Investigating the effect of carbon tax on pollution control in Iran's agricultural sector (with the implementation of the Energy Subsidy Targeting Law)

Document Type : Research Paper

Authors

1 Tarbiat Modares University - Faculty of Agriculture

2 Tarbiat Modares University, Faculty of Agriculture, Tehran, Iran

10.22034/saps.2023.47609.2727

Abstract

Background and Objective: Paying subsidies to energy carriers causes environmental pollution. Therefore, it is necessary to investigate the effective factors on pollution control during the targeted period of energy subsidies. The purpose of this study is to investigate the effect of applying the carbon tax policy on pollution control in Iran's agricultural sector.
Materials and Methods: To achieve this goal, the translog cost function was estimated through seemingly unrelated linear regression (SUR) for the period 1997 to 2018. Also, through a scenario-based approach, the effect of tax rate on pollution control was investigated for the period 2010 to 2018. Relevant statistical information has been collected from Central Bank, Iran Statistics Center, Ministry of Energy and FAO Organization.

Results: The results showed that the carbon tax policy in the agricultural sector is an efficient policy for energy storage and pollution control in the agricultural sector, so that by applying different scenarios of the carbon tax rate, it was found that the implementation of this policy saves energy consumption with an average of 92. 14 million barrels will be equivalent to crude oil and the reduction of carbon dioxide emissions will be an average of 87.3 million tons.
Conclusion: According to the results, in order to develop new technologies and sustainable growth of production to achieve the goals of saving energy consumption and reducing carbon dioxide emissions, it is suggested to accelerate pricing reforms by implementing the policy of increasing the carbon tax.

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