One of the most important concerns related to industrialization is the effects and environmental consequences of industrial activities. Therefore, achieving the necessary solutions to control such consequences is vitally important. Minerals are essential for human survival. In this study, the economic effects of environmental pollutants of Gol Gohar Iron Mine in Sirjan (Southeastern Iran), is investigated using the input distance function model from 2001 to 2022. Through calculating the shadow price of pollutants, a criterion for determining the green tax is determined, and then the amount of social cost resulting from the emission of pollutants is calculated. The products of Gol Gohar Iron Ore Complex in Sirjan, include granulated iron ore, iron ore concentrate and pelletized in the production process. The most greenhouse gases and air pollutants are related to carbon dioxide (CO2), sulfur oxides (Sox), nitrogen oxides (Nox) and particulate matter (SPM). According to the obtained results, the average shadow price for air pollutants in Gol Gohar complex for CO2, Sox Nox, and SPM was calculated as 454, 5798,2998, and 1355 rials per kilogram respectively. Moreover, the average total social costs resulting from the production of Gol Gohar Sirjan Complex was calculated as 11793.5 billion Rials according to the amount of pollution produced over the period. The estimation of environmental costs is actually an introduction to providing solutions for internalizing and reducing environmental costs, using the input distance function model and the shadow price of environmental pollutants in the industrial and mineral complex of Gol Gohar, Sirjan.

Aim and Introduction

Today, the environment is considered as one of the most important pillars of sustainable development, and the development of other economic and social sectors depends on its sustainability and proper functioning. Environmental pollution has become one of the main challenges of countries. Environmental health is currently one of the most critical concerns of people and officials round the world. Almost all managers and decision makers believe that this national wealth should be protected not only for the current generation but also for future generations, since the pollutants caused by industries are highly costly and detrimental to health.

Active industries are one of the main sources of environmental pollution. One of the necessary conditions for economic progress and the introduction of extensive structural changes in economic and technological fields is industrialization and industrial development. In the production process, using production inputs whose main source is the environment, in addition to desirable outputs such as consumer goods, undesirable outputs such as environmental pollutants are also produced. If the number of outputs is not controlled and disproportionate, the losses from undesirable outputs will be greater than the benefits of desirable products in such a way that damages to the environment would be irreparable and sustainable development less likely to be achieved.

One of the most important concerns related to industrialization is the effects and environmental consequences of industrial activities. Therefore, achieving the necessary solutions to control such consequences is vitally important. Minerals are essential for human survival, but their extraction and processing are not environmentally friendly practices which contribute to problems such as soil erosion, air and water pollution. On the other hand, mineral sector is one of the largest energy consumers which has active contribution to air pollution and global warming. The main purpose of this study is to investigate the economic effects of Gol Gohar mine in Sirjan. For this purpose, it is intended to determine the type and amount of pollutants released from this complex, and also to determine the amount of the green tax of the complex as a solution to reduce pollution and examine the social welfare resulting from reducing pollution.

Methodology

In this study, the economic effects of environmental pollutants of Gol Gohar Iron Mine in Sirjan (Southeastern Iran), is investigated using the input distance function model from 2001 to 2022. Through calculating the shadow price of pollutants, a criterion for determining the green tax is determined, and then the amount of social cost resulting from the emission of pollutants is calculated.

The shadow price of the undesirable output is the cost that the producer must bear if they plan to reduce the production of the undesirable output. In fact, it can be interpreted as the marginal cost of reducing pollution for each producer. Therefore, the shadow price of the desirable output is considered positive and equal to the market price of that output, but the shadow price of the undesirable output must be estimated to be less than zero.

Findings

The products of Gol Gohar Iron Ore Complex in Sirjan, include granulated iron ore, iron ore concentrate and pelletized in the production process. The most greenhouse gases and air pollutants are related to carbon dioxide (CO2), sulfur oxides (Sox), nitrogen oxides (Nox) and particulate matter (SPM). According to the obtained results, the average shadow price for air pollutants in Gol Gohar complex for CO2, Sox Nox, and SPM was calculated as 454, 5798,2998, and 1355 rials per kilogram respectively. Moreover, the average total social costs resulting from the production of Gol Gohar Sirjan Complex was calculated as 11793.5 billion Rials according to the amount of pollution produced over the period.

Discussion and Conclusion

The estimation of environmental costs is actually an introduction to providing solutions for internalizing and reducing environmental costs, using the input distance function model and the shadow price of environmental pollutants in the industrial and mineral complex of Gol Gohar, Sirjan. The title of the largest producer of iron ore in the country was calculated, and the social cost resulting from the emission of pollutants was also evaluated. Finally, in this study, solutions and mechanisms for reducing environmental costs have been proposed.

Considering that the ability to absorb pollutants by the environment is limited, the shadow price of pollutants, which represents their real social cost, should be taken into consideration. The damages should also be determined based on the shadow price of the pollutants. In other words, the amounts of pollutant emission should be calculated and while taking into account the allowed limit of pollutant emission and shadow prices, based on a legal plan, the environmental costs should be reimbursed. Taking such measures would surely require more studies and capable executive management system.