Assessment of the relationship between environmental pollution, economic growth, and agricultural production in Iran

Introduction
Improving living standards in developing countries and rapid population growth have significant effects on the economy and environment. Population growth leads to an increase in demand for agricultural products, which increases environmental pollution, reduces the productivity of natural resources, and has a negative effect on economic growth. Therefore, the aim of this research is to investigate the short-term and long-term relationship between agricultural production, economic growth, and environmental pollution in Iran.
Materials and methods
In this research, time series data for the period of 1991-2020 were collected from the database of the World Bank and Food and Agriculture Organization (FAO), and the Autoregressive Distributed Lag (ARDL) models were used. First, the augmented Dickey-Fuller (ADF) and Phillips-Perron tests were performed to test the stationarity. Then, according to the values of Akaike, Schwarz, and Bayesian information criterion, the optimal number of lags was selected. ARDL bounds test was used to test the presence of the long-run relationship between the variables, and then short and long-run relationships and error correction models (ECM) were estimated. Finally, the causality between pairwise variables was investigated by using the Granger causality test.
Results and discussion
The results of short-term relationships show that a one percent increase in economic growth, rural population, gross capital formation, and agricultural production increases CO2 emissions by 0.307%, decreases by 2.937%, and increases by 0.087%, and 0.065%, respectively. The effect of foreign direct investment on CO2 emissions in the short term was not significant. However, a one percent increase in the lag of foreign direct investment will increase CO2 emissions by 0.010%. The long-term results show that a one percent increase in economic growth, rural population, agricultural products, foreign direct investment, and gross capital formation will increase CO2 emissions by 0.662%, decrease by 3.807%, and increase by 0.141%, by 0.024% and 0.188%, respectively.
The results of the Granger causality test show the bidirectional causality relationship between economic growth, agricultural production, foreign direct investment, and CO2 emissions, As well as foreign direct investment and agricultural production. Also, there is causality in only one direction between gross capital formation and CO2 emissions, agricultural production and economic growth, foreign direct investment and economic growth, agricultural production and rural population, rural population and foreign direct investment, and rural population and CO2 emissions. In addition, there is a long-term positive and significant relationship between CO2 emissions and economic growth, gross capital formation, agricultural production, and foreign direct investment. The long-run result demonstrated by the FMOLS and DOLS methods is the same as the finding of the ARDL approach.
Conclusion
In Iran, the lack of investment in agricultural mechanization, and the limited access to credits increase CO2 emissions in agricultural production. Therefore, improving environmental productivity by modernizing agricultural mechanization, facilitating renewable energy sources usage, establishing strict environmental rules, using green and innovative technologies, investing in research and development to reduce carbon dioxide emissions, and attracting foreign investment will reduce environmental pollution. Therefore, improving environmental productivity by modernizing agricultural mechanization, facilitating renewable energy sources usage, establishing strict environmental rules, using green and innovative technologies, investing in research and development to reduce carbon dioxide emissions, and attracting foreign investment will reduce environmental pollution. Using industries dependent on fossil fuels, and the formation of gross capital leads to an increase in CO2 emissions. In addition, the rural population significantly affects environmental pollution, and investing in increasing employment opportunities for rural can lead to its reduction.