Calculating the Social Welfare Costs Caused by Environmental Pollution of Energy Consuming Industries in Iran

Environmental emissions caused by unstable development, imposed many social costs to our society in recent years. In this survey, we calculated the social welfare costs caused by environmental emissions of energy consuming industries subcategorized under ISIC four-digit coded products of non-metallic minerals and basic metals in Iran; using Leibenstein method. At the beginning of this survey it was assumed that the least and the most negative side consequences on environment in our country are respectively imposed by copper and brick industries. But results showed among the studied cases, non-ferrous foundry with a cost equal to 1.03 percent of its production value imposes the least and Cement, building Lime and gypsum Industry with a cost of 50.7 percent of its production value imposes the most expensive cost of environmental inefficiency on the society. In addition to that, social welfare costs caused by welfare triangle and economic rents of these industries are negligible in comparison with environmental x-inefficiency costs; and include a small amount of welfare costs calculated by Leibenstein method for polluting industries. High costs of achieved social welfare, show the necessity of proper planning in order to increase the environmental efficiency, adopting effective anti-monopoly policies and green tax laws to reduce the harmful effects of energy carriers consumed in polluting industries.