Carbon emissions-income relationships with structural breaks: the case of the Middle Eastern and North African countries.

ABSTRACT

This article revisits the carbon dioxide (CO2) emissions-GDP causal relationships in the Middle Eastern and North African (MENA) countries by employing the Rossi (Economet Theor 21962-990, 2005) instability-robust causality test. We show evidence of significant causality relationships for all considered countries within the instability context, whereas the standard Granger causality test fails to detect causal links in any direction, except for Egypt, Iran, and Morocco. An important policy implication resulting from this robust analysis is that the income is not affected by the cuts in the CO2 emissions for only two MENA countries, the UAE and Syria.