Asymmetric Impact of Oil Prices, Foreign Direct Investment and Economic Growth on Carbon Emissions in Iran: Evidence from the NARDL Approach

The amount of environmental pollution can be caused by several factors. These factors are not in the same position in terms of importance and impact, and not all of them can necessarily be seen together in one place or time. Therefore, the main purpose of this study is to investigate the asymmetric impact of oil prices, foreign direct investment and economic growth on carbon emissions in Iran during the period 1981 to 2019. For this purpose, the Nonlinear Autoregressive Distributed Lag method (NARDL) has been used. The results show the asymmetric effect of oil prices on carbon emissions. So that the effect of positive changes in oil price variables in the short and long term on carbon emissions is positive and significant, while there is no significant relationship between negative oil price shocks and carbon emissions in the short term. But there is a positive and significant relationship between negative changes in oil price variables and carbon emissions in the long run. The results also show that the effect of foreign direct investment on carbon emissions is symmetric, so that the effect of foreign direct investment on carbon emissions in the short and long term is negative and significant.