Explaining Relationship between Carbon Footprint and Economic Growth with Emphasis on Welfare Index: Evidence from Panel Data for OPEC Countries

Document Type: Research Article


Faculty of Management, Arak Branch, Islamic Azad University, Arak, Iran


Considering oil-rich status of OPEC member countries, abundance of energy resource and its low cost, environmental quality is at low level due to production and extraction of energy resources. Iran is also a part of this collection, thus, the higher greenhouse gas emission in these countries makes more problems for the human beings and other creatures and control, and observation of standards in this regard becomes more important than ever. Therefore, the present study was conducted to investigate the relationship between carbon dioxide emissions and economic growth with emphasis on the social welfare index of OPEC member countries. To this end, the data of OPEC member countries from 2000 to 2014 were analyzed using the data panel approach. The results showed that CO2 emissions have a positive and significant relationship with the economic growth of OPEC member countries, which means that the higher the CO2 emissions, the higher the nominal growth. However, when the relationship between CO2 emissions and economic growth is calculated by emphasizing the welfare index, it shows that this effect is declining. It means that the effect of pollution on declining welfare ultimately reduces the rate of economic growth. Give. Therefore, countries should take a constructive step in improving economic growth and reducing pollution by improving the quality of the environment and creating a suitable foundation for realization of this goal, because one of the main goals of societies and governments is to improve the welfare of society.


Abessa, D., Famá, A., and Buruaem, L. (2019). The systematic dismantling of Brazilian environmental laws risks losses on all fronts. Nature ecology and evolution, 3(4), 510-511.
Ajamoglu, D. (2015). An Introduction to Modern Economic Growth, translated by Seyed Abdolmajid Jalaei Esfandabadi and Maliheh Vaezizadeh, First Edition, Noor Elm Publications, Tehran.
Asongu, S. A., and Odhiambo, N. M. (2019). Environmental degradation and inclusive human development in subā€Saharan Africa. Sustainable Development, 27(1), 25-34.
Behboudi, D. and Sojudi, S. (2010). Environment and Sustainable Economic Growth: A Case Study of Iran, Economic Modeling, 4(2), 1-18.
Chen, J., Fan, W., Li, D., Liu, X., and Song, M. (2020). Driving factors of global carbon footprint pressure: Based on vegetation carbon sequestration. Applied Energy, 267, 114914.
Chen, Q., and Taylor, D. (2020). Economic development and pollution emissions in Singapore: Evidence in support of the Environmental Kuznets Curve hypothesis and its implications for regional sustainability. Journal of Cleaner Production, 243, 118637.
D’Arge, R. C., 1971, Essay on Economic Growth and Environmental Quality.The Swedish Journal of Economics, 73 (1), 25-41.
Destek, M. A., and Sarkodie, S. A. (2019). Investigation of environmental Kuznets curve for ecological footprint: the role of energy and financial development. Science of the Total Environment, 650, 2483-2489.
Dogan, E., and Inglesi-Lotz, R. (2020). The impact of economic structure to the environmental Kuznets curve (EKC) hypothesis: evidence from European countries. Environmental Science and Pollution Research, 1-8.
Dogan, E., and Inglesi-Lotz, R. (2020). The impact of economic structure to the environmental Kuznets curve (EKC) hypothesis: evidence from European countries. Environmental Science and Pollution Research, 1-8.
Flores, L., García, J., Pena, R., and Garfí, M. (2020). Carbon footprint of constructed wetlands for winery wastewater treatment. Ecological Engineering, 156, 105959.
Forster, B. A. (1973). Optimal Capital Accumulation in A Polluted Environment. Southern Economic Journal, 39, 544-54.
Garmestani, A., Ruhl, J. B., Chaffin, B. C., Craig, R. K., van Rijswick, H. F., Angeler, D. G., ... & Allen, C. R. (2019). Untapped capacity for resilience in environmental law. Proceedings of the National Academy of Sciences, 116(40), 19899-19904.
Gholamipour Foumani, L., Jalaei Esfandabadi, S., Zayandeh Roody, M. and Nejati, M. (2019). To Review the Situation of Carbon Footprint in Iran Trade Balance by CGE Approach, Environmental Energy and Economic Research, 3(2), 129-142.
Gholamipour Foumani, L. (2018). Investigating the status of carbon footprint in Iran's trade balance with emphasis on the effect on the Gini coefficient of income deciles with DCGE approach, PhD thesis, Islamic Azad University, Kerman Branch, Faculty of Economics.
Gholamipour Foumani, Leila, Jalaei Esfandabadi, Seyed Abdolmajid, Zayandeh Rudi, Mohsen and Nejati, M. (2018). Investigating the Impact of Carbon Footprint on the Trade Balance of OPEC Countries with Emphasis on Income Inequalities, Agricultural Economics Research, 10,(4), 17-138.
Glicksman, R. L., Markell, D. L., Buzbee, W. W., Mandelker, D. R., and Bodansky, D. (2019). Environmental Protection: Law and Policy. Aspen Publishers.
Gorus, M. S., and Aslan, M. (2019). Impacts of economic indicators on environmental degradation: evidence from MENA countries. Renewable and Sustainable Energy Reviews, 103, 259-268.
Hakimi, A., and Hamdi, H. (2016). Trade liberalization, FDI inflows, environmental quality and economic growth: a comparative analysis between Tunisia and Morocco. Renewable and Sustainable Energy Reviews, 58, 1445-1456.
Hosseini, S. M., Saifoddin, A., Shirmohammadi, R., & Aslani, A. (2019). Forecasting of CO2 emissions in Iran based on time series and regression analysis. Energy Reports, 5, 619-631.
Jia, F., Li, D., Liu, G., Sun, H., and Hernandez, J. E. (2020). Achieving loyalty for sharing economy platforms: an expectation–confirmation perspective. International Journal of Operations & Production Management.
Jiang, H., Justice, L. M., Purtell, K. M., and Bates, R. (2020). Exposure to Environmental Toxicants and Early Language Development for Children Reared in Low-Income Households. Clinical Pediatrics, 0009922820908591.
Jin, T. and Kim, J. (2020). Investigating the environmental Kuznets curve for Annex I countries using heterogeneous panel data analysis. Environmental Science and Pollution Research, 1-16.
Kallis, G. (2011). In defence of degrowth. Ecol. Econ., 70(5), 873–880.
Kitamura, Y., Karkour, S., Ichisugi, Y., and Itsubo, N. (2020). Carbon Footprint Evaluation of the Business Event Sector in Japan. Sustainability, 12(12), 5001.
Kolokotsa, D. and Santamouris, M. (2015). Review of the indoor environmental quality and energy consumptionstudies for low income households in Europe, Science of the Total Environment, 536, 316-330
Liu, Y. (2014). Dynamic study on the influencing factors of industrial firm's carbon footprint, Journal of Cleaner Production, PP: 1-12. (journal homepage: www.elsevier.com/ locate/jclepro)
Long, X. and Ji. X. (2019). Economic Growth Quality, Environmental Sustainability, and Social Welfare in China - Provincial Assessment Based on Genuine Progress Indicator (GPI), Ecological Economics, 159, 157-176.
Martinez-Zarzoso, I. and Bengochea-Morancho, A. (2003). Testing for Environmental Kuznets Curves in Latin-American Countries, Journal of Revista de Analisis Economico, 18, 3-26.
Mehrara, M. and Fazaeli, A. (2007). The Relationship between Health Expenditures and Economic Growth in the Middle East and North Africa (MENA), Quarterly Journal of Health Management, 12(35).
Mehrara, M., Rezaei Bargshadi, S. and Hamedi, S. (2016). The impact of energy consumption on Iran's economic growth; Bayesian approach, Quarterly Journal of Energy Policy and Planning Research, 3, 61-101.
Momeni Vesalian, H., Daghigh Asli, A.R. and Al-Ahmadi, E. (2013), The effect of inflation on life insurance and its neutralization strategies, Economic Sciences Quarterly, 7(23), 32-58.
Nikoo Eghbal, A.A., Akhtari, A., Amini Esfidvajani, M. and Attar Kashani, M. (2012). Economic Growth, Energy Consumption Growth, and Carbon Dioxide Emission Growth, Investigating the Causal Relationship with Dynamic Panel Data (DPD), Energy Studies Quarterly, 33, 197-169
Ottelin, J., Heinonen, J. and Junnila, S. (2018). Carbon and material footprints of a welfare state: Why and how governments should enhance green investments, Environmental Science and Policy, 86, 1-10.
Pablo-Romero, M.P., and Sánchez-Braza, A. (2017). The changing of the relationships between carbon footprints and final demand: Panel data evidence for 40 major countries, Energy Economics, 61, 8-20.
Padash, A. and Ataee, S. (2019). Prioritization of Environmental Sensitive Spots in Studies of Environmental Impact Assessment to Select the Preferred Option, Based on AHP and GIS Compound in the Gas Pipeline Project. Pollution, 5(3), 671-685.
Padash, A., and Ghatari, A. R. (2020). Toward an Innovative Green Strategic Formulation Methodology: Empowerment of corporate social, health, safety and environment. Journal of Cleaner Production, 121075.
Padash, A., Bidhendi, G. N., Hoveidi, H. and Ardestani, M. (2015). Green strategy management framework towards sustainable development. Bulgarian Chemical Communications, 47, 259-268. 
Padash, A., Jozi, S. A., Nabavi, S. M. B. and Dehzad, B. (2016). Stepwise strategic environmental management in marine protected area. Global Journal of Environmental Science and Management, 2(1), 49-60. 
Ratchawat, T., Panyatona, S., Nopchinwong, P., Chidthaisong, A. and Chiarakorn, S. (2020). Carbon and water footprint of Robusta coffee through its production chains in Thailand. Environment, Development and Sustainability, 22(3), 2415-2429.
Sarkodie, S. A. and Ozturk, I. (2020). Investigating the environmental Kuznets curve hypothesis in Kenya: a multivariate analysis. Renewable and Sustainable Energy Reviews, 117, 109481.
Sarkodie, S. A. and Strezov, V. (2019). A review on environmental Kuznets curve hypothesis using bibliometric and meta-analysis. Science of the total environment, 649, 128-145.
Sawhney, A. and Rastogi, R. (2014). Is India Specialising in Polluting Industries? Evidence from US-India Bilateral Trade, The World Economy, doi: 10.1111/twec.12164, PP: 360-378.
Shahbaz, M., Haouas, I. and Van Hoang, T. H. (2019). Economic growth and environmental degradation in Vietnam: Is the environmental Kuznets curve a complete picture?. Emerging Markets Review, 38, 197-218.
Shakeri, A. (2015). Theories and Policies of Macroeconomics, Volume 1, Fifth Edition, Rafe Publications, Tehran.
Sinha, A. and Bhattacharya, O. (2016). Environmental Kuznets curve estimation for NO2emission: A case of Indian cities, Ecological Indicators, 67, pp:1-11
Song, M., Zhu, S., Wang, J. and Zhao, J. (2020). Share green growth: Regional evaluation of green output performance in China. International Journal of Production Economics, 219, 152-163.
Suki, N. M., Sharif, A., Afshan, S. and Suki, N. M. (2020). Revisiting the Environmental Kuznets Curve in Malaysia: The role of globalization in sustainable environment. Journal of Cleaner Production, 121669.
Viganò, L. and Castellani, D. (2020). Financial decisions and risk management of low-income households in disaster-prone areas: evidence from the portfolios of Ethiopian farmers. International journal of disaster risk reduction, 45, 101475.
Zhang, C. and Zhao, W. (2014). Panel estimation for income inequality and CO2 emissions: A regional analysis in China, Applied Energy, 136, 382–392
Zhou, S. W. (2020). Carbon Footprint Measurement. In Carbon Management for a Sustainable Environment (pp. 25-67). Springer, Cham.