, this research examines the carbon dioxide emission function in Iran. The purpose of this research is to investigate the carbon dioxide emission function in Iran using the Markov switching method.
Material and methods: Markov switching method was used in this research. In Markov switching models, the time series process is a function of an unobservable random variable called the regime. If the time series changes over time with regime change, the assumption of constant parameters in VAR models is not justified. MS-VAR models can be used as a suitable replacement. The model examined in this research is as follows:
LCO2t = β + LCO2t-1 + LENERGYt + LGDPt + (LGDP)t2+Ut
In the above model, LENERGY logarithm of energy consumption per capita, LGDP is the logarithm of gross domestic product at constant prices in 2005. U term error and (LGDP)2, The square of the logarithm of GDP in 2005 price LCO2t-1 is the logarithm of carbon dioxide emissions in kilograms with one break and LCOt is the logarithm of carbon dioxide emissions (kg per GDP in 2010 dollars). The data of this research was collected from the World Bank website and Oxmetrics7 software was used to estimate the model. The model was considered with two regimes, a regime with high fluctuation of carbon dioxide emission and a regime with low fluctuation of carbon dioxide emission.
Results: In this research, two regimes, including the regime of high fluctuation of carbon dioxide emission and the regime of low fluctuation of carbon dioxide emission, were investigated. According to the results, the hypothesis of Iran's Kuznets curve in the shape of an inverted U was confirmed. According to the results, Iran is at the beginning of the downward part of the Kuznets curve. In the function of carbon dioxide gas emission, the logarithm of carbon dioxide gas emission with one break, the variable logarithm of energy consumption, the logarithm of real gross domestic product, the squared logarithm of real gross domestic product, respectively 0.53%, 0.55%, 0.46% and -0.070 % has a significant effect on the emission of carbon dioxide gas.
Discussion In this model, the width of the regression origin is dependent on the regime. The intermittent variable of the logarithm of carbon dioxide emissions has had a positive and significant effect on the logarithm of carbon dioxide emissions, which shows that with the increase in the carbon dioxide emissions of the previous period, the carbon dioxide emissions of the next period will increase. The carbon dioxide gas released in a period is not completely absorbed until the end of the period, and some of it remains in the environment as storage. All variables of the model are significant with zero probability in the function. Based on the findings of the research, variables of energy consumption, real gross domestic product, real gross domestic product squared and carbon dioxide gas emission variable have a positive and significant effect on carbon dioxide gas emission.

Keywords

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Environment and Interdisciplinary Development
Volume 7, Issue 76
June 2022
Pages 61-73
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