Investigating the Causal Factors Determining Environmental Quality Indicators in Iran Using the New Approach of Bootstrap Fourier Granger Causality in Quantile (BFGC-Q)

Introduction: According to the statistics published by the Global Footprint Network, Iran's ecological deficit, which was 0.55 per capita global hectare in 1961, has increased by 554% to 2.50 per capita global hectare in 2022; which shows that the existing supply of natural resources in Iran is not enough to maintain the current production and consumption patterns. Based on this, the analysis of the determining factors of environmental quality indicators in Iran can provide valuable suggestions in the field of designing appropriate environmental policies. In this regard, the main goal of this study is to examine the causal determinants of environmental indicators in Iran.Materials and Methods: The present descriptive-analytical and applied study uses time series data from 1970-2022 to examine the causal determinants of environmental indicators in Iran using two traditional indicators of CO2 emission and ecological footprint (EF) and also the new index of load capacity factor (LCF) which simultaneously considers the supply and demand of nature. Based on this, the causal effect of economic growth, natural resources dependency, urbanization, and renewable energy consumption on environmental quality indicators has been investigated by applying the new approach of Bootstrap Fourier Granger Causality in Quantile (BFGC-Q) during the years 1970-2022. Unlike previous Grangerian causality tests, this approach considers the issue of non-linearity and structural breaks and can provide useful information about a causal-tail relationship.Results: The results show that urbanization in all quantiles (10th-90th) leads to an increase in CO2 emissions and EF and a decrease in LCF. GDP per capita in the low and middle quantiles (10th-50th) shows a negative causal relationship with LCF and a positive causal relationship with EF in the initial 10th and upper 70th quantiles. Furthermore, GDP per capita in all quantiles (10th-90th) has increased CO2 emissions. Regarding the rent of natural resources, in general, the results of this research support the neutral hypothesis and the absence of a causal relationship. Renewable energy consumption also leads to an increase in LCF in all quantiles (10th-90th) and a decrease in EF in 10th-70th quantiles. While this variable did not have a significant causal relationship with CO2 emissions in any of the quantiles.Discussion: The results show that depending on the investigated environmental index, the effects of economic growth, dependence on natural resources, urbanization, and renewable energy consumption on ecological quality are somewhat different. Based on the results, urbanization has led to the destruction of the country's environment. Therefore, policymakers and urban planners in the process of expanding urbanization must pay attention to the prevention of environmental destruction and prioritize the correct energy consumption. The positive causal effect of GDP per capita in all quantiles on CO2 emissions shows that growth and development paths in Iran are more carbon-intensive. Therefore, efforts should be made to achieve higher economic growth, which requires the use of more energy as one of the most important production factors, by creating and strengthening clean energy and also using technologies to be advanced, efficient, and environmentally friendly in the production process. Considering the positive effect of renewable energy consumption on the LCF index and its negative effect acton EF, it can be said that the increase in renewable energy consumption has reduced the ecological footprint and surpassed its biological capacity in Iran; Based on this, increasing the share of renewable energy can help improve the quality of the environment in the country.