How do energy productivity and water resources affect air pollution in Iran? New evidence from a Markov Switching perspective

Countries vary significantly in terms of the measures they have taken to address the climate change issues to mitigate the challenges posed by them. Understanding the causal relationships between the involved variables and their effect on other sectors like energy, economy, and water supply will aid in planning and implementation of the appropriate strategies to prevent a further deterioration in the situation. Therefore, the present study was conducted to investigate the causality relationships between the water resources, energy productivity, and air pollution in Iran from 1971 to 2014 using the Markov-switching vector autoregressive models based on two scenarios. In the first scenario, a Granger-causality analysis was carried out to evaluate the indirect unidirectional relationship between the energy productivity and water resources at different time scales. In the second one, the direct unidirectional Granger causality relationship was investigated between the energy productivity, water resources, and air pollution. Furthermore, the presence of an indirect Granger causality was surveyed for air pollution and water resources. Results also revealed a few practical recommendations to mitigate the harmful effects of the pollution.