Abstract
The maximum entropy bootstrap for time series is applied in this study to investigate the nexus between carbon emissions from electricity generation and the gross domestic product, using a bivariate framework for eight Middle Eastern countries between 1995 and 2017. The sample under study includes oil-producing countries such as Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. As the electricity generation in these economies relies mainly on oil and gas, finding out the existence and direction of the relationship between the two considered variables has remarkable implications for policymakers and governments in these countries to achieve both higher economic growth and environmental protection. As expected, this nexus is validated for all countries in the sample but not in all models, time periods, and lags. Therefore, policymakers can set appropriate electricity conservation policies based on these varied empirical findings to boost economic growth with minimum environmental degradation.
Highlights
Empirical literature on the nexus between carbon emissions from electricity generation (CEEG) and the gross domestic product (GDP) is still scarce, and the main goal of this study is investigating this relationship for oil-based economies in the Middle East that will help governments to implement appropriate policies
The findings of this paper indicate that the urbanization rate (PUR) stimulates electricity consumption before the threshold, and when the economic growth level crosses the threshold, this promoting impact will be significantly weakened
From the confidence intervals (CI) for TP3, it is possible to identify a bidirectional relationship between CEEG and GDP for lags m = 0, 1, while the neutrality hypothesis is assumed when m = 2 is considered (Model 3 and Model 6)
Summary
Economic growth has traditionally been measured by the gross domestic product (GDP), and its increasing trend has led to higher energy demand and exploitation of natural energy resources in recent decades. This extensive use of energy causes environmental degradation and increased greenhouse gas (GHG) emissions. The natural level of GHGs is essential for the normal mechanism of atmosphere and life on Earth, the recent increase in human population and activities through industrialization, agricultural development, deforestation, and the burning of fossil fuels have increased energy consumption and GHG emissions.
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