The Impact of Elderly Population, Economic Growth and Energy Consumption on CO2 Emissions in the Middle East: Application of Panel Cointegration Approach

The main purpose of this article is studying the short and long run impact of elderly population, urbanization, economic growth and energy consumption on CO2 emissions in the Middle East. To this goal, a panel data of 12 Middle East countries over the period of 1990 to 2013 was used. In This study, according to stationary properties of the variables, the panel cointegration approach was applied. Also, based on the results of Pedroni and Kao cointegration tests, the short and long-run relationship was estimated by Error Correction Model (ECM) and Fully Modified Ordinary Least Square (FMOLS) respectively. The results imply that significant long run relationships exist among aged population, urbanization, per capita income and per capita energy consumption with environment pollution. Based on the panel cointegration model, empirical results showed that the relationships between elderly population and CO2 emissions per capita is U-shaped and statistically significant. Therefore, CO2 emission decrease at the initial stage of elderly population growth and then grows again with the increase of elderly population and the turning point is around 3 percent. Moreover, the results imply that a relative increase in urbanization, economic growth and energy consumption are positively affect CO2 emissions per capita.