Models of Green Economy in Arab Countries Using the Environmental Performance Index

Transcription

1 MPRA Munich Personal RePEc Archive Models of Green Economy in Arab Countries Using the Environmental Performance Index Ahmed Driouchi and Hajar El Alouani IEAPS, Al Akhawayn University, Ifrane, Morocco 19. September 2014 Online at MPRA Paper No , posted 25. September :52 UTC

2 Models of Green Economy in Arab Countries Using the Environmental Performance Index By: Ahmed Driouchi and Hajar El Alouani, IEAPS, Al Akhawayn University, Ifrane, Morocco Abstract This paper aims at characterizing the main trends affecting the environmental and greening economy systems in Arab countries. This is tackled through the use of data based on Environmental Performance Index (EPI) with statistical analysis of its related indicators. Promising results are attained based on descriptive statistics, trend and regression analyzes besides comparison of oil and non-oil exporting countries. The attained results show that Arab countries express different patterns with regard to environmental performance and greening of their economies while statistically significant differences appear between oil and non-oil exporters. Keywords: green economy, environmental performance index, oil and non-oil exporting countries. JEL: Q5, O2

3 Introduction This paper aims at showing the major environmental trends and differences in environmental performance and in the development of green economy in Arab countries. As this set of economies is composed of oil exporting and non oil exporting countries, statistical tests are devoted to showing similarities and differences between these two groups of economies. This is motivated by the increasing roles of environmental systems in economic sustainability of individual, regional and global economies. The present paper is a follow-up to a previous version (El Alouani & Driouchi, 2014) where the focus was placed on several dimensions that included also energy. After a review of literature that relates to the greening initiatives undertaken by different Arab economies, the sources of data used with emphasis on Environmental Performance Index are introduced. Descriptive statistics and regression analysis are respectively performed with the results discussed in each section. A set of appendices related to sections II and III, is added to support the results and findings discussed in the text. I. Literature Review Examples of Arab countries going green are provided in the FEMISE report (World Bank, 2012a) where most of the directions underlined above are already expressed in series of initiatives. Most of these country projects are taking place in North Africa and Jordan. These initiatives are cited in this paper. But, other publications, conferences and reports such as those by Abaza, Saab and Zeitoun (2011), UN-Escwa (2012), UN-Escwa, Las and Unep (2011), Krishnan and Leed (2013),

4 Khoday (2011) and UNDP (2013) indicate the greening trends and initiatives taking place in Arab economies. In April 2009, Morocco implemented a new policy of replacing dirty diesel with clean one. This new diesel is drastically less polluting than the dirty one and has necessitated $850 million injected to the Moroccan refinery. This initiative comes within the new politics of the kingdom of purer air (World Bank, 2012a). In Egypt, the environmental service provider Veolia and the Governorate of Alexandria developed a public-private partnership to take care of the region s waste management (World Bank, 2012a, p. 27). This partnership not only led to a cleaner area but to 4,500 new positions. In Tunisia, the eco-leaf program develops a recycling system for packaging waste (World Bank, 2012a, p. 27). In addition to gathering more plastics and metal, this project helped create more jobs mainly for university graduates. There is a participation fee associated with the program, but other sources of financing such as taxes and the World Bank Carbon Finance program are also involved. In Tunisia, a system to reuse water was developed in the Hammamet region. Wastewater was reused to irrigate two golf courses (World Bank, 2012a). This project successfully preserved the golf courses while generating 170 new positions. In 2000, Jordan built a new treatment plant to reuse wastewater. This mission partly solved the water scarcity problem that the country faces. Just like the other projects developed in the region, this plant generated thousands of direct and indirect jobs. The plant also served its purpose and is now providing 10% of the total national water allocation (World Bank, 2012a). In Egypt, a large food manufacturing company began new environmental actions to diminish its energy use. Water recycling methods were settled and heating was optimized in order to require

5 minimum costs. This strategy participated in reducing the fuel consumption by 40% (World Bank, 2012a). In Tunisia, an automobile batteries constructor invested $522,500 to diminish pollution and infection, which in turn made him save nearly $1.5 million each year (World Bank, 2012a). Morocco has undertaken several projects in collaboration with the Moroccan State Secretariat for Water (SEEE) and the Mediterranean Action Plan (MAP). The constraint of such projects is to find the right balance between developing the coasts touristic activities and guarding the biodiversity of the bay. Billions of dollars were invested to create job opportunities and develop touristic projects that would improve the inhabitants living standards (World Bank, 2012a). Tunisian coasts have been getting more populated during the past years. This trend has come with the issues associated with growing population. Less water is available and the air is more polluted leading to a less attractive touristic environment. Therefore, the country has involved in projects aiming to protect the two regions of Tabarka and Djerba in parallel to the demographic and touristic development these coasts are experiencing. For instance, scuba diving and fishing have been regulated in such a way that no one will impair the other and that the diversity of the area is preserved (World Bank, 2012a). In 2007, Amman s project of the Greater Amman Municipality (GAM) or what is referred to as the Amman Master Plan was to build new offices, high end flats, and infrastructure while preserving the patrimony zones and developing green energy sources (World Bank, 2012a, p.37). In Morocco, a new city Zenata is being built on 1,205 acres. The characteristic of this urban area is that it is an Eco2 city, i.e.: a city meeting certain ecological standards such as reduced energy consumption. This agglomeration would contribute in creating new jobs and

6 providing citizens housing in addition to protecting the environment and avoiding pollution (World Bank, 2012a). In Egypt, a new law was passed to forbid any public transportation vehicle that is 20 years or older from obtaining or renewing their license. Cabs were also concerned by this regulation and their owners had the option to submit their cars for recycling. They would then obtain a financial compensation to help them get a new vehicle. In Cairo only, 41,000 vehicles were substituted. This new reform will reduce large amounts of CO2 emissions participating in maintaining cleaner air (World Bank, 2012a). In Constantine (Algeria), a new aerial tramway started operating in Up to 24,000 passengers can use this new infrastructure daily through a large range of operating hours. Ten similar projects are being developed in Algeria to ensure a better transportation system to more citizens (World Bank, 2012a). Morocco has been collaborating with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to analyze the current situation of the kingdom and develop a new regulatory set of actions that could be taken to improve the environmental policies of the region. The main areas involved are water, coastal, and waste management (World Bank, 2012a). For a long time in Jordan, fuel subsidies were available to compensate for the price sudden jumps. However, in a politics of reducing fuel consumption, these subsidies were progressively reduced commencing This strategy involved bonuses to low-income households and increases in the minimum wages to ensure a smooth transition (World Bank, 2012a). In 2006, Morocco has introduced a Corporate Social Responsibility (CSR) label to acknowledge how companies are dedicated to green development of the region. This label was

7 developed by the Confédération Générale des Entreprises du Maroc (CGEM) and is based on accredited auditors reports and suggestions, and the firm s commitment to implementing the auditor s recommendations (World Bank, 2012a). In parallel to the main financial functions of the Moroccan Caisse des Dépôts et de Gestion (CDG) such as ensuring sustainable development in its projects, it participates in actions to preserve environmental matters. In 2009, with the help of the French Caisse des Dépôts et Consignations (CDC), the CDG created a new entity to reforest thousands of hectares and involve the wood production field to be environmental friendly. Another collaboration with the European Investment Bank (EIB) led to a fund whose mission is to strengthen the Kyoto Protocol in Morocco through renewable energy projects for example (World Bank, 2012a). In 2010, the Tunisian government with the help of the Global Environment Facility and Agence Française de Développement worked on an initiative to reduce electricity consumption through appliances. The first step was to impose compulsory power consumption labels on machines. The second one was to meet Minimum Energy Performance Standards (MEPS) (World Bank, 2012a, p. 80). The whole strategy would result in major reductions of electricity consumption and savings in imports and investment costs in gas and electricity. Private institutions are managing Jordan s protected areas. Sustainable development is a key element for Jordan and efforts are made to maintain the ecosystem of such areas. The country is now trying to find the perfect balance between public and private management to ensure protection of natural resources (World Bank, 2012a). Water management in Morocco is not only a government priority but is sometimes supervised by residents. A good example is in an Oasis where the cooperative Al Madania was

8 created. The 50 members of this organism found new ways to manage their water consumption in order to increase their cultivations (World Bank, 2012a). The Tunisian national agency for energy management (ANME) participated with other governmental entities to decrease new buildings energy consumption. A Total of 46 projects were undertaken around the country and the energy reduction in each building reached 33% (World Bank 2012a). II. The Variables and Data Used The Environmental Performance Index (EPI) is mainly a method of quantifying and numerically benchmarking the environmental performance of policies by country. The Environmental Sustainability Index (ESI) that was published between 1999 and 2005 preceded the EPI. Both indexes were developed by Yale University (Yale Center for Environmental Law and Policy) and Columbia University (Center for International Earth Science Information Network) in collaboration with the World Economic Forum and the Joint Research Centre of the European Commission. (Yale, 2012) The Environmental Performance Index (EPI) is composed of Environmental Health (EH), Ecosystem Vitality (EV), Environmental Burden of Disease (EHEH), Air (effect on human health) (EHAIR), Water (effect on human health) (EHWATER): Air (ecosystem effect) (EVAIR), Water resources (ecosystem effect) (EVWATER), Biodiversity and Habitat (EVBH) Agriculture (EVAG), Forests (EVFOREST), Fisheries (EVFISH) and Climate change and Energy (EVCLIMATE). Data on different components and on the aggregate EPI are available and data for the period 2000 to 2012 are used in this analysis with the coverage of large numbers of countries and include all Arab countries. (Yale, 2012).

9 III. Empirical Analysis and Results EPI scores (Yale, 2012) vary widely across Arab countries and so do their trends over time. In 2010, Egypt scored the highest value for EPI (55.2) and Iraq the lowest one (25.3). Arab countries also vary in their amount of progress their EPI is showing over years as represented by the value of regression coefficients obtained. Egypt, Libya, and UAE are the most performing Arab countries. On the average, their EPI value is increasing by 0.569, 0.356, and respectively every year. In a second position come Algeria, Jordan, Lebanon, Morocco, Oman, Qatar, and Yemen with positive regression coefficients that do not exceed 0.3 increases in EPI value per year. Iraq, Kuwait, and Saudi Arabia are the least performing as their EPI value show a decrease over the years by amounts that do not exceed 1 EPI score per year(-.018, -.162, -.115, ) EH and EV scores have different pattern of change over time as with EPI. A value increase appears in the EH score of Algeria, Egypt, Jordan, Lebanon, Libya, Mauritania, Morocco, Oman, Saudi Arabia, UAE, Yemen. Among those countries, only Iraq, Jordan, Libya, UAE, and Yemen along with Bahrain and Qatar that show an increase in the EV score as well, while Saudi Arabia, Oman, and Algeria show a decrease in their EV scores. EH however declines in Iraq and Kuwait. EH increases the fastest in Egypt and Algeria with coefficients of and EH score per year respectively, and EV increases the fastest in Bahrain with a pace of 1.69 EV score per year. For the rest of the countries, the increase or decrease in EH as well as EV scores per year is less than 1. Within each of the two policy objectives EH and EV, the trend pattern for the sub-indicators differ across the countries and the sub-categories.

10 EHEH score increased over the years in all the Arab countries to the exception of Kuwait where it has decreased on the average by 0.1 per year. The Coefficients of determination obtained from the analysis reach 97% for most countries; they show indeed the strong correlation of EHEH scores and time. The most performing Arab countries in this sub-category register growth rates of 1.6, 1.56, and 1.41 and are respectively UAE, Oman, and Egypt. The rest of the countries mark growth rates that are less than 1. The Environmental Performance Index ranks UAE as the first country to score the highest value of EHEH improvement in the world during the past decade. Oman ranks 7 th, Yemen, Morocco, and Egypt ranks 10 th, 11 th, and 12 th respectively. EHAIR, the second sub-category within EH shows a different picture about the environmental performance of Arab countries. A bigger variation exists across the countries; Lebanon, Bahrain, and Qatar have held their EHEH at its maximum (100) during the last decade, while Yemen displayed the lowest values among Arab countries of an EHAIR score of 34.7 in Among countries, Algeria, Egypt, Jordan, Libya, and Mauritania are the ones improving the air s effect on the human health within their territories to varying degrees. Libya and Tunisia could reach maximum score during the last years of the past decade. The rest of countries including Iraq, UAE, Kuwait, Oman, Saudi Arabia, Morocco, and Yemen have witnessed a fall in their EHAIR scores. In fact, the first three countries in this category are ranked the three lowest countries in the world for their trend rank. Variance of environmental performance across Arab countries is further stressed when analyzing data for EHWATER, the last sub-category within EH. Qatar has held its score at its maximum of 100 for the entire last decade. Mauritania had a score of 8.1 in 2010, only increasing slightly from the 5.6 score in Sudan and Yemen also figure among the lowest scores countries with scores of 11.3 and 16 respectively. In general, the EHWATER were kept almost constant

11 over the year with minor improvement in few countries and more important growth in Egypt that went from 52.3 to 71.0 in 10 years. While the average of European countries is around 61, most Arab countries are doing poorly in improving the effect of air on ecosystems, which reflects on their EVAIR scores. The least performing country in this sub-category is Kuwait with a score of 9.8 in Algeria is the most performing Arab country with a score of 61 in It is improving the fastest over time with a growth rate of 1.54 EVAIR score per year. Most other countries have positive growth rates lower than 1, while Kuwait and Sudan have regressed slightly. As for EVWATER, while European countries score swing around 37 on the average, Most Arab countries show far lower values that have been constant over the entire last decade. Bahrain for example scores 0, Lebanon 3.4, Qatar 9, Syria 7.6, Tunisia and Morocco 9.0. Countries with scores above 29.0 are Mauritania, Algeria, Oman and Sudan While the same sample of European countries have succeeded in raising their score of EVBH from 65 to 77 during the ten year period studied, most Arab countries have kept theirs constant over almost the entire period. The exception to that is Bahrain which went from 1.3 in 2000 to 57.9 in 2003 and till Score vary from 0.6 in Syria to 99.0 in Saudi Arabia. The same steadiness applies to EVAG with scores varying from 0.0 in Libya and Mauritania to scores above 60 for most of the other countries to 97.0 in Sudan while the average in European countries has improved to reach 46.6 in As far as forestry is concerned, Arab countries are different in their EVFOREST scores and the way they change over time. Linear increase in the value of the score is noticed in Mauritania at a rate of 6.51 EVFOREST score per year and Sudan but important step back has been made in

12 Saudi Arabia with a rate of 4.72 EVFOREST score per year. In a less important rate, Algeria and Tunisia are also regressing. The rest of the countries have held their scores elevated and constant over time. The pattern of change in EVFISH score during the last decade was such that most Arab countries have witnessed a fall in their scores. Some at important rates exceeding 1.5 EVFISH score per year like in Algeria, Lebanon, Sudan, and Syria, and reaching 2.6 per year in Egypt; others at a less important rate that do not exceed one and are in progressive order of their fall rate: Tunisia, Morocco, Kuwait, Yemen, UAE, and Bahrain. Libya is the only country, which have progressed over time and has reached in 2010 the highest score among the rest of the countries of Analysis of EVCLIMATE data show that Arab countries vary once again in both their score values and trend of change. In general, the rate of linear change, either positive or negative, does not exceed 1 for any of the countries. Countries, which have been improving their scores, are Bahrain, Jordan, Libya, Qatar, and Tunisia. Countries, which have had a fall in their scores, are Yemen, Syria, Sudan, Saudi Arabia, Oman, Egypt, and Algeria. These trends are introduced in country tables that are shown in appendix I. These trends are for the period For the aggregate variable EPI, all the estimated trends are positive and with statistically significant coefficients except for Kuwait, Iraq and Saudi Arabia. IV. Results of Comparisons of Models of green economy in Arab Countries The variables used to represent Arab countries are oil activities and mainly oil consumption (cos), and oil rents (rent). They are assumed to be affecting environmental

13 performance. The variables used to characterize environmental sustainability levels are those related to the EPI indicators. The regressions are run for all Arab countries and then for the groups 1 and 2 as oil and non-oil exporters respectively. The results of these three sets of regressions are shown in tables of appendix II. A chow test is then used to test of the existence of any difference between the two groups of Arab economies. The outcomes of the chow test are shown in appendix III. The objective of this test is to determine whether there exists a significant difference between the oil exporting and oil non-exporting Arab countries in terms of their environmental behavior. This is achieved by summing the residual sum of squares when separate regressions are run for the two groups subsamples, and comparing it against the residual sum of squares from the pooled sample regression via the following statistical measure: This test allows determining whether there is a significant reduction in the residual sum of squares when we subdivide the pooled sample of countries into two categories depending on their oil export activity and run separate regressions. Multiple regressions are run for each of the EPI sub-variables on the two oil variables. The F statistic is calculated for each of the individual EPI variables. Results are shown in the table below where the test statistic values are displayed in the right-most column. The critical value of F against which these F values are compared is:

14 F(3,170) = 2.65 (2.70) at 5% significance level Or F(3,170) = 3.88 (3.98) at 1% significance level. The non-exporting countries (group 1) taken in this analysis are Jordan, Lebanon, Morocco, Egypt, and Tunisia. The exporting ones (group 2) are: UAE, Algeria, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, Syria, and Yemen. The results show values above the statistically critical ones for the following EPI indictors: EPI, EV, EVAIR, EVWATER, EVBH, EVAG, EVFISH, EVCLIMATE, SO2CAP, SO2GDP, WATUSEINV, PACOV, POPs, TCEEZ, CO2CAP, CO2KWH, and RENEW. We conclude from that, the existence of a difference between the performance of the exporting and non-exporting countries of oil in terms of these particular environmental categories that the pooled regression do not adequately account for. In general, the overall environmental performance is significantly different between the first and second group of countries. This does not mean that their performance is also different in all environmental sub-categories. In fact, the test results show a similarity between all countries in their performance in the Environmental Health policy objective and at the same time a significant difference between the two groups of countries in their performance in the other policy objective, Ecosystem vitality. A similarity is present in all the analyzed variables of the policy categories and their sub-categories that belong to the Environmental Health policy objective, namely the Environmental burden of disease (EHEH), air pollution and water pollution on their effects on humans (EHAIR and EHWATER), child mortality (CHMORT), indoor air pollution (INDOOR), and access to drinking water (WATSUPINV). A significant difference however exists between the performance of the two groups of countries in all the

15 analyzed policy categories of the Ecosystem Vitality policy objective and in almost all their subcategories excluding marine protection (MPAEEZ) and CO2 emissions per GDP (CO2GDP). Difference in environmental performances concerns the following variables: air and water on their effects on ecosystems (EVAIR and EVWATER), biodiversity and habitat (EVBH), agriculture (EVAG), fisheries (EVFISH), climate change (EVCLIMATE), sulfur dioxide per capita and per GDP (SO2CAP and SO2GDP), change in water quantity (WATUSEINV), biome protection (PACOV), pesticide regulation (POPs), coastal shelf fishing pressure (TCEEZ), CO2 emissions per capita and per KWh (CO2CAP and CO2KWH), and renewable electricity (RENEW). Conclusion This paper has attempted to characterize the trends related to environmental performance in the Arab world with an important emphasis on the link to the components of the environmental performance index. Descriptive analysis besides time trend determination and regressions are conducted. The Arab policies are also characterized by the absence of national standards, testing, and certification schemes for the renewable energy based technologies. Moreover, the energy policies do not account for the external cost of fossil fuels caused by environmental degradation as hospitalization costs or loss in fisheries and agriculture. In fact, a study undertaken by the World Bank estimated this kind of losses to account for 4.8% of GDP in Egypt (1999), 3.7% in Morocco (2000), and 3.6% in Algeria (1998) (AFED, 2011).

16 When trying to analyze the links between different components of the environmental performance index and oil consumption and rents, important results are derived. The nonexporting countries (group 1) taken in this analysis are: Jordan, Lebanon, Morocco, Egypt, and Tunisia. The exporting ones (group 2) are: UAE, Algeria, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, Syria, and Yemen. In general, the overall environmental performance is significantly different between the first and second group of countries. This does not mean that their performance is also different in all environmental sub-categories. In fact, the test results show a similarity between all countries in their performance in the Environmental Health policy objective and at the same time a significant difference between the two groups of countries in their performance in the other policy objective, Ecosystem vitality. A similarity is also found in all the analyzed in all variables of the policy categories and their sub-categories that belong to the Environmental Health policy objective, namely the Environmental burden of disease, air pollution and water pollution on their effects on humans, which also includes, child mortality, indoor air pollution, and access to drinking water. A significant difference however exists between the performance of the two groups of countries in all the analyzed policy categories of the Ecosystem Vitality policy objective and in almost all their sub-categories excluding marine protection and CO2 emissions per GDP. Difference in environmental performances concerns the following variables: air and water on their effects on ecosystems, biodiversity and habitat, agriculture, fisheries, climate change, sulfur dioxide per capita and per GDP, change in water quantity, biomass protection, pesticide regulation, coastal shelf fishing pressure, CO2 emissions per capita and per KWh, and renewable electricity.

17 References Abaza, H., Saab, N. and Zeitoun, B. (2011) Report of the Arab Forum for Environment and Development. AFED. Lebanon. 270 pages. Arab Forum for Environment & Development (AFED). (2011). Arab Environment 4. Green Economy; Sustainable Transition in a Changing Arab World Report of the AFED, Beirut. El Alouani, H., & Driouchi, A. (2014). The Oil and Gas Sectors, Renewable Energy, and Environmental Performance in the Arab World. In A. Driouchi (Ed.), Knowledge-Based Economic Policy Development in the Arab World (pp ). Hershey, PA: Business Science Reference. doi: / ch008 Khoday, K. (2011). Arab Development Challenges, Background paper 2011: Sustainable Development & Green Economy in the Arab Region. UNDP. 40 pages. Krishnan, K. and Leed, AP. (2013). Arab World: Towards Green Economy. 17 pages. UN-Escwa. (2012). Monitoring the Transition to the Green Economy in the Arab Region: the SME Perspective. 23 pages. UN-Escwa, Las and Unep. (2011). Reference Paper Green Economy in the Arab Region: Overall Concept and Available Options. 23 pages UNDP. (2013). Green Jobs for Women and Youth: What Can Local Governments Do?. UNDP. April pages. World Bank. (2012a). Toward Green Growth in Mediterranean Countries: Implementing Policies to Enhance the Productivity of Natural Assets. The World Bank, AFD, EIB, Plan Bleu, FEMISE and CMI, Marseilles MED Report. 120 pages. World Bank. (2012b). Inclusive Green Growth: The Pathway to Sustainable development. Washington, DC: World Bank. Yale. (2012). EPI Methodology: Indicators. Yale University, Environmental Performance Index.

18 Appendices APPENDIX I: Time Trends in EPI components per country Qatar Bahrain Variable Cst Coeff R² Variable Cst Coeff R² EPI EPI EH EH EV (-.361) EV EHEH EHEH EHAIR (-.361) EHWATER EHAIR EVAIR EHWATER EVAIR EVWATER EVBH EVWATER EVAG EVFOREST EVBH EVFISH EVAG (-3.511) EVFOREST EVCLIMATE EVFISH CHMORT_pt EVCLIMATE INDOOR_pt CHMORT_pt PM25_pt (-.361) WATSUPINV_pt INDOOR_pt ACSATINV_pt PM25_pt SO2CAP_pt WATSUPINV_pt ACSATINV_pt SO2GDP_pt SO2CAP_pt WATUSEINV_pt SO2GDP_pt PACOV_pt MPAEEZ_pt WATUSEINV_pt AZE_pt PACOV_pt AGSUB_pt POPs_pt MPAEEZ_pt FORGROINV_pt AZE_pt FORLOSS_pt AGSUB_pt FORCOVINV_pt

19 POPs_pt FSOC_pt FORGROINV_pt (-2.941) FORLOSS_pt TCEEZ_pt FORCOVINV_pt (-3.284) CO2CAP_pt FSOC_pt CO2GDP_pt TCEEZ_pt (-6.410) CO2KWH_pt CO2CAP_pt RENEW_pt CO2GDP_pt (-2.313) Oil Cons CO2KWH_pt Oil Prod RENEW_pt (-4.248) Oil Exp Oil Cons Oil Rents Oil Prod Oil Exp Oil Rents (-2.510) Kuwait Mauritania Variable Cst Coeff R² Variable Cst Coeff R² EPI EH EV EHEH EHAIR EHWATER EVAIR EVWATER EPI ( ) EH (-9.718) EV EHEH (-1.100) ( ) EHAIR (-5.196) EHWATER ( ) EVAIR EVWATER (-4.973) EVBH EVAG EVBH EVFOREST EVAG (-2.047) EVFOREST EVFISH EVFISH

20 (-2.337) EVCLIMATE EVCLIMATE CHMORT_pt CHMORT_pt INDOOR_pt (-5.196) INDOOR_pt PM25_pt (-.110) PM25_pt ( ) WATSUPINV_pt WATSUPINV_pt ACSATINV_pt ACSATINV_pt SO2CAP_pt SO2GDP_pt SO2CAP_pt (-4.973) SO2GDP_pt WATUSEINV_pt WATUSEINV_pt PACOV_pt PACOV_pt MPAEEZ_pt MPAEEZ_pt AZE_pt AZE_pt AGSUB_pt AGSUB_pt POPs_pt POPs_pt FORGROINV_pt FORGROINV_pt FORLOSS_pt (-1.992) FORCOVINV_pt FORLOSS_pt FSOC_pt FORCOVINV_pt (-2.001) (-1.223) TCEEZ_pt FSOC_pt (-1.907) (-2.537) CO2CAP_pt TCEEZ_pt CO2GDP_pt CO2CAP_pt CO2KWH_pt CO2GDP_pt (-1.388) CO2KWH_pt RENEW_pt RENEW_pt Oil Cons Oil Cons (-3.194) Oil Prod Oil Prod (-.277) Oil Exp Oil Exp (-.418) Oil Rents Oil Rents Morocco Variable Cst Coeff R² Variable Cst Coeff R² Egypt

21 EPI EPI EH EH EV EV EHEH EHEH EHAIR EHAIR (-2.837) EHWATER EHWATER EVAIR EVAIR EVWATER EVWATER EVBH EVBH EVAG EVAG EVFOREST EVFOREST EVFISH (-6.154) EVFISH (-2.363) EVCLIMATE (-5.779) EVCLIMATE CHMORT_pt CHMORT_pt INDOOR_pt INDOOR_pt (-2.837) PM25_pt PM25_pt WATSUPINV_pt WATSUPINV_pt ACSATINV_pt ACSATINV_pt SO2CAP_pt SO2CAP_pt SO2GDP_pt SO2GDP_pt WATUSEINV_pt WATUSEINV_pt PACOV_pt PACOV_pt MPAEEZ_pt MPAEEZ_pt

22 AZE_pt AZE_pt AGSUB_pt AGSUB_pt POPs_pt POPs_pt FORGROINV_pt FORGROINV_pt FORLOSS_pt (-1.732) FORCOVINV_pt FORLOSS_pt FSOC_pt (-6.269) FORCOVINV_pt TCEEZ_pt FSOC_pt (-2.429) CO2CAP_pt (-9.871) TCEEZ_pt CO2GDP_pt (-1.195) CO2CAP_pt (-4.284) CO2KWH_pt (-3.099) CO2GDP_pt RENEW_pt (-6.843) CO2KWH_pt Oil Cons RENEW_pt Oil Prod (-2.599) Oil Cons Oil Exp (-2.743) Oil Prod Oil Rents Oil Exp Oil Rents E Iraq Jordan Variable Cst Coeff R² Variable Cst Coeff R² EPI EPI (-.793) EH EH (-8.243) EV EV EHEH EHEH EHAIR EHAIR ( ) EHWATER EHWATER

23 EVAIR EVAIR (-.922) EVWATER EVWATER EVBH EVBH EVAG EVAG EVFOREST EVFOREST EVFISH EVFISH EVCLIMATE EVCLIMATE CHMORT_pt CHMORT_pt INDOOR_pt INDOOR_pt (-7.398) PM25_pt PM25_pt (-6.468) WATSUPINV_pt WATSUPINV_pt (-6.158) ACSATINV_pt ACSATINV_pt SO2CAP_pt SO2CAP_pt SO2GDP_pt WATUSEINV_pt SO2GDP_pt (-1.547) PACOV_pt WATUSEINV_pt PACOV_pt MPAEEZ_pt MPAEEZ_pt AZE_pt AZE_pt AGSUB_pt AGSUB_pt POPs_pt POPs_pt FORGROINV_pt FORGROINV_pt FORLOSS_pt FORLOSS_pt FORCOVINV_pt FORCOVINV_pt FSOC_pt FSOC_pt TCEEZ_pt TCEEZ_pt CO2CAP_pt (-3.119) CO2CAP_pt CO2GDP_pt CO2GDP_pt CO2KWH_pt CO2KWH_pt RENEW_pt RENEW_pt

24 (-3.170) Oil Cons Oil Cons (-.827) Oil Prod Oil Prod (-2.714) Oil Exp Oil Exp (-.036) E-05 Oil Rents Oil Rents (-.322) Lebanon Libya Variable Cst Coeff R² Variable Cst Coeff R² EPI EPI EH EH EV EV (-.164) EHEH EHEH EHAIR EHAIR EHWATER EHWATER EVAIR EVAIR EVWATER EVBH EVWATER EVAG EVBH EVAG EVFOREST EVFOREST EVFISH EVFISH (-3.983) EVCLIMATE EVCLIMATE CHMORT_pt CHMORT_pt INDOOR_pt INDOOR_pt PM25_pt WATSUPINV_pt PM25_pt ACSATINV_pt WATSUPINV_pt ACSATINV_pt SO2CAP_pt SO2CAP_pt SO2GDP_pt

25 SO2GDP_pt WATUSEINV_pt PACOV_pt WATUSEINV_pt MPAEEZ_pt PACOV_pt AZE_pt MPAEEZ_pt AGSUB_pt AZE_pt POPs_pt AGSUB_pt POPs_pt FORGROINV_pt FORGROINV_pt FORLOSS_pt FORLOSS_pt FORCOVINV_pt FORCOVINV_pt FSOC_pt FSOC_pt (-3.575) TCEEZ_pt TCEEZ_pt (-7.412) CO2CAP_pt (-.506) CO2CAP_pt (-.126) CO2GDP_pt CO2GDP_pt CO2KWH_pt RENEW_pt CO2KWH_pt Oil Cons RENEW_pt (-.717) Oil Prod Oil Cons (-6.864) Oil Exp Oil Prod Oil Exp Oil Rents Oil Rents Saudi Arabia Oman Variable Cst Coeff R² Variable Cst Coeff R² EPI EPI ( ) EH EH EV EV ( ) (-6.783) EHEH EHEH EHAIR EHAIR (-5.489) (-8.671) EHWATER EHWATER

26 EVAIR EVAIR EVWATER EVBH EVWATER EVAG EVBH EVFOREST EVAG (-3.602) EVFOREST EVFISH EVFISH (-5.267) EVCLIMATE EVCLIMATE ( ) ( ) CHMORT_pt CHMORT_pt INDOOR_pt INDOOR_pt PM25_pt PM25_pt (-5.489) (-8.671) WATSUPINV_pt WATSUPINV_pt ACSATINV_pt ACSATINV_pt SO2CAP_pt SO2CAP_pt (-.322) SO2GDP_pt SO2GDP_pt WATUSEINV_pt PACOV_pt WATUSEINV_pt MPAEEZ_pt PACOV_pt AZE_pt MPAEEZ_pt AGSUB_pt AZE_pt POPs_pt AGSUB_pt FORGROINV_pt POPs_pt (-3.602) FORGROINV_pt FORLOSS_pt FORLOSS_pt FORCOVINV_pt FORCOVINV_pt FSOC_pt FSOC_pt (-4.827) TCEEZ_pt TCEEZ_pt (-5.711) (-1.351) CO2CAP_pt CO2CAP_pt ( ) ( ) CO2GDP_pt CO2GDP_pt (-7.158) (-5.487) CO2KWH_pt CO2KWH_pt (-.799) (-3.074) RENEW_pt RENEW_pt Oil Cons Oil Cons

27 Oil Prod Oil Exp Oil Rents Oil Prod (-2.115) Oil Exp ( Oil Rents Yemen UAE Variable Cst Coeff R² Variable Cst Coeff R² EPI EPI EH EH EV EV EHEH EHEH EHAIR EHAIR (-7.679) EHWATER EHWATER EVAIR EVAIR EVWATER 0.83 EVWATER EVBH EVBH EVAG EVAG EVFOREST EVFOREST EVFISH EVFISH (-2.598) (-3.548) EVCLIMATE EVCLIMATE (-3.951) CHMORT_pt CHMORT_pt INDOOR_pt INDOOR_pt PM25_pt (-7.679) PM25_pt (-.610) WATSUPINV_pt ACSATINV_pt WATSUPINV_pt ( ) SO2CAP_pt ACSATINV_pt

28 SO2GDP_pt SO2CAP_pt WATUSEINV_pt SO2GDP_pt PACOV_pt WATUSEINV_pt MPAEEZ_pt PACOV_pt MPAEEZ_pt AZE_pt AZE_pt AGSUB_pt AGSUB_pt POPs_pt POPs_pt FORGROINV_pt FORGROINV_pt FORLOSS_pt FORLOSS_pt FORCOVINV_pt FORCOVINV_pt FSOC_pt (-3.770) FSOC_pt (-1.850) TCEEZ_pt (-1.610) TCEEZ_pt (-4.664) CO2CAP_pt CO2CAP_pt CO2GDP_pt CO2GDP_pt (-7.394) CO2KWH_pt CO2KWH_pt (-.566) RENEW_pt RENEW_pt Oil Cons Oil Cons Oil Prod Oil Prod ( ) Oil Exp Oil Exp (-8.639) Oil Rents Oil Rents (-1.831) Algeria Variable Cst Coeff R² Variable Cst Coeff R² EPI SO2GDP_pt EH WATUSEINV_pt PACOV_pt 37.1

29 EV MPAEEZ_pt (-2.413) AZE_pt -- EHEH AGSUB_pt POPs_pt 54.5 EHAIR FORGROINV_pt (-3.462) FORLOSS_pt EHWATER (-1.010) FORCOVINV_pt EVAIR FSOC_pt EVWATER (-5.511) EVBH TCEEZ_pt EVAG (-.386) EVFOREST CO2CAP_pt (-2.631) ( ) EVFISH CO2GDP_pt (-4.998) (-2.955) EVCLIMATE CO2KWH_pt ( ) CHMORT_pt RENEW_pt INDOOR_pt Oil Cons PM25_pt Oil Prod WATSUPINV_pt ( ) Oil Exp ACSATINV_pt Oil Rents SO2CAP_pt

30 Appendix II: Regression Results for all, oil exporting and non oil exporting countries All countries Variable Constant Coef of oil consumption (cos) Coef of oil rents R² EPI EH EV EHEH EHAIR EHWATER EVAIR EVWATER EVBH EVAG EVFISH EVCLIMATE CHMORT INDOOR WATSUPINV SO2CAP SO2GDP WATUSEINV ( ) (-2.070) ( ) (-.172) (-3.662) (-2.719) (-1.671) (-3.174) (-2.657) (-4.719) (-7.081) (-2.886) (-.874) (-2.410) (-2.410) (-.172) (-1.482) (-4.311) (-2.255) (-2.803) (-.375) (-2.487) (-2.657) PACOV

31 MPAEEZ POPs TCEEZ CO2CAP CO2GDP CO2KWH RENEW (-3.030) ( ) (-6.566) (-2.339) (-2.757) (-3.947) (-1.129) (-7.695) (-3.787) (-1.012) (-1.358) Group 1: oil non-exporting countries Group2: oil exporting countries Variable Cst Coef cos Coef rent R² Variable Cst Coef cos Coef rent R² EPI EH EV EHEH EHAIR EHWATER EVAIR EVWATER EVBH EVAG EVFISH EPI ( ) EH (-.559) (-1.096) EV ( ) EHEH (-1.132) EHAIR (-3.149) (-2.179) EHWATER (-.239) (-1.806) EVAIR (-2.220) (-4.918) EVWATER (-.290) (-2.355) (-2.226) EVBH (-7.649) EVAG (-.721) (-3.671) EVFISH (-1.272) (-3.129) (-2.599) EVCLIMATE EVCLIMATE

32 CHMORT INDOOR WATSUPINV SO2CAP SO2GDP WATUSEINV PACOV MPAEEZ POPs TCEEZ CO2CAP CO2GDP CO2KWH RENEW (-2.752) (-2.139) CHMORT (-1.132) INDOOR (-.974) (-.842) WATSUPINV (-2.407) SO2CAP (-1.533) (-2.642) (-2.390) SO2GDP (-.751) (-6.587) WATUSEINV (-.290) (-2.355) (-2.226) PACOV (-6.471) MPAEEZ ( ) POPs (-7.932) (-4.008) TCEEZ (-3.199) (-2.355) CO2CAP (-3.101) (-.320) CO2GDP (-1.763) (-1.183) (-4.756) CO2KWH (-1.401) (-.168) (-3.787) RENEW (-2.626) (-1.578) (-1.366)

33 Appendix III: Chow-Test for Comparisons between non oil and oil exporting countries SSR k N S1+S2 Sc-(S1+S2) N1+N2-2k Den Num F EPI EH EV EHEH EHAIR EHWATER EVAIR EVWATER EVBH EVAG EVFISH EVCLIMATE CHMORT Comb (**) Group Group Comb Group Group Comb (**) Group Group Comb Group Group Comb Group Group Comb Group Group Comb (**) Group Group Comb (**) Group Group Comb (**) Group Group Comb (**) Group Group Comb (**) Group Group Comb (**) Group Group Comb Group