The role of environmental quality as a public good in dynamic macroeconomic models has been the subject of much research and study over the past two decades. Governments are always looking to reduce the effects of environmental taxes by imposing ecological taxes on the externalities of economic activities, so they can eliminate these destructive activities and prevent the destruction of the environment. Considering the low focus of researchers on Ramsey models and the development and use of these models for economies such as the Iranian economy, which is considered a limitation, this research, by designing a Ramsey model with special conditions, investigates the long-term characteristics of a general equilibrium model for a Ramsey economy with the assumption of endogenous labor in the presence of negative externalities for Iran's economy. The results indicate that in a Ramsey model, despite the environmental externalities, it will result in the imposition of taxes as a policy, where capital taxes are imposed in the long term. In addition, the endogeneity of labor has led to the creation of a communication channel between consumption and labor, which creates a substitute between consumption and labor. Furthermore, the choice and substitution of consumption between periods in this model indicate the substitution of consumption between present and future consumption, which is another result of this modeling.

The environmental quality as a public good has received significant attention in dynamic macroeconomic models over the past two decades. Governments aim to mitigate the adverse effects of economic activities by implementing environmental taxes, thereby preventing environmental degradation. Given the limited focus on Ramsey models in domestic research, this study designs a Ramsey model with specific conditions to examine the long-term characteristics of a dynamic stochastic general equilibrium (DSGE) model for Iran’s economy, incorporating endogenous labor and negative environmental externalities. The findings suggest that capital taxation emerges as a long-term policy instrument. Moreover, labor endogeneity creates a substitution channel between consumption and labor, and intertemporal consumption choices reflect a trade-off between present and future consumption.
Introduction

Considering the role of environmental quality as a public good in dynamic macroeconomic models over the past two decades, many foreign studies have focused on this aspect. Governments, due to the importance of the environment, always seek to prevent environmental degradation by imposing taxes on environmentally harmful activities. On the other hand, increasing awareness about the environment puts more pressure on governments to reconsider their environmental policies. In the late 1960s, the issues of public policy regarding the environment began to be seriously discussed. Economists sought to design a theoretical framework that would allow them to depict new policy directions for this challenge.

Materials and methods
This research utilizes economic and environmental literature, and draws on studies by Angelopoulos et al. (2010), Xepapadeas (2005), Izadi (2023a, 2023b), Economides and Philippopoulos (2008), to introduce a dynamic stochastic general equilibrium (DSGE) model with exogenous labor. It ranks various environmental policy tools under uncertainty, illustrating that governments impose taxes on polluting activities and subsequently use the revenues to finance activities that reduce pollution. This study also incorporates the research by Bovenberg and Smulder (1995) which examines the relationship between environmental quality and economic growth using an endogenous growth model that includes pollution-increasing technological changes.

Results and discussion
The presence of side effects in the model leads to changes in the results and creates a positive and constant (non-zero) capital tax in equilibrium. Additionally, endogenous labor has increased environmental awareness, causing households and agents to make employment and production decisions based on environmental quality. This results in the improvement of environmental quality following a positive shock introduced by households regarding the weight of environmental quality. Ultimately, based on the model's diagrams and impulse response functions, it can be concluded that both model assumptions are validated. Incorporating environmental side effects into the model leads to changes in tax rates, and environmental awareness and information also influence economic agents' decisions, thus confirming the model's two assumptions.

EXTENDED ABSTRACT

Introduction

Considering the role of environmental quality as a public good in dynamic macroeconomic models over the past two decades, many foreign studies have focused on this aspect. Governments, due to the importance of the environment, always seek to prevent environmental degradation by imposing taxes on environmentally harmful activities. On the other hand, increasing awareness about the environment puts more pressure on governments to reconsider their environmental policies. In the late 1960s, the issues of public policy regarding the environment began to be seriously discussed. Economists sought to design a theoretical framework that would allow them to depict new policy directions for this challenge.

Materials and methods
This research utilizes economic and environmental literature, and draws on studies by Angelopoulos et al. (2010), Xepapadeas (2005), Izadi (2023a, 2023b), Economides and Philippopoulos (2008), to introduce a dynamic stochastic general equilibrium (DSGE) model with exogenous labor. It ranks various environmental policy tools under uncertainty, illustrating that governments impose taxes on polluting activities and subsequently use the revenues to finance activities that reduce pollution. This study also incorporates the research by Bovenberg and Smulder (1995) which examines the relationship between environmental quality and economic growth using an endogenous growth model that includes pollution-increasing technological changes.

Results and discussion
The presence of side effects in the model leads to changes in the results and creates a positive and constant (non-zero) capital tax in equilibrium. Additionally, endogenous labor has increased environmental awareness, causing households and agents to make employment and production decisions based on environmental quality. This results in the improvement of environmental quality following a positive shock introduced by households regarding the weight of environmental quality. Ultimately, based on the model's diagrams and impulse response functions, it can be concluded that both model assumptions are validated. Incorporating environmental side effects into the model leads to changes in tax rates, and environmental awareness and information also influence economic agents' decisions, thus confirming the model's two assumptions.


Conclusion
Considering environmental policies and their role in reducing air pollution, as well as the findings of this research and the relationship between the environment and public health and welfare benefits, increasing green tax rates is very effective in preventing pollutant emissions. Therefore, the government should place more emphasis on approving and implementing green tax policies in society. Alongside this, they can also utilize tools such as regulations, fines, and financial incentives. Moreover, changing and improving energy consumption technologies toward environmentally friendly technologies will be highly effective. Reducing fossil fuels and replacing them with clean energy, such as wind and electric energy, are also other suitable and proposed solutions. A tax on fossil fuels will indirectly reduce air pollutants by decreasing fuel demand and consumption. Additionally, energy subsidy removal policies should be implemented. Implementing appropriate monetary and fiscal policies to control inflation and its effects in the country is crucial because higher inflation causes more people to leave their homes to earn income, leading to increased traffic and congestion, thereby exacerbating air pollution.