Innovations and the CO2 Emissions Nexus in the MENA Region: A Spatial Analysis

Abstract

Patents support technological innovations in any economy and would also support a clean environment. We investigate the effects of economic growth, patents, industrialization, and urbanization on CO2 emissions in 17 Middle East and North Africa (MENA) economies by applying spatial econometrics. We substantiate the Environment Kuznets Curve (EKC) in the domestic economies and the whole MENA region as per direct and total estimates. Moreover, urbanization increases CO2 emissions in local economies and reduces neighboring nations’ emissions. The total effect of urbanization is found to be insignificant. Industrial value added increases CO2 emissions in domestic and neighboring countries, as well as in the whole MENA region. Patents increase CO2 emissions in domestic economies. However, patents reduce CO2 emissions in neighboring countries and the MENA region. Thus, patents have a pleasant effect on the environment in the whole MENA region. It is suggested that the MENA economies focus more on patents to reduce CO2 emissions. Moreover, urbanization and the industrial sector should be checked to protect the environment.