Effect of Economic Growth, Population, Energy Consumption and Trade on Environmental Quality in MENA Region Countries

Document Type : Original Article

Authors

1 Public Sector Economics, Lorestan University, Khoram Abad

2 Science and Research University, Ahvaz

Abstract

In recent decades, concern about global warming as a result of rising greenhouse gas emissions has increased. Accordingly, the identification of factors affecting the emission of greenhouse gases is important. In this regard, the main objective of this study is to investigate concurrent the short and long term relationships between economic growth, population, energy consumption, and trade with the CO2 emissions (as an indicator of environmental quality index) in the MENA region, using data from the 1990-2013 period. For this purpose, firstly, the research model has been specified and after doing usual panel unit root and co-integration tests in panel data, to estimation short and long term coefficients has been used pooled mean group method (PMG). The results indicate a positive impact of economic growth (per capita income) on the CO2 emissions for MENA countries in the long-term and short-term, indicating that these countries are on the upward side of the Kuznets curve. Also, the effect of population, energy consumption and trade on air pollution is positive in the short and long term in the MENA region countries; So that, with a one-percent increase in population, energy consumption and trade variables, CO2 emissions increase in the long-term by 0.36, 0.88 and 0.15 percent respectively, and in the short run by 0.16, 0.52 and 0.07 percent respectively. So can say that in these countries, economic growth, population, energy consumption and trade, causes the CO2 emissions.

Keywords


Balali, H.; Zamani-Dadandeh, O. & Yousofi, A. 2013. The Relationship between Economic Growth and Environmental Pollution in Oil Sector with Emphasis on Oil Price Volatility: Case Study of Iran, JPBUD. 18(3): 49-66. (in Persian)
Baltagi, B. 2005. Econometric analysis of panel data, Third Edition, McGraw-Hill.
Barghi Oskouei, M. M. 2008. The impact of trade liberalization on the greenhouse gases (CO2 emission) in EK", Journal of Economic Research 43(1): 1-21. (in Persian)
Bengake, C. & Eggoh, J. C. 2011. The Feldstein–Horioka puzzle in African countries: A panel co-integration analysis, Economic Modeling. 28: 939–947.
Blackburne, E. F. & Frank, M. W. 2007. Estimation of nonstationary heterogeneous panels, The Stata Journal. 7(2): 197-208.
Bulte, E. H. & Soest, D. P. 2001. Environmental degradation in development countries: Households and the (reverse) environmental Kuznets curve, Journal of Development Economics. 65(1): 225-235.
Dargahi, H. & Bahrami Gholami, M. 2011. The GHGs emissions determinants in selected OECD and OPEC countries and the policy implications for Iran: (Panel Data Approach), Iranian Energy Economics. 1(1): 73-99. (in Persian)
Farhani, S.; Chaibi, A. & Rault, C. 2014. CO2 emissions, output, energy consumption, and trade in Tunisia, Economic Modeling. 38: 426-434.
Grossman, G. & Krueger, A. 1991. Environmental impacts of a North American free trade agreement, NBER Working Paper. No. 3914.
Grossman, G. & Krueger, A. 1995. Economic growth and the environment, Q. J. Econ. 110: 353–377.
Im, K. S.; Pesaran, M. H. & Shin, Y. 2003. Testing for unit roots in heterogeneous panels, Journal of Econometrics. 115: 53-74.
Jamel, L.; Derbali, A. & Charfeddine, L. 2016. Do energy consumption and economic growth lead to environmental degradation? Evidence from Asian economies, Journal Cogent Economics & Finance. 4: 125-148.
Kao, C. 1999. Spurious regression and residual-based tests for co-integration in panel data, Journal of Econometrics. 90: 1-44.
Levin, A.; Lin, C. & Chu, C. J. 2002. Unit root tests in panel data: Asymptotic and finite-sample properties, Journal of Econometrics.108: 1-24.
Lopez, R. & Mitra, L. 2000. Corruption, pollution and the Kuznets environment curve, Journal of Environmental Economics and Management. 40: 137-150.
Makoto, C.; Akimasa, F.; Shinji K.; Phetkeo P.; Satoru K. &  Andrey K. 2014. The  moderating  effects  of  urbanization  on  carbon  dioxide  emissions:  A  latent  class  modeling approac, Technological Forecasting & Social Chang. TFS-17922.
Mirzaei, A.; Dehghanpour, H.; Bakhshoodeh, M. & Jamshidi, S. 2016. Factor affecting disinvestment in environmental protection of MENA countries (panel data instrumental variables method), Journal of Environmental and Natural Resource Economics. 1(1), 95-110. (in Persian)
Mohammadbghery, A. 2010. Investigating the short-term and long-term relationships between GDP, energy consumption and carbon dioxide emissions in Iran, Energy Economics Studies Energy Economics Studies. 1(27), 102-132. (in Persian)
Motafakkerazad, M. & Khaneghahi, M.R. 2012. The impacts of economic growth, energy consumption and openness on the environmental quality In I. R. Iran, Iranian Energy Economics. 1(3): 89-106. (in Persian)
Nasrollahi, Z. and Haddian, A. 2018. The effect of population growth on environment in Iran and other countries in the MENA region. Quarterly Journal of the Macro and Strategic Policies. 6(21): 40-60. (in Persian)
Ozcan, B. 2013. The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: A panel data analysis. Energy Policy, 8: 1-10.
Pedroni, P. 2004 Panel co-integration, asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis, Econometric Theory. 3: 597-625.
Pesaran, H.; Shin, Y. & Smith, R. 1999. Pooled Mean Group estimation and dynamic heterogeneous panels, Journal of the American Statistical Association. 94: 621–634.
Saboori, B.; Sulaiman, J. & Mohd, S. 2012. Economic growth and CO2 emissions in Malaysia: A co-integration analysis of the Environmental Kuznets Curve, Energy policy. 51: 184–191.
Simoes, C. N. 2011. Education composition and growth: A pooled mean group analysis of OECD countries", Panoeconomicu., 4: 455-471.
Tamizi, A. 2016. Determinants of CO2 emissions in developing countries using Bayesian econometric approach, Quarterly Journal of Applied Theories of Economics. 2(4): 145-168. (in Persian)
Taylor, M, S. & Copeland, B. R. 1994. North-south trade and the environment, the Quarterly Journal of Economics. 109: 755-787.