Abstract
Increasing the concentration of greenhouse gases is an essential factor in changing the world’s climate. In many cases, the small changes in climate conditions can result in significant climatic changes, natural disasters, and economic losses. In this paper, the association of the CO2, as the most important greenhouse gas, with financial development, Gross Domestic Product (GDP) per capita, urbanization, and trade openness in Iran is investigated using fuzzy regression model from 1978 to 2013. According to the results, GDP, trade openness, and financial development have a positive impact on CO2 emission. Also, the study results indicate that continuous increase in GDP has a negative impact on CO2 emission. Due to the rising production of CO2 in Iran, it is necessary that policymakers take appropriate environmental policies to protect the country from becoming a shelter for polluting industries because low environmental standards in the country are reviewed as a relative advantage. With regard to the benefits of financial development, the policymakers could take measures to increase the technology of production, attracting foreign investment, and lower energy consumption. They also can approve laws on industrial companies and force them to invest in environmental-friendly projects.JEL Classification: C22, G00, Q56
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