Investigation of the Effect of Industrial Sector Added Value on the Carbon Dioxide Discharge in Iran: A Kuznets Curve Approach

The focus of the countries on finding a higher economic growth leads to their neglect of the environment and its degradation. In this regard, the development of economic activities with the extraction of raw materials from natural resources and the environment will lead to the loss of environmental resilience ability and the increase of pollutants. The purpose of this study is to investigate the relationship between the growth of industrial production and the amount of pollutants, especially carbon dioxide (CO2) emissions. For this purpose, the Kuznets environmental curve and the data of the industrial units having ten or more employees for the period of 1967-2017 have been used. The results showed that if the value added of the industry sector changed by 1%, the carbon dioxide emission rate would increase by 2.38%, and with 1% population increase, carbon dioxide emission would increase by 0.67%. Also, with gross domestic product increase at a constant price of 1%, the carbon dioxide emission will decrease by 0.79%. According to the results the coefficient of error correction term is equal to -0.64 which is found statistically significant. This means that 64% of error in each period will be corrected in long run trend.