Renewable and Non-Renewable Energy Nexus for Sustainable Development of the MENA Region

The world is growing at a rapid rate and so is the negative effect of man-made effort in increasing economic growth. As a country looks forward to increase her level of growth, the same level of enthusiasm should be applied to make it sustainable. To analyze this, Adjusted Net Savings is empirically modelled by utilizing Renewable Energy Consumption, Energy Use and control variables (Trade and GDP) using data from 9 developed countries and 9 developing countries in the MENA region between 2000 and 2017. The Granger causality test between adjusted net savings and energy use showed a one-way causality relationship while having a bi-directional relationship with renewable energy consumption. To measure the turning point between both sources of energy analyzed, we employ the quadratic regression function to find the turning point from the nonlinear model specification. The minimum level of sustainability is higher in developed countries compared to developing countries hence, developing countries still heavily dependent on conventional sources of energy will need higher levels of adjusted net savings to cater for the externalities of their energy choices. Keywords: Adjusted Net Savings, Renewable Energy Consumption, Energy Use, Sustainable Development. Dynamic Common Correlated Effects Estimator