Do natural resources and economic components exhibit differential quantile environmental effects?

Abstract

In view of the resource curse assumption, the environmental aspects of resource utilization are arguably posing more dangers to human existence. In the Middle East and North Africa (MENA) region, the region that holds more than 60% and 50% of the world's oil and gas reserves respectively, the need to examine the contribution of natural resources to environmental quality among other factors cannot be overemphasized. By leveraging on the novelty of observing the differential impact of natural resources and other economic components such as income and primary energy utilizations across the quantiles of carbon emission, this study implements the quantile regression approach alongside other relevant techniques to analyze data between 1990 and 2018 for selected countries in the MENA region including Saudi Arabia, Iran, Kuwait, Qatar, Algeria, Morocco, Oman, Egypt, and the United Arab Emirates (UAE). The result posits that natural resource utilization generally hampers the environment across the quantiles. However, this negative effect decreases until the 50th quantile before starting to rise again toward the upper quantiles. Additionally, primary energy utilization and globalization respectively worsen and improve environmental quantile, especially toward the upper quantiles while income affirms the inverted U‐shaped hypothesis across the entire quantiles. Moreover, there is a statistically significant one‐way directional causality from natural resources, economic expansion, primary energy use, and globalization to carbon emission levels. Hence, the study offers environmentally friendly resource utilization policies to the MENA economies and other resource‐rich states by extension.

Environmental quality outlook of the leading oil producers and urbanized African states

“…Over the years, incremental economic growth has also been closely associated with an increase in energy consumption alongside the rise in the rate of urbanization that is often observed as nations become industrialized (Jones 1991 ; Alola et al 2020 ; Rafindadi and Usman 2021 ; Onifade et al 2023a ). However, in most cases, this development also paves the way for the rise in CO 2 emissions due to the higher energy demand especially from unclean energy sources such as coal and fossil fuels energy utilization (Harmsen and Graus 2013 ; Salahuddin et al 2018 ; Alola and Alola 2018 ; Alola et al 2019a ; Bekun et al 2019 ).…”