Iranian Agricultural Economics Society (IAES)

The Role of Agriculture in Environmental Pollution in Iran: An Application of the Nonlinear Autoregressive Distributed Lag (NARDL) Model

Document Type : Research Article

Authors

1 Department of Nature Engineering Shirvan Faculty of Agriculture University of Bojnord Shirvan, Iran

2 iran

10.22067/jead.2026.95581.1379
Abstract
The Role of Agriculture in Environmental Pollution in Iran: An Application of the Nonlinear Autoregressive Distributed Lag (NARDL) Model

Introduction:

The agricultural sector, which provides a significant portion of employment and livelihoods in rural areas of Iran, is increasingly leveraging new technologies, inputs, and land to meet domestic and international demand. Despite these developments, the environmental consequences of these trends are not negligible. The growing use of chemical fertilizers and pesticides, unsustainable exploitation of water resources, land use change, and increased consumption of fossil fuels in the production and transportation chain of agricultural products are among the factors that have exacerbated environmental pollution in the country. Therefore, this study investigates the role of the agricultural sector, alongside other factors, in environmental pollution in Iran.

Materials and Methods

To investigate the asymmetric response of environmental pollution to the studied variables, the Nonlinear Autoregressive Distributed Lag (NARDL) model was employed. The study period extends from 1961 to 2022. The necessary data were collected from the online databases of the Food and Agriculture Organization (FAO) and the World Bank.

Results

The estimation results of the Nonlinear Autoregressive Distributed Lag (NARDL) model indicated that the estimated model in this study is stable, and any shock or change is adjusted within 4 periods (with an error correction coefficient of -0.25). Rural population, the share of the agricultural sector in the economy, and financial liberalization, with coefficients of 0.09, 0.08, and 0.05 respectively, had the most significant positive impact on pollution. The variables of industry’s share in the economy (industrialization) and negative shocks to trade liberalization had a negative effect on pollution. Furthermore, the agricultural sector, in the long run (0.8), has a positive impact on environmental pollution. The long-run coefficients related to positive and negative trade liberalization variables indicate the existence of an asymmetric effect. Specifically, positive shocks in trade liberalization (an increase in the ratio of trade volume to GDP) have a positive and significant effect on output. The long-run coefficients for positive and negative shocks were estimated to be 0.03 and -0.015, respectively.

Conclusion

Considering the role of influential variables on environmental pollution, this study emphasizes the necessity of paying special attention to rural development planning, agricultural production methods, and financial flow management to mitigate negative environmental impacts. In particular, the significant positive long-term impact of the agricultural sector on environmental pollution underscores the importance of reviewing agricultural policies and promoting sustainable agriculture. Industrialization (the share of the industrial sector in the country’s total value added) has a negative effect on environmental pollution. One reason for this finding could be attributed to factors such as Iran’s industrial structure (a high share of light industries, such as food and textiles, which have lower pollution levels) and the lack of industrial disaggregation (due to using the total industrial value). Therefore, it is recommended that future studies use variables such as industrial energy consumption, CO2 emissions from industries, or industrial waste generation. The asymmetric effects of trade liberalization on pollution indicate that environmental pollution in Iran is more sensitive and reactive to an increase in trade liberalization than to its decrease. Furthermore, the direct effects of free trade on pollution support the existence of the “pollution haven hypothesis” in Iran. In other words, although trade liberalization can offer economic benefits, in the absence of appropriate environmental policies, investment in clean technology, and strengthened regulatory capacity, trade liberalization might come at the cost of environmental degradation and an increased ecological footprint. Hence, it is necessary to shift the country’s trade structure (exports/imports) towards clean technologies, green product exports, and international environmental cooperation. In short, this asymmetry highlights the complexity of the relationship between trade and the environment and underscores the need to design trade policies that, while reaping economic benefits, also manage their negative environmental consequences.

Acknowledgments

This article was supported by financial aid from Bojnourd University and was conducted as a research project.

Keywords: Pollution, Agriculture, Trade Liberalization, Asymmetric Response, Ecological Footprint

This article was supported by financial aid from Bojnourd University and was conducted as a research project.

Keywords: Pollution, Agriculture, Trade Liberalization, Asymmetric Response, Ecological Footprint

This article was supported by financial aid from Bojnourd University and was conducted as a research project.

Keywords: Pollution, Agriculture, Trade Liberalization, Asymmetric Response, Ecological Footprint

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Articles in Press, Accepted Manuscript
Available Online from 23 September 2026

  • Receive Date 22 September 2025
  • Revise Date 23 August 2026
  • Accept Date 23 September 2026
  • First Publish Date 23 September 2026