Exploring the dynamic nexus between urbanization, energy efficiency, renewable energies, economic growth, with ecological footprint: A panel cross-sectional autoregressive distributed lag evidence along Middle East and North Africa countries

Abstract

The release of greenhouse gases (GHG) is acknowledged as a serious hazard that fuels climate change (CC). The Middle East and North Africa (MENA) countries face particular environmental challenges due to its contribution to carbon dioxide emissions (CO2). There is, however, a scarcity of literature about the region's environmental challenges, despite its vulnerability to the consequences of CC. Therefore, the purpose of this research is to look at various solutions to the CC issue in the MENA area, that is, energy efficiency (EE), economic development, urbanization, fossil fuel (FF) usage, and renewable energies (RE). Further, the study seeks to evaluate CO2 emissions in the region by establishing a RE index. By applying the fresh technique known as the cross-sectional autoregressive distributed lag estimator to panel data for 18 MENA countries from 1990 to 2019, this study quantifies the impact of these variables on CO2 emissions. The findings reveal that the explanatory variables’ significance varies across regional panel clusters, with economic growth having a significantly positive effect on CO2 emissions in the long run. Moreover, the study rejects the Environmental Kuznets Curve hypothesis validation and highlights the importance of EE in boosting environmental quality in the long and short runs. Additionally, the outcomes suggest that RE contributes to reducing CO2 emissions, while the urbanization level and FF consumption adopted by MENA countries do not improve their environment. Thus, mitigating the negative consequences of CC in the MENA area necessitates encouraging EE and lobbying for a shift from FF to RE sources.