Sustainability in Arab Countries: An Investigation of the Relationship Between Economic Development and Energy Consumption

Abstract

Sustainability in 19 different Arab countries has been studied through investigating the relationship between economic development and energy consumption. Data collected has been studied as a whole (Total countries data) and as segregated data (Oil exporting and Oil importing countries data) i.e. three categories. The regression model used measures the effect of independent and control variables i.e. [GDP/capita, dummy variables, interaction of dummy variables with GDP, GDPPC², Government Health Expenditure (% of GDP), Manufacturing Exports (% merchant exports), Export (% GDP) and Polity2] on energy intensity of human wellbeing (EIWB) (dependent variable). These independent and control variables when analyzed have shown different coefficients signs (positive/negative) and different significant/non-significant values based on what category has been understudy. Results showed that Economic development has impacted EIWB significantly and positively (1995–2013) for total countries data and oil exporting countries; but not for oil importing ones. Second, GDPPC squared had the same result trend as that of the preceding point in terms of signage and significance. Third, GDP/capita and GDPPC squared results also has led to the conclusion that total countries data and oil exporting countries data support the environmental Kuznets curve trajectory; while oil importing countries do not. Finally, control variables, dummy variables and interaction, have shown different results within the three categories under study; these results ranged from significant to insignificant and from positively to negatively related ones. Hence, these results propose that there could be significant heterogeneity across countries in their routes in the direction of or away from sustainability.