Causality between Co2 Gas Emission and National income with Emphasis on Energy Consumption in IRAN



The purpose of this paper is to investigate causality relationship between emission of carbon Dioxide, the level of national income and energy consumption in Iran consumption of fuel fossil as an input of production or as a final consumption which produces significant amount of pollution such as green house gases in the world. C02 emission is the most important green – house gases which has the considerable role to global warming during these recent decades. The present paper tries to investigate the Granger Causality between the rate of growth of income and amount of co2 gas emission, labor force, capital level and energy consumption.
The results indicates that
1- There exists a causality relation from national income to energy consumption
2- Causality relation between income and co2 gas emission has not been verified. In other words the increase of national income does not have effect on the amount of co2 emission in Iran within the 1974-2005period.
3- There is no causality relation from co2 emission to national income, energy consumption, labor force and capital level.
4- Energy consumption causes co2 gas emission.
JEL Classification: F18,Q51,Q56