The investigation of EKC within CO2 emissions framework: Empirical evidence from selected cross-correlated countries

Abstract

The present study investigates the relationship between economic growth, globalization, population density, energy consumption, trade openness, and carbon dioxide (CO2) emissions under the Environmental Kuznets Curve (EKC) framework for selected highly cross-correlated countries (Middle East and North Africa-MENA) from 1994 to 2014. The control variables are used based on previous empirical research. Cross-sectional dependence tests, cointegration analysis, panel data estimators (models with Driskoll-Kraay standard errors, FGLS, FMOLS, and DOLS), and Granger causality are performed. Empirical findings validate the EKC hypothesis and suggest that energy use significantly and negatively contributes to environmental quality. Moreover, globalization increases environmental degradation, whereas trade openness and population density may reduce carbon dioxide emissions within MENA economies. Policy implications towards economic growth decoupled from fossil fuels could benefit environmental upgrades and sustainability.