Appraising the role of energy subsidy on the environmental sustainability in Arab Nations - is it compatible or confronting?

The current study assesses the influence of energy subsidies as an independent variable, as well as, economic progress, energy usage, and trade openness as control variables on carbon dioxide emissions in Arab countries which are considered both top energy subsidy providers and carbon dioxide (CO2) emitters, called the United Arab Emirates, Saudi Arabia, Qatar, Libya, Kuwait, Iraq, Egypt, Bahrain and Algeria from 2010 to 2019 using pooled ordinary least squares (OLS), fixed effects, and random effects approaches. The findings signify that energy subsides, economic progress, and energy usage are all significantly and positively connected with environmental deterioration except trade openness has a negative influence. The pairwise panel causality results indicate that both carbon dioxide and economic progress cause trade openness. It may put pressure on policymakers to expedite the transition to low-carbon energy subsidies, implement carbon taxes on consumer goods that use fossil fuels in the manufacturing process, and promote energy efficiency.