Investigation of the Causality Relationship Between Growth of Industrial Sector and Air Pollution in Economy of Iran During 1986- 2011

Due to the growth of industrial activities and air pollution simultaneously, to investigate the relationship between these two variables in planning and environmental policy could be important. In this paper, using standard Granger causality test and Granger causality Hisao test, Causal relationship between air pollution (emissions of CO2) and value added of the industrial sector during the 1968 to 2011 were studied. The data of this study obtained from Central Bank of Iran, World Bank data and the Iran energy balance sheet for the period 1968 to 2009. According to the results, two- sided causality between two variables is proved. According to effect of value added of the industrial sector to emissions of CO2, it is proposed that to enhance the efficiency in use of industrial inputs to move towards environment friendly technologies.