Foreign direct Investment–CO2 emissions nexus in Middle East and North African countries: Importance of biomass energy consumption

By Muhammad Shahbaz, D. Balsalobre-lorente, Avik Sinha. Journal of Cleaner Production, 2019

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Abstract This study examines the association between foreign direct investment (FDI) and carbon emissions for the Middle East and North African (MENA) region in 1990–2015, including biomass energy consumption as an additional determinant of carbon emissions. We apply the generalized method of moments (GMM) to validate the existence of the pollution haven hypothesis (PHH). The N-shaped association is also validated between FDI and carbon emissions. The link between economic growth and carbon emissions is inverted-U and N-shaped; that is, it satisfies the environmental Kuznets curve (EKC) hypotheses. Biomass energy use lowers carbon emissions, and the causality analysis reveals that FDI causes CO2 emissions. Clearly, the results confirm the existence of a feedback effect between economic growth and carbon emissions. The connection between biomass energy use and CO2 emissions is also bidirectional. The empirical findings suggest policy makers to design comprehensive trade and energy policies by targeting the cleaner production practices, for not only to ensure environmental sustainability, but also to fulfil the objectives of sustainable development goals.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/8981d05ced41d8ec80751e24fb69de00b9ca07f9

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How renewable energy consumption contribute to environmental quality? The role of education in OECD countries (2020, background): “23 (2018) for 5 European countries and Sinha and Shahbaz (2018) for India.”