Environmental sustainability in North Africa within the Environmental Kuznets Curve and the pollution Haven-Halo hypotheses

Abstract

The North African countries—Morocco, Algeria, Tunisia, Libya, and Egypt—share similar semi-arid climates, ethno-linguistic characteristics, colonial histories, and structural development challenges, especially those related to atmospheric pollution and climate disruption. Thereby, this paper investigates environmental sustainability in this region by exploring the correlation between greenhouse gas (GHG) emissions, a metric of environmental degradation, and its main drivers, including demographic growth, advanced education, Foreign Direct Investment (FDI) inflows, Gross Domestic Product (GDP) and energy use per capita, operating under the energy-augmented STIRPAT framework and using the PMG-ARDL long-run modeling from 1980 to 2023. The novelty of this study lies in its assessment of environmental sustainability in this regional context with the application of the environmental Kuznets curve (EKC) and the pollution Haven-Halo hypotheses (PHV-PHH) simultaneously. Our findings indicate that, except for advanced education, all other variables contributed to environmental degradation. Furthermore, in contrast to the econometric results and the graphical illustration of the GHG emissions with the quadratic term of GDP, which do not conform to the inverted U shape of the EKC and yield a positive sign in the regression system, the results with the quadratic term of FDI support the PHV-PHH, resulting in a negative sign. Moreover, the spillovers effects are confirmed through the cross-countries dependence tests. In light of these findings, targeted policy actions with specific incentives, fully adapted for the North African context are proposed in order to promote its sustainability in this region.