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Analysis of import substitution policy with an emphasis on environmental issues based on environmental input–output (EIO) model

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  • Mohammad Aghapour Sabbaghi

    (Islamic Azad University)

  • Afsaneh Naeimifar

    (Islamic Azad University)

Abstract

The economic sanctions imposed against Iran have been significantly increased in recent years. Such sanctions usually target the business sectors of Iran and limit trade and monetary flows. Many studies have examined the various impacts of sanctions on Iran's economy. The economic strategies of countering sanctions, however, is an understudied subject in the economic literature. The most important policy that has been considered in dealing with sanctions is the import substitution policy (IS). Because in a situation where the country is facing a set of policies that affect foreign exchange earnings, employment and economic welfare, it is necessary to pay more attention to the resources and capacities of domestic production. But, IS policy to mitigate the negative effects of sanctions could increase air pollution and negative environmental effects. Therefore, in this study, the adjusted environmental input–output model has been used to estimate the value added, employment and emission of pollutants in 17 active economic sectors as a result of the implementation of an import substitution policy. The results of this study highlight the priority of investment in import substitution in economic sectors in terms of environmental impacts. More than 70% of the industries surveyed (12 industries) have high potential for pollution. In order to achieve the goals of sustainable development, it is recommended to develop an import substitution policy in sectors with high economic potential and low pollution. The three sectors of pharmaceutical and health products, textile products, wood and paper, food and beverage products have the highest investment priority.

Suggested Citation

  • Mohammad Aghapour Sabbaghi & Afsaneh Naeimifar, 2022. "Analysis of import substitution policy with an emphasis on environmental issues based on environmental input–output (EIO) model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 14130-14162, December.
    • Handle: RePEc:spr:endesu:v:24:y:2022:i:12:d:10.1007_s10668-021-02024-5
    DOI: 10.1007/s10668-021-02024-5
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