Industrial Production and Carbon Emissions: A Comparative Analysis of Selected Arab and European Countries (1990–2023)

Abstract

The study investigated the impact of industrial production on carbon emissions in selected European countries versus selected Arab countries. Using the econometrics methodology by applying the Granger Causality Test, (OLS) Model, Fixed Variable Panel data VS Random Variable Panel data models. The results showed that industrial production causes carbon emissions and vice versa in the EU countries, as for the case of Arab countries industrial production does not cause carbon emissions, this may reflect the differences between the volume of industrial production in each case, this result is consistent with (Abokyi et al., 2019),  in addition there is an impact of industrial production on carbon emissions in both groups of countries, this means that every rise in industrial production leads to a corresponding rise in carbon emissions, which aligns well with the current reality and is supported by (Xiaoqing & Jianlan, 2011). The study recommends targeting sectors like chemicals, cement, and iron and steel petrochemicals, which account for over 70% of total emissions, aligning with the findings of (Brown et al., 2012). Alternatively, it is crucial to measure the emissions generated by industrial operations to comprehend the worldwide carbon balance and create an appropriate climate strategy, as stated by (Liu, 2016). The study also recommends stimulate an industrial investment environment compatible with environmental protection and carbon reduction considerations in Arab countries highlighting the importance of using new and renewable energy and clean technology in manufacturing from all countries of the world so that it can achieve sustainable development.