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Abstract
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This article aims to answer the question of whether the manufacturing (and mining) and
services sectors in Iran should be reconstructed or grown as before, in order to improve the
environmental quality. The global warming, if not global burning, is a dire warning about
environmental pollution dangers to everyone, living on the Earth. In this field, Iran is a good
candidate due to its significantly high share of CO2 emissions in proportion to the low share
of economic growth in the world which can be remedied by economic growth, based on
Environmental Kuznets Hypothesis (EKH). We employ the Auto-Regressive Distributed
Model (ARDL) to examine the long run equilibrium relationship between CO2 emission and
economic growth. The results show that, regarding EKC, the nexus of CO2 emissions and
economic growth in either sector is in a sharply ascending phase. It implies that if
manufacturing (and mining) and services sectors inflate, the quality of environment will
decline owing to the intensive and pollutant energy-using structures. Thus, rather than
growing, they should be reconstructed by importing cleaner and more efficient technologies
and developing internal inventions.
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