Role of Environmental Tax, Financial Development and Political Stability to Address the Renewable Energy Challenges: Empirical Study for MENA Region

Abstract

The rise in economic growth and use of energy in developing countries are causing a big increase in the environmental pollution that harms the public health. So, this study is about the incline towards renewable energy in developing countries. It looks at how things like having more money, taxing pollution, and having a stable government can help these countries to use more renewable energy. We have compiled the data from approximately 21 MENA countries from 1990 to 2020 using GMM and CSARDL approaches. The results from CSARDL matched the results from GMM, which makes the findings reliable and strong. The long- term findings showed that although green invention and the use of renewable energy cut emissions, financial development raises carbon emissions. However, there was a notable variation in the emigrations mitigating impacts of both variables, with green invention having a lesser significance with emission mitigation. While the short-run outcome likewise yield parallel conclusions, the magnitude of their measure is comparatively lower. The finding report the incorporation of green technology and renewable energy with financial sector will be useful to counter the environmental consequences.