Evaluating the Environmental and Socioeconomic Costs of International Trade: Insights from Iran's Carbon Emissions

Document Type : Research Paper

Authors

1 Department of Economics, Islamic Azad University, kerman Branch. Kerman. Iran.

2 Department of Economics, Shahid Bahonar University, Kerman. Iran.

Abstract

In the modern era, heightened awareness of environmental conservation has spurred countries and corporations to adopt ecological initiatives aimed at improving environmental performance. This study examines the environmental and socioeconomic costs tied to carbon emissions from activities related to Iran’s exports. By focusing on the financial damages caused by air pollution, the research employs monetary values to comparisons these damages with the economic effects of trade, pinpoint industries that contribute to pollution, and calculate trade balance indicators from a more comprehensive viewpoint. Using the input-output tables, pollution levels in different industries were calculated. The findings reveal that the losses caused by international trade are significant and cannot be ignored.  Iran’s 2015 economic data indicate that importing goods avoided 2,432million USA $ in damages, while export caused 3,448 million USA $ in damages. Had imports been produced domestically, 2,439 million USA $ damages and 2,049 million USA $ value added would have been created. Net damages generated by the trade amounted to $1008 million, which accounts for 0.84 % of the net value added created by the trade of Agriculture. This implied that the net effect of trade was a $1016-million increase in damages caused by CO2 in 2015. Furthermore, the results show that every $1 million of net value added generated by trade caused emission-related net damages of $0.321 million overall.

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References

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History

  • Receive Date: 21 May 2024
  • Revise Date: 04 February 2025
  • Accept Date: 04 February 2025

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