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Carbon Neutrality in the Middle East and North Africa: The Roles of Renewable Energy, Economic Growth, and Government Effectiveness

Chuimin Kong, Jijian Zhang, Albert Henry Ntarmah (ahntarmah@gmail.com), Yusheng Kong and Hong Zhao
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Chuimin Kong: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Jijian Zhang: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Albert Henry Ntarmah: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Yusheng Kong: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Hong Zhao: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China

IJERPH, 2022, vol. 19, issue 17, 1-24

Abstract: Carbon neutrality is a 21st-century priority area, with the Middle East and North Africa (MENA) countries making significant investments in renewable energy and climate mitigation initiatives to attain it. However, carbon neutrality research in the MENA region is under-developed, particularly when considering the roles of renewable energy, economic growth, and effectiveness of government. To address this gap, this research investigates the roles of renewable energy, economic growth, and government effectiveness toward the MENA region’s carbon neutrality goal. We implemented heterogeneous and second-generation panel data techniques that are resilient to cross-sectional dependency and slope heterogeneity to panel data spanning 16 MENA countries from 1996 to 2018. We discovered that MENA data are cross-sectionally dependent, heterogeneous, and cointegrated. We found that government effectiveness and renewable energy bring carbon neutrality closer, but economic growth initially delays it. We detected Environmental Kuznets Curve (EKC) in the MENA region, specifically in the High-Income Countries. Although there were signs of EKC in the Middle-Income Countries, this was not significantly validated. Finally, we found a one-way causal link from government effectiveness and renewable energy to carbon neutrality but a feedback mechanism between economic growth and carbon neutrality in the MENA region. As a result of these findings, it is recommended that the MENA region’s policymakers prioritize renewable energies and improve the effectiveness of government to drive economic growth toward the carbon neutrality goal.

Keywords: carbon neutrality; renewable energy; economic growth; government effectiveness; MENA region (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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