The relationship between energy consumption, economic growth, and CO2 emission in MENA countries: Causality analysis in the frequency domain

Abstract

The study investigates the causal relationship between energy consumption, economic growth, and CO2 emission through both single- and multi-country Granger causality analysis in the frequency domain considering eight oil-rich MENA countries; namely, Algeria, Egypt, Iran, Iraq, Oman, Saudi Arabia, Tunisia, and the United Arab Emirates for the period 1975-2014. The panel frequency domain analysis detects more causal nexus between variables across different frequencies compared to the time domain causality. According to panel causality test results, energy conservation policies do not have an adverse effect on economic growth both in the short- and intermediate-run while their effects are negative in the long run. Moreover, policies to control air pollution can be designed by policymakers because of the absence of the causal nexus between economic growth and CO2 emission. (C) 2018 Elsevier Ltd. All rights reserved.