Assessment of food-energy-environmental pollution nexus in Iran: the nonlinear approach

Iran's agricultural production has expanded significantly in recent years. Environmental pollution caused by the use of energy and chemical fertilizers, depletion of groundwater resources, and soil erosion, on the other hand, demonstrates a lack of attention to the environmental dimension of production in this country. In addition to these issues, climate change has exacerbated the agriculture sector's difficulties. This study intends to investigate the asymmetric relationship between energy consumption, chemical fertilizer consumption, CO₂ emissions, temperature changes, and production from 1961 to 2019 using the NARDL approach and Granger causality test in the frequency domain (Breitung and Candelon.). Short-term and long-term estimates revealed that the positive and negative shock effects of energy consumption on production are both positive. As a result, it was observed that the negative shock of increased energy consumption had a greater influence on agricultural output than the positive shock. In the long run, the positive shock of fertilizer use has a positive effect on and improves production. But the effect of a negative shock is insignificant. Furthermore, the negative shock of CO₂ emission has a positive effect on production. Finally, positive and negative shocks in temperature changes were discovered to have an increasing and reducing influence on production. The results of the Granger causality test in the frequency domain test showed that there is a bidirectional causality relationship between energy consumption and agro-production in the long term. There is also unidirectional causality from CO₂ emissions and fertilizer consumption to production and from production to climate change. According to the findings, reforming energy prices, investing in mechanized agriculture, shifting away from fossil fuel consumption towards renewable energy, and tending to green growth are all necessary to achieve multiple goals such as optimizing energy consumption, reducing environmental pollution, and improving efficiency.