Environmentally Subsidies, an Approach to Control Greenhouse and Pollutants Gases in the Economic Sectors of Iran (Case Study: Agricultural Sector)

Economic activity can be perceived as a process of transformation of materials and energy. Since matter and energy cannot be destroyed in their notion of absolute, therefore, they reemerge in the form of waste and eventually return to the environment; hence, the environmental degradations are quantifiable by the economic indicators and awareness of the social payments. In this study, by using the concept of marginal abatement cost of undesirable outputs, the input distance function was estimated to measuring the shadow price of the greenhouse and pollutants gases in the agricultural sector in the period of 1991-2011 as the required costs in this sector for the abatement activities of the pollutions. The results showed that in the case of protectionist activities in controlling pollutants and greenhouse gases in the agricultural sector of Iran, an average per ton of the pollutants per year, above the rate of 19 million RLS is needed to provide environmental subsidies. Finally, it was suggested that considering the role of each provinces in establishing the emissions abatement cost, distribution of environmental subsidies in the agricultural sector of the provinces be taken.

JEL Classification: Q51, C02, D22