Maryam ASGHARI - Resaercher in Environmental Economics and International Trade, Assistant Professor at Shahid Ashrafi

The differences in financial development between advanced countries are pronounced.It has been observed, both theoretically and empirically, that these differences incountries’ financial systems are a source of comparative advantage and trade. The framework in which differences in financial development are an endogenous determinantof environmental degradation is only appropriate if we believe that a country’s financial system is endogenously, it will in turn be influenced by trade and foreign direct investment(FDI). The analysis of environmental Kuznets curve (EKC) is one of the most controversialhypotheses examining the interactions between economic growth and environmental degradation. The logic of EKC analyses is rather appealing. In the first stages of economicgrowth (industrialization stage) natural resources are degraded intensively, and environmental pollution grows rapidly (Harbaugh et al. 2002). In this paper, I examine the effect of economic and financial development on the environmental quality in North region The results indicate economic development decrease environmental quality, but financial development increase environmental quality. Also, the EKC shows the inverted-Urelationship between GDP per capita and CO2 emission per capita

Environmental Kuznets Curve, Financial development, Economic Development