Document Type : Original Article
Authors
1
PhD Candidate, Department of Economics, Faculty of Management, Economics and Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran
2
Assistant Professor, Department of Economics, Faculty of Management, Economics and Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran.
3
Assistant Professor, Department of Economics, Faculty of Management, Economics and Accounting. Tabriz Branch, Islamic Azad University, Tabriz, Iran.
4
Associate Professor, Department of Economics, Faculty of Management, Economics and Accounting. Tabriz Branch, Islamic Azad University, Tabriz, Iran.
10.22034/jdesd.2025.9210.1297
Abstract
Along with economic growth, industrialization has led to environmental pollution and the emission of harmful gases. The objective of the present research is to investigate the impact of the development of the banking sector on environmental pollution and carbon dioxide emissions in Iran. The study covers the period from 1984 to 2020, employing the Markov switching model with two regimes: high and low pollution emissions. The results show that an increase in money supply can lead to higher national production, and consequently, higher carbon dioxide emissions in the low pollution regime. However, in the high pollution regime, this effect is negative. The impact of changes in Mudarabah and Salaf contracts on carbon dioxide emissions is consistent in both regimes and remains significant in the high pollution regime. In the low pollution regime, banking facilities have a positive and significant impact on carbon dioxide emissions, while Jaala contracts have a negative and significant effect. In the high pollution regime, however, these impacts are insignificant. The study suggests that continued economic growth will likely lead to increased carbon dioxide emissions. Therefore, it is crucial to implement policies aimed at reducing carbon emissions both nationally and globally.
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