The Impact of Stocks Traded-Total Value, Foreign Direct Investment, Number of Students and Fossil Fuel Energy Consumption on NO2 Emissions in Iran

Abstract

The purpose of this paper is to examined the empirical effects of stocks traded-total value, foreign direct investment, number of students, and fossil fuel energy consumption on nitrogen dioxide (NO2) emissions in Iran using time series data for the period 1978–2012. To achieve this goal, we applied the autoregressive distributed lag (ARDL) bounds testing approach. Findings indicate that foreign direct investment, fossil fuel energy consumption, and number of students stimulate NO2 emissions in the long run. Based on these findings, the study recommends that Iran reduce emissions by expanding its existing Carbon Capture, Utilization, and Storage plants; capitalizing on its vast solar and wind energy; reducing high subsidies of the residential electricity scheme; and aggressively investing in energy research to build expertise for achieving electricity generation efficiency. It must be noted that greenhouse gas reduction policies cannot produce immediate results in changing wind and precipitation patterns and thus mitigating climate change effects.