The impact of economic uncertainty, economic growth and energy consumption on environmental degradation in MENA countries: Fresh insights from multiple thresholds NARDL approach

Abstract

This paper explores the influence of economic policy uncertainty on environmental quality in selected MENA countries depending on an augmented STIRPAT model over the period 1970–2020. ARDL model and its extensions like augmented ARDL, augmented NARDL, and MTNARDL models are applied to detect any possible effect from uncertainty index to carbon dioxide (CO2) emissions. The empirical results reveal the validity of environmental Kuznet curve (EKC) curve in all the countries. Moreover, the results show that the uncertainty index enhances environmental degradation, especially in extremely large changes in Morocco, Turkey, and Iran. Besides, the findings reveal that energy consumption and population in the entire sample escalates CO2 emissions over the study period. Consequently, policymakers in MENA countries should consider the economic uncertainty index, particularly in light of its recent rise, when developing any strategies and plans aimed at improving environmental standards, as well as the need to encourage the use of renewable energies in order to increase the percentage of their contribution to total energy consumption.