An Examination of Energy Intensity and Urbanization Effect on Environmental Degradation in Iran (A Cointegration Analysis)



Nowadays, issues of environment degradation sourcing in human actions and economic activities are of crucial worldwide subjects that all societies are concerned with them. Its importance is not only of the natural resources systems’ aspects, but it is also crucial from the socio-economic point of view. So, environmental subjects have considerable role in sustainable development process. Iran as a developing country is faced with problems high rate growth of energy consumption, high energy intensity, and high rate of urbanization, weak efficiency and low productivity of energy use in production function. These problems pushes the country towards environment problems, amongst which the air pollution. So, to achieve a sustainable growth along with environment protection she has to pay attention to issues of energy intensity and urbanization problems. This research examines the eventual determinants of air pollution of Iran particularly the energy intensity and urbanization of the country in the period of 1967-2005. Using Johansen-Juselius procedure, a long–run model of interactions of the selected variables is estimated. Results indicate that energy intensity and urbanization growth have had a significant positive effect on CO2 emissions. Also, findings of the research confirm the EKC hypothesis in Iran in the period of the study.