The effects of green tax on Iran's economy

Background: This research was conducted with the aim of investigating the effects of green tax on Iran's economy. Methods: This was analytical research using the Nordhaus economic model. The data relating to torques and statistical tests were used to compare actual and model data to determine how well the designed Nordhaus model corresponds to the data on Iran's economy, t and f statistical tests were designed to determine the degree of conformity of the Nordhaus model, and the first and second-order coefficients were used for the variables. Data analysis of the gross domestic product, investment, government spending and oil revenue was used with GAMS software. Results: The values of the simulated and real characteristics did not differ significantly at the 95% confidence level(P-value=0.05), which shows the high compliance of the Nordhaus model with the real data of these variables. According to the Nordhaus model, green tax affects economic welfare. It reduces economic growth in the short term and increases it in the long term. By reducing production, the level of leisure increases and leads to compensate for the reduction in consumption due to reduced production and increased economic welfare. Conclusion: One percentage of increase in the rate of tax on return of capital leads to a reduction in consumption and a reduction in capital. Increasing the rate of tax on return of capital leads to increased tax revenues and helps governments to compensate for pollution costs and improve the quality of the environment.