Investigating the Share of Economic Sectors in CO₂ Emissions and the Ecological Deficit in Iran: A Quantile Regression Approach

This study analyzes the impact of carbon dioxide (CO₂) emissions from different economic sectors on Iran’s ecological deficit from 1970 to 2024. To address data heterogeneity and heteroscedasticity, the quantile regression method has been used, enabling the evaluation of sector-specific effects at various levels of ecological deficit. The model includes CO₂ emissions from agriculture, buildings, fuel, industry, power generation, industrial processes, and transportation. Industrial processes refer to emissions from production reactions in heavy industries, including cement, steel, aluminum, and chemical manufacturing. Meanwhile, the fuel sector encompasses activities related to extracting, refining, and transforming fossil fuels. Empirical results indicate that CO₂ emissions from industry, industrial processes, and transport have positive and statistically significant effects across all examined quantiles (0.25, 0.5, and 0.75), directly contributing to an increase in ecological deficit. In contrast, the agriculture and building sectors exhibit weaker effects, with neutral impacts observed at the median quantile. Notably, the fuel sector displays negative coefficients across all quantiles, suggesting an inverse relationship between fuel-related emissions and ecological deficit, which may be attributed to Iran’s reliance on heavier fuels, such as fuel oil and coal, in certain economic activities. Additionally, the coefficient for the electricity sector is significant only at the 0.75 quantile. Overall, the findings highlight the heterogeneous impacts of sectoral emissions on Iran’s ecological deficit and suggest that policymakers can accelerate the country’s transition toward ecological sustainability by focusing on replacing fossil fuels with renewable energies, improving fuel efficiency, and reforming energy consumption patterns.Empirical results indicate that CO₂ emissions from industry, industrial processes, and transport have positive and statistically significant effects across all examined quantiles (0.25, 0.5, and 0.75), directly contributing to an increase in ecological deficit. In contrast, the agriculture and building sectors exhibit weaker positive effects, with neutral impacts observed at the median quantile. Notably, the fuel sector displays negative coefficients across all quantiles, suggesting an inverse relationship between fuel-related emissions and ecological deficit, which may be attributed to Iran’s reliance on heavier fuels, such as coal, in certain economic activities.
Overall, the findings highlight the heterogeneous impacts of sectoral emissions on Iran’s ecological deficit and propose that policymakers can strengthen the country’s transition path toward ecological sustainability and economic development by focusing on enhancing process technologies, improving fuel efficiency, and optimizing energy consumption patterns.
 
 
Extended Abstract
Introduction
In the contemporary era, sustainable economic growth and environmental protection have emerged as two major priorities in global policymaking. However, the strong interconnection between economic activities and their environmental consequences has created serious challenges for achieving sustainable development. One of the most widely recognized environmental impacts of economic activity is the emission of greenhouse gases. Among these gases, carbon dioxide (CO₂) is considered the most prevalent and influential greenhouse gas, playing a crucial role in climate change and environmentally destructive processes such as global warming, sea level rise, and the increasing occurrence of extreme weather events. These emissions largely originate from the combustion of fossil fuels used for energy production, transportation, industrial activities, and agricultural operations. In addition to greenhouse gas emissions, the concept of ecological deficit has become an important indicator for evaluating the pressure exerted by human activities on natural resources and ecosystem services. Ecological deficit refers to the gap that emerges when human demand for ecological resources—such as food, timber, and freshwater—exceeds the regenerative capacity of the biosphere, including forests, soils, and oceans, to replenish these resources and absorb associated wastes. In other words, ecological deficit occurs when human consumption surpasses the natural environment’s ability to regenerate resources and assimilate waste. This condition reflects the growing pressure imposed by economic activities, particularly current patterns of production and consumption, on essential ecosystem resources and services.In other words, when human consumption exceeds the regenerative and absorptive capacity of nature, ecological imbalance occurs. This condition reflects the intensifying pressure imposed by economic activities—particularly prevailing patterns of production and consumption—on vital ecosystem resources and services, thereby posing a serious threat to environmental sustainability.
 
Method
Iran, as a developing country with a growing population and an economy that remains heavily dependent on fossil energy resources, faces considerable challenges in balancing economic development with environmental protection. Various economic sectors in Iran—including agriculture, industry, transportation, and energy production—each contribute to carbon dioxide emissions and place pressure on ecological resources. Therefore, understanding the specific contribution of each sector and evaluating its impact on ecological deficit is essential for designing effective and sustainable environmental policies. Accordingly, this study focuses on the sectoral structure of the Iranian economy and investigates how emissions from different economic sectors influence ecological deficit under varying levels of environmental pressure. To conduct a comprehensive sectoral analysis of environmental pressure, this research employs long-term time-series data covering the period from 1970 to 2024. Using the quantile regression approach, the study analyzes the impact of carbon dioxide emissions from major economic sectors on ecological deficit in Iran across three quantiles: 0.25, 0.50, and 0.75. The model includes sectoral CO₂ emissions from agriculture, buildings, fuel-related activities, industry, electricity generation, industrial processes, and transportation. Industrial processes refer to emissions generated from chemical and production reactions in heavy industries such as cement, steel, aluminum, and chemical manufacturing. Meanwhile, the fuel sector includes activities associated with the extraction, transformation, and refining of fossil fuels. This sectoral classification allows for a more precise examination of how different sources of emissions contribute to ecological imbalance in Iran.
 
Findings
The empirical results obtained from the quantile regression analysis reveal notable differences in the impact of sectoral emissions on ecological deficit. Specifically, carbon dioxide emissions from the industrial sector, industrial processes, and transportation are found to be positive and statistically significant across all examined quantiles. This indicates that increases in emissions from these sectors directly intensify ecological deficit in Iran. Industrial activities and their related processes have long been recognized as major sources of environmental pollution due to their energy-intensive nature and heavy reliance on fossil-based inputs. Similarly, emissions from the transportation sector contribute significantly to ecological imbalance, reflecting the growing demand for mobility and the continued dependence on fossil-fuel-based transport systems. In contrast, the agriculture and building sectors exhibit weaker effects on ecological deficit. In the median quantile, the influence of these sectors is not statistically significant. This result may be attributed to differences in energy consumption patterns, technological characteristics, and the nature of environmental impacts associated with these sectors. In many cases, the environmental effects of agricultural and building activities may become more evident only over longer periods or at higher levels of emissions. Another notable finding concerns the fuel sector. The estimated coefficient for this sector is negative across all three quantiles, suggesting an inverse relationship between emissions from fuel-related activities and ecological deficit. In other words, an increase in CO₂ emissions from this sector is associated with a reduction in ecological deficit. This unexpected result may reflect the complexity involved in accurately measuring emissions from fuel-related activities or the heterogeneity of fuel types used within the sector. In particular, heavier fuels such as fuel oil and coal—commonly used in certain industries and power plants in Iran—may influence the relationship between emissions and ecological deficit in ways that require further investigation. Additionally, the coefficient associated with the electricity generation sector is statistically significant only at the 0.75 quantile.
 
Conclusion
This finding indicates that emissions from electricity generation become particularly influential under conditions of higher environmental pressure and resource demand. In such circumstances, the environmental impact of electricity production intensifies and contributes more significantly to ecological deficit. This highlights the importance of reforming the structure of electricity generation in Iran, reducing dependence on fossil-fuel-based thermal power plants, and increasing the share of renewable energy sources within the national energy mix. Overall, the results of this study demonstrate that the environmental impacts of sectoral emissions on ecological deficit in Iran are heterogeneous. Achieving ecological sustainability therefore requires a comprehensive and multidimensional policy approach. Such an approach should include structural reforms in the economic system, greater adoption and diffusion of green technologies, and fundamental changes in prevailing patterns of production and consumption. Only through coordinated efforts in these areas can Iran move toward a more balanced relationship between economic development and environmental sustainability.
 
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.
 
Authors’ Contribution
Authors’ Contributions: All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed collaboratively. All authors contributed to writing the manuscript and approved the final version.
 
Conflict of Interest
The authors declare that they have no conflict of interest.
 
Acknowledgments
The author(s) declare that there are no acknowledgments.