Decarbonization Pathways in Selected MENA Countries: Panel Evidence on Transport Services, Renewable Energy, and the EKC Hypothesis

Michail Michailidis, Apostolos Kantartzis, Garyfallos Arabatzis and Eleni Zafeiriou ()
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Michail Michailidis: Department of Forestry and Management of the Environment and Natural Resources, Democritus University of Thrace, 68200 Orestiada, Greece
Apostolos Kantartzis: Department of Forestry and Management of the Environment and Natural Resources, Democritus University of Thrace, 68200 Orestiada, Greece
Garyfallos Arabatzis: Department of Forestry and Management of the Environment and Natural Resources, Democritus University of Thrace, 68200 Orestiada, Greece
Eleni Zafeiriou: Department of Agricultural Development, Democritus University of Thrace, 68200 Orestiada, Greece

Energies, 2025, vol. 18, issue 21, 1-34

Abstract: This study investigates the relationship between economic growth and environmental performance in selected Middle East and North Africa (MENA) countries through the lens of the Environmental Kuznets Curve (EKC) hypothesis. Due to data availability constraints, our sample includes Algeria, Egypt, Lebanon, Mauritius, Morocco, and Oman, covering the period 1990–2022. Using annual panel data, we apply panel cointegration techniques alongside Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimators, complemented by Granger causality tests, to examine the interaction among GDP per capita, renewable energy consumption, and transport service exports in determining CO 2 emissions per unit of GDP. The empirical findings provide only partial support for the EKC: while the DOLS results confirm an inverted U-shaped income–emissions relationship, the FMOLS estimations contradict it, suggesting a more complex and nonlinear pattern. Beyond testing the EKC, this study contributes two novel dimensions to the literature. First, it shows that renewable energy exerts a statistically significant negative effect on carbon intensity in the long run, despite weak short-run causality, highlighting the delayed but durable environmental benefits of clean energy adoption. Second, it introduces transport service exports as a proxy for structural economic transformation, capturing the role of trade-driven diversification in reducing emissions. By embedding renewable energy deployment and service-based trade dynamics into the EKC framework, the study advances a more policy-relevant and region-specific understanding of the growth–environment nexus in the selected MENA economies. The results underscore the importance of scaling renewable energy, promoting low-carbon service sectors, and aligning trade and environmental policies to ensure that economic growth supports long-term climate objectives.

Keywords: Environmental Kuznets Curve (EKC); CO 2 emissions; renewable energy; transport services; MENA region; DOLS; FMOLS; economic growth (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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