The emissions of air pollutants and its consequences, particularly in the present conditions that the volume of these pollutants is increasing with an upward trend have drawn more attentions to dealing with its destructive effects. In this regard, financial development serves as a channel for modern technology compatible with environment. Financial development is capable of having direct role in energy consumption and consequently emissions of CO2. Accordingly, this research deals with the examining of financial development's effects on emissions of CO2 during 1973-2009 in Iran. In order to achieve the main objective of research, ARDL is used. The results of estimation prove the negative long term relationship between financial improvement and emissions of CO2. In addition, the results also show that there is a positive long term relationship between GDP, Energy intensity and the degree of economic openness with emissions of CO2.

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