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The Symmetric and Asymmetric Impacts of Energy Consumption and Economic Growth on Environmental Sustainability

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  • Atef Alshehry

    (Department of Business Administration, College of Business Administration, Najran University, Najran 61441, Saudi Arabia)

  • Mounir Belloumi

    (Department of Business Administration, College of Business Administration, Najran University, Najran 61441, Saudi Arabia)

Abstract

Climate change has emerged as a global challenge because of its threat to sustainable development goals. Fossil fuels and economic growth are responsible for pollution and, thus, for climate change. In this context, this study explored the environmental Kuznets curve hypothesis for the case of 17 MENA countries over the period of 1990–2020. It investigated the symmetric and asymmetric impact of energy consumption and economic growth on CO 2 emissions by controlling for population density, trade openness, and FDI inflows using panel linear and nonlinear ARDL models. The robustness of the results was checked using the fully modified OLS and dynamic OLS methods. Moreover, the Dumitrescu–Hurlin panel causality test was employed to determine the directions of causality between the variables. Overall, the empirical results of both panel linear and nonlinear ARDL models validate the environmental Kuznets curve hypothesis for the selected sample of MENA countries. Economic growth leads to environmental degradation only in the long run, whereas a rise in energy consumption leads to an increase in pollution in both the short and long run. These results are confirmed by the fully modified OLS and dynamic OLS methods. The findings of the Dumitrescu–Hurlin panel causality test also indicate the existence of bidirectional causality between energy consumption and CO 2 emissions and between economic growth and CO 2 emissions. Therefore, policy makers in the MENA region should invest in clean technologies and accelerate the transition to renewable energies such solar energy, wind power, and hydropower to align with sustainable development goals.

Suggested Citation

  • Atef Alshehry & Mounir Belloumi, 2023. "The Symmetric and Asymmetric Impacts of Energy Consumption and Economic Growth on Environmental Sustainability," Sustainability, MDPI, vol. 16(1), pages 1-17, December.
  • Handle: RePEc:gam:jsusta:v:16:y:2023:i:1:p:205-:d:1307477
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    References listed on IDEAS

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