Abstract
The aim of this study is to investigate the long-term relationship between real gross domestic product (GDP), energy consumption (EC), and carbon dioxide (CO2) emissions using: (i) fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) estimates, to deal with the bias of endogeneity regressors and the countries' heterogeneity, and (ii) a pooled mean group (PMG) estimator, to involve both pooling and averaging for a dynamic specification based on the auto-regressive distributed lag (ARDL) model. Regarding five North African countries (Morocco, Algeria, Tunisia, Libya and Egypt) over the period of 1971-2014, our empirical findings seem relevant in the light of economic developments, and indicate that increased energy consumption gives rise to both GDP growth and increased CO2 emissions, as a result of more pollution. This leads us to conclude that North African countries should improve the productivity of their energy by increasing: (i) the implementation of energy-saving projects, energy conservation, energy efficiency, and energy infrastructure, while outsourcing to achieve GDP growth as well as increasing their investment in full-energy-potential projects, and (ii) the use of more renewable energy in order to mitigate emissions.