Abstract/Summary

This study explored the relationship between urbanization, energy consumption, and CO2 emission in the MENA countries. The panel model was utilized taking the period 1980–2009 into consideration. Pedroni cointegration test results showed that urbanization, energy consumption and CO2 emission were cointegrated. The dynamic OLS results also showed that there was a long run bi-directional positive relationship between urbanization, energy consumption, and CO2 emission. However,the significance of the long run relationship between urbanization, energy consumption, and CO2 emission varied across the countries based on their level of income and development. Moreover, long and short run bi-directional causal relationships were found between the variables based on the Granger causality test results. From the results of this study it is important for the urban planners and policy makers in the MENA countries to slow the rapid increase in urbanization. The level of energy consumption and CO2 emission in the MENA countries increased more than double. Thus slowing down the urbanization level can help reduce the level of pollution and energy consumption. In addition, the increased energy efficiency, implementation of energy savings projects, energy conservation, and energy infrastructure outsourcing reduce the level of pollution produced by urban areas.