Abstract
This paper examines the nexus between CO2 emissions, energy consumption and economic growth using simultaneous-equations models with panel data of 14 MENA countries over the period 1990–2011. Our empirical results show that there exists a bidirectional causal relationship between energy consumption and economic growth. However, the results support the occurrence of unidirectional causality from energy consumption to CO2 emissions without any feedback effects, and there exists a bidirectional causal relationship between economic growth and CO2 emissions for the region as a whole. The study suggests that environmental and energy policies should recognize the differences in the nexus between energy consumption and economic growth in order to maintain sustainable economic growth in the MENA region.
Interaction between CO2, energy and GDP for MENA countries. [Display omitted]
•We investigate the energy–environment–GDP nexus for 14 MENA countries.•We have used simultaneous equations models estimated by the GMM-estimator.•Results show bi-directional causal relationship between energy consumption and economic growth.•There is uni-directional causality from energy consumption to CO2.•There exists bi-directional causal relationship between economic growth and pollutant emissions.