A Spatial Econometric Analysis of Carbon Dioxide Emissions in Selected Middle Eastern Countries

Document Type : RESEARCH PAPER

Authors

1 Associate Professor, Department of Economics, University of Qom, Qom, Iran

2 Ph.D. Graduate in Economics, International Economics specialization, Department of Economics, Mofid University

Abstract

This study investigates the spatial determinants of carbon dioxide (CO₂) emissions in selected Middle Eastern countries, emphasizing the significance of cross-border environmental externalities. Since CO₂ emissions are not confined within national boundaries, analyzing their spatial dynamics provides insights into the need for regional cooperation. The paper contributes to the environmental economics literature by applying advanced spatial econometric techniques to identify both direct and spillover effects of energy production, energy intensity, and electricity generation structure on CO₂ emissions in the region.
This study employs a Spatial Autoregressive Panel Model (SAR) with country- and time-fixed effects for six Middle Eastern countries over the period 2002–2019. The model allows for the control of unobserved heterogeneity at both the country and time levels. Spatial interactions are captured through a spatial weight matrix reflecting geographical proximity and shared borders. The key explanatory variables include per capita oil production, per capita energy consumption, energy intensity, and the composition of electricity generation (fossil-, gas-, and oil-based sources). Furthermore, a series of diagnostic tests are conducted to assess the presence of spatial autocorrelation.
The results indicate that CO₂ emissions exhibit a strong and significant spatial correlation (spatial autoregressive coefficient = 0.5814), such that national emissions are substantially influenced by those of neighboring countries. Furthermore, per capita oil production has a positive and significant effect on CO₂ emissions, highlighting the environmental costs of resource dependence. In contrast, per capita energy consumption and energy intensity exert a negative and significant impact on emissions. Fossil-based electricity increases CO₂ emissions, whereas gas- and oil-based electricity generation contribute to their reduction, although their effects are only marginally significant.
This study demonstrates that CO₂ emissions in the Middle East transcend national boundaries, rendering unilateral policies insufficient for their reduction. Effective mitigation requires the adoption of coordinated regional strategies that account for spatial interdependencies. The evidence underscores the necessity of reducing oil dependence, promoting cleaner technologies, and strengthening regional cooperation to control transboundary pollution and address climate change. Overall, the findings highlight the importance of incorporating spatial and economic interdependencies into environmental policymaking in resource-dependent regions.

Keywords

References

References
 
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