Abstract
This study investigates the relationship between economic growth, final consumption, investment, energy use and CO2  emissions in two groups of Middle East and North Africa (MENA) countries: Oil Poor Countries (OPC) and Oil Rich Countries (ORC). It is assumed and verified that the structural relationship between GDP growth, energy use and CO2  emissions is different in these two groups of countries. FGLS panel estimations were carried out over the period 1974–2014. In ORC, no significant relationships are observed between energy use and GDP, whereas CO2 emissions and GDP are positively linked. In OPC, there are opposite connections: a positive link between GDP and energy use, whereas the impact of CO2  emissions on GDP tends to be negative. In both groups of countries, a positive and bi-directional link is observed between energy use and CO2  emissions. The strength of this link is twice bigger in OPC than in ORC. This indicates that CO2 reduction policies conducted through energy use control (quantitative and qualitative) will have higher effect in OPC than in ORC. This also shows that the relationships between economic growth, energy use and CO2  emissions differ noticeably and structurally between OPC and ORC. These results provide new insights into the opportunities and threats faced by CO2 reduction policies in OPCs and ORCs.
Highlights
Increasing CO2 emissions pose a serious threat to the environment, which is a common anxiety for both developing and developed countries (Zhang et al, 2015; Muhammad & Khan, 2019)
This study investigates the relationship between economic growth, final consumption, investment, energy use and CO2 emissions in two groups of Middle East and North Africa (MENA) countries: Oil Poor Countries (OPC) and Oil Rich Countries (ORC)
As shown by Muhammad (2019), a positive impact of CO2 emissions on energy use is observed in the MENA countries7; it is stronger in OPC than in ORC
Summary
Increasing CO2 emissions pose a serious threat to the environment, which is a common anxiety for both developing and developed countries (Zhang et al, 2015; Muhammad & Khan, 2019). The relationship between the environmental pollution and economic growth, as well as energy consumption, has been an area of intense research. In a poor country with poor oil endowment, investment decisions in green vs fossil energy production may have important consequences for their international competitiveness and long-term growth prospects. They may face the traditional tradeoff between early stage economic growth and environmental preservation hypothesized by the EKC. This work tries to address this question by focusing on the impact of countries oil endowments on the relationship between economic activities, energy use and environmental damages caused by CO2 emissions.
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