Abstract Climate change and global warming have been a focus of attention in several countries in recent years. Greenhouse gas emissions (GHGE) are one of the most significant contributors to an environmental hazard. Electricity generation is frequently associated with adverse environmental consequences resulting from fossil fuel use, with carbon dioxide emissions being the most concerning greenhouse gas issue. Thus, renewable energies (RE) development for electricity generation has been favored in recent decades. The current study's primary objective is to determine the impact of renewable energy development on Iran's carbon dioxide emissions. The study employs a system dynamics approach to examine the effects of renewable energy development in Iran in terms of carbon emissions and examined five distinct scenarios: increasing the feed-in tariff, eliminating fossil fuel power plant subsidies, gradually eliminating fossil fuel power plant subsidies, and two combined scenarios that consider the carbon cost of electricity generation. Based on this model, carbon emissions can be reduced by 7 %–41 % in the 2040 horizon than the Business as Usual (BAU) scenario.