Assessing the Impacts of Changes in the Currency Exchange Rate on Air Pollution in Tehran: A Sectoral Review

Abstract

The 2022 winter was the most polluted season of Tehran in the past five years. Tehran is rated as one of the world’s most polluted cities in World Air Quality Index (AQI) Ranking. Air pollution in Iran’s big cities is the consequence of several economic, technological, management, and socio-cultural factors. But how important is the currency exchange rate? Since the Iranian revolution in 1979, the country has been subjected to sanctions imposed by a varied of international entities, namely the United States. The economic and political consequences of the exchange rate have so far been the central topics of interest to researchers, journalists, and officials. Although multiple factors affect the level of air pollution in cities, this study narrows down its focus on the 2018-2020 period, during which changing in Dollar to Rial have burdened environmental strategies in Iran. National and public entities do not officially reveal the trade volume between Iran and the international community, importing and exporting transactions, and foreign and domestic investments. Therefore, this descriptive-analytical paper examines the experts’ and official debate over the topic in the major national and international newspapers, news agencies, and interviews. Findings reveal political debate and economic consequences, namely a decrease in the Iranian Rial exchange rate against the U.S. dollar, have had undeniable impacts on the national and local actions related to five key areas of public transit, motorcycles, automobiles, petrol, and refineries and power plants, which are five significant pollution factors in Tehran.