The consumption of renewable energy as a clean and sustainable alternative and its impact on economic growth in the MENA region

Abstract

Energy, a fundamental pillar of the global economy, plays a vital role for all countries. Its crucial importance in development and its links with multiple aspects of sustainable development are widely recognized. However, the predominance of fossil fuels has led to environmental pressures, adversely impacting society, the economy, and the ecosystem. Transitioning to environmentally friendly renewable energy sources is not just a choice but an imperative to mitigate pollution and reduce dependence on traditional energies. Our study, which offers a unique and novel perspective on the impact of renewable energy consumption on economic growth in the Middle East and North Africa (MENA) region, proposes that transitioning to renewable energy sources can significantly promote sustainable and inclusive growth. Renewable energy has emerged as a clean, sustainable alternative and a critical global energy supply pillar. Given their economic and environmental importance, advancements in developing and implementing renewable energies are considered vital priorities. Our study, with its practical implications specifically tailored for policymakers, aims to understand the impact of renewable energy consumption, population growth, and exports on economic growth in the MENA region. Using a robust econometric methodology based on the ARDL model, we analyze the relationships between these variables from 1991 to 2020. The data, meticulously collected from the World Bank and pre-processed to avoid missing values, provides empirical evidence on the determinants of economic growth in the MENA region. Our findings suggest that if implemented, our study’s proposed policy recommendations can significantly promote sustainable and inclusive growth in the area. This makes our study a crucial resource for those interested in the region’s economic and environmental development, particularly policymakers seeking to drive sustainable economic growth.