Abstract:

Transitioning toward cleaner and more energy-efficient sources is vital in mitigating greenhouse gas emissions. This study explores the influence of energy efficiency (EE), financial development (FD), and several macroeconomic factors on carbon dioxide (CO₂) emissions in four North African nations (Algeria, Egypt, Morocco, and Tunisia) over the period 1990–2023. Using advanced panel econometric techniques and quantile regression models, the analysis reveals that the impact of these variables on CO₂ emissions varies across emission levels. Notably, EE consistently reduces CO₂ emissions across all quantiles, with the most substantial effect observed at the 90th percentile. FD also contributes significantly to emission reductions, particularly in high-emission contexts. Conversely, GDP growth is linked to increased CO₂ emissions across all quantiles. The influence of urbanization (URB) weakens at higher emission levels, although a positive and significant relationship is maintained overall. While the effect of industrialization (IND) is less prominent at the upper quantiles, it nonetheless contributes positively to emissions. Overall, the findings highlight the essential roles of energy efficiency and financial development in reducing emissions and offer critical insights for shaping sustainable energy and financial policies in the North African region.

Keywords:

Energy efficiency, financial development, carbon dioxide emissions, quantile regression, north africa, sustainable development.

How to Cite:

Besma Talbi and Lamia Arfaoui. Towards a Low-Carbon Future: The Role of Financial Development in North Africa. [ref]: vol.23.2025. available at: https://refpress.org/ref-vol23-a19