The Effect of Economic Boom & Recession on Environmental Pollution in Iran: Focusing on Economic Sectors

In this research, we attempt to investigate the effect of economic boom and recession on environmental pollution in Iran through an asymmetric approach. To this end, an autoregressive approach with nonlinear distributive pause was used with the data for the period (1971-2017) to explain and describe the asymmetry; Accordingly, a basic model (for the entire economy) and three partial patterns (for household, commercial and public sector, industrial sector, as well as transportation sector) have been estimated. The results indicate that in the short run and the long run, the economic boom and recession have a directimpact on carbon dioxide emissions. That is to say, as GDPincreases (the economic boom), with the expansion of activities in all aforementioned economic sectors, increased usage of resources leads to the surge of pollution emissions. On the other hand, during the economic recession, which is accompanied by reduction in activities in sectors such as the industrial sector (as one of the most energy-consuming sectors in the economy of Iran), the emission of pollutants is reduced. In addition, the presence of asymmetry in the effects of the production on environmental pollutant emissions are also confirmed. As a result, in the long-run, both in the overall economy as well as in the three sectors examined, the elasticity of pollutant emissions to production, is larger than the one during the economic boom, whereas it is less than the one during the economic recession. Therefore, the results suggest that legislators and economic policymakers pay special attention to improving the price of energy carriers in order to make energy usage more efficient.