Qusai Mohammad Qasim Alabed

This study provides new evidence regarding the nonlinear relationship between energy consumption and economic growth in the Middle East and North Africa (MENA) region for the 1990–2014 period. The empirical estimation is conducted using a dynamic panel threshold model. We found one threshold in the relationship between energy consumption and economic growth and one threshold in the relationship between carbon dioxide (CO₂) emissions and economic growth. The results indicate that energy consumption positively and significantly affects economic growth in the low energy consumption regime. In contrast, it has a negative and significant impact on economic growth in the high energy consumption regime. Moreover, CO₂ emissions are positively and significantly related to economic growth in the low regime of CO₂ emissions. Nevertheless, the relationship between CO₂ emissions and economic growth in the high CO₂ emissions regime is negative and significant. Therefore, policymakers should implement other effective energy policies, such as stricter regulations on CO₂ emissions, increase energy efficiency, and replace fossil fuels with cleaner energy sources to avoid unnecessary CO₂ emissions and combat global warming. Future studies should identify the root causes of failures and issues in real time for inflation and link the energy–growth nexus to achieving the 2030 Sustainable Development Goals (SDGs) Agenda, Goal 7: Affordable and Clean Energy.