Effusions of carbon dioxide in MENA countries: inference of financial development, trade receptivity, and energy utilization

In the new golden era, the financial catastrophe, energy consumption, and environmental contamination are seen as a vital economic concern. Review of empirical study between financial developments, with trade, and the consumption of energy on emissions of CO2 has revealed no consensus in the literature. Therefore, this research scrutinizes the inference of financial development, receptivity of trade, and the utilization of energy on the effusion of CO2. The present study adopts FMOLS {fully modified ordinary least squares} and DOLS {dynamic ordinary least squares} estimators to investigate the nexus between the outlined variables for the case of ten MENA countries for annual data from 1970 to 2017. The major findings provide proof of a negative linkage between financial development and that of CO2 emission. Hence, higher financial development in the region over time will lead to more reduction of CO2 emission. However, the trade receptivity and energy utilization result to positive remarkable influence on the effusion of CO2. The major policy inference from this study is that expansion of trade or increase in trade openness as suggest by Environmental Kuznets curve phenomenon will reduce the emission of carbon in MENA region in the long run. Also, financial development causes a reduction in emission of carbon in the region. Thus, it is very essential for policymakers and government administrators of MENA countries to promote policies and activities that will enhance development financially and trade receptivity in the region. Energy consumption is found to increase the emission of carbon in the region; thus, there is need to ensure implementation of policies designed to secure efficient energy use and energy supply at the same actualizing the target of having supportable environment and enlargement of MENA nations' far-reaching projects in renewable energy.