The Role of Oil Rent in the Impact of Green Policies on Environmental Health in Iran

Abstract :

Oil rents can contribute to improving environmental quality and sustainability through investment in green technologies and clean energy. Conversely, dependence on oil resources may weaken the positive impact of green technologies and clean energy on environmental quality by undermining institutional quality and good governance. Accordingly, this study investigates the effects of green management measures and policies (including green technologies and clean energy), oil rent, and their interaction on the Environmental Load Capacity Factor (LCF) in Iran, calculated as the ratio of ecosystem biocapacity (supply side) to ecological footprint (demand side), over the period 1990–2022. To this end, a novel Fourier bootstrap ARDL (F-ARDL) approach is employed. The results indicate that the long-run effects of green management measures and policies and oil rent on LCF are positive and negative, respectively, as expected. The interaction effect between green management measures and policies and oil rent on LCF is negative, suggesting that oil rent weakens the beneficial impact of green technologies and clean energy on environmental quality and thereby supports the resource curse hypothesis over the study period. Furthermore, economic growth and urbanization exert a negative and statistically significant effect on LCF, confirming the pollution halo hypothesis. Accordingly, it is recommended that appropriate policies be formulated and implemented to reduce dependence on oil revenues and allocate a portion of oil revenues to investment in suitable and environmentally friendly technologies through the establishment of green funds

References:

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