Rethinking Carbon Neutrality Pathways in MENAT: Unveiling the Roles of Social Globalization, Energy Intensity, and Human Capital Through the Environmental Kuznets Curve and STIRPAT Framework

Abstract

As the world races toward carbon neutrality, the true test lies not in ambition but in implementation, particularly in regions such as the Middle East, North Africa, and Türkiye (MENAT), where energy demand is accelerating and emissions trajectories remain uncertain. Despite increasing global focus on decarbonization, the MENAT region remains empirically underexplored, with limited and often inconclusive evidence on the environmental impacts of structural factors such as energy intensity, human capital, social globalization, and financial globalization. This study addresses these gaps by integrating the Environmental Kuznets Curve (EKC) hypothesis with the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) framework, employing an empirical strategy using panel data from MENAT countries covering the period from 2000 to 2021. Utilizing a suite of robust panel estimators, our results suggest that there is a U-shaped connection between income and CO2 emissions, which invalidates the EKC hypothesis. Additionally, energy intensity, human capital, and urbanization are found to increase emissions, whereas technological innovation, social globalization, and financial globalization contribute to CO2 emissions reduction. The panel heterogeneous causality tests give insights on the inference causality between CO2 emissions and its drivers. These results highlight the urgent need for MENAT economies to embed renewable energy, low-carbon technologies, and sustainability-focused policies into the core of their development agendas to prevent the intensification of emissions alongside rising income levels.