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Long-run equilibrium relationship between energy consumption and CO2 emissions: a dynamic heterogeneous analysis on North Africa

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Abstract

Environmental protection and sustainable development are inextricably linked. This linkage is particularly crucial for North Africa, where the use of carbon-intensive energies has created environmental and economic challenges. Amazingly, limited studies on the connection between energy consumption and environmental quality has been conducted to help with policy options to minimize the above menace in the region. Inspired by the Sustainable Development Goals (SDGs) of the United Nations, this study contributed to filling this gap by examining the energy consumption–CO2 emission nexus in North Africa for the period 1990 to 2018. In order to account for cross-sectional dependence, endogeneity, and slope heterogeneity that are mostly ignored by some conventional econometric techniques, this exploration adopted second generation econometric methods that are robust to the aforestated issues in its analysis. From the results, the studied panel was heterogeneous and cross-sectionally correlated. Also, the investigated series were first differenced stationary and cointegrated in the long-run. The cross-sectional augmented autoregressive distributed lag (CS-ARDL) and the dynamic common correlated effects mean group (DCCEMG) estimators were adopted to explore the elasticities of the explanatory variables and from the results, energy consumption worsened environmental quality in the region due to its positive influence on CO2 emissions. Also, urbanization and economic growth increased the rate of CO2 emissions in the countries. On the causal connections amid the series, bidirectional causalities between energy consumption and CO2 emissions, between urbanization and CO2 emission, between economic growth and CO2 emissions, and between urbanization and energy consumption were unraveled. Finally, unidirectional causalities from economic growth to energy consumption, and from economic growth to urbanization were confirmed. It is recommended that countries in North Africa should shift to the consumption of clean energies to help them attain low-carbon economy. Unavailability of data for some periods was the major limitation of the study. Therefore, in future when such data become available, similar explorations could be conducted to confirm the robustness of the study’s results.

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Data availability

The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.

Abbreviations

EC:

energy consumption

URB:

urbanization

GDP:

economic growth

CO2 :

carbon emissions

CS-ARDL:

cross-sectional augmented autoregressive distributed lag

DCCEMG:

dynamic common correlated effects mean group

AMG:

augmented mean group

MENA:

Middle East and North Africa

WDI:

world development indicators

CADF:

Cross-sectionally Augmented Dickey–Fuller

CIPS:

Cross-sectional Im, Pesaran, and Shin

IEA:

International Energy Agency

BRIC:

Brazil, Russia, India, and China

NAFTA:

North American Free Trade Agreement

OLS:

ordinary least squares

DOLS:

dynamic ordinary least squares

FMOLS:

fully modified ordinary least squares

TCE:

transport carbon emissions

TEN:

transport energy consumption

GCC:

Gulf Co-operation Council

UMI:

Upper Middle Income

ARDL:

autoregressive distributed lag

SSA:

Sub-Saharan Africa

ASEAN:

Association of Southeast Asian Nations

SDGs:

Sustainable Development Goals

LPG:

liquefied petroleum gas

MG:

mean group

CCEMG:

common correlated effects mean group

PMG:

pooled mean group

EKC:

Environmental Kuznets Curve

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MM conceptualized and wrote the final manuscript. MO supervised the study. FB aided in drafting the original manuscript. FI helped in analysis and discussions. IAM analyzed the data and aided in discussions. SKA contributed data. JKA helped in editing the final manuscript. All authors read and approved the final manuscript.

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Musah, ., Owusu-Akomeah, M., Boateng, F. et al. Long-run equilibrium relationship between energy consumption and CO2 emissions: a dynamic heterogeneous analysis on North Africa. Environ Sci Pollut Res 29, 10416–10433 (2022). https://doi.org/10.1007/s11356-021-16360-6

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