The Relationship Between Economic Growth, Energy Consumption and CO2 Emission in the Middle East and North Africa (MENA)

Research background: CO₂ emissions are considered to be the main reason for global warming, and for this reason, their regulation is a very important issue for governments. Due to the increasing use of energy, carbon dioxide emissions have increased dramatically over the past century, with a direct link to economic growth and development. The relationship between CO₂ emissions, growth and energy consumption is therefore at the heart of current economic issues.

Purpose: This study aimed at examining the relationship among economic growth, carbon dioxide (CO₂) emissions and energy consumption in selected MENA countries, in the period 1995–2017.

Research methodology: To prove these relations, a stationary data panel methodology is used supported by unitary root and cointegration tests.

Results: The results indicated that there is a long-term relationship between CO₂ emissions, energy consumption and GDP. In addition, it is found that the elasticity of CO₂ emissions with respect to energy consumption is less than one (inelastic), and the elasticity of CO₂ emissions with respect to GDP suggests the existence of an Environmental Kuznets Curve. An important finding is that energy consumption has a positive but relatively low effect on CO₂ emissions. To reduce CO₂ emissions, the countries of the MENA region are being called upon to increase significantly the use of renewable energies and the establishment of a more efficient energy policy.