Energy Consumption, Economic Growth, and Climate Change Nexus in Jordan: Insights from the Toda Yamamoto Causality Test

Jordan faces significant challenges related to energy security due to its limited natural resources and reliance on energy imports, which meet over 90% of its energy needs. The adoption of renewable energy (RE) technologies is viewed as a crucial step in reducing dependence on fossil fuels, enhancing energy security, and addressing environmental concerns such as CO2 emissions. Jordan has set ambitious goals to reduce greenhouse gas emissions by 30% by 2030 through RE and energy efficiency initiatives, in line with the global push to combat climate change. Using the Toda-Yamamoto causality test, this study examines the relationship between economic growth, energy consumption, and greenhouse gas emissions in Jordan from 1980 to 2021. The results indicate a bidirectional causality between energy consumption and economic growth, highlighting the energy-dependent nature of Jordan’s economy. Additionally, greenhouse gas emissions were found to cause economic growth, reflecting the role of emissions-intensive industries in the country’s development. The study also shows that economic growth and greenhouse gas emissions jointly influence energy consumption, while energy consumption does not directly drive emissions. These findings emphasize the need for Jordan to adapt and accelerate its energy transition. By investing in renewable energy and improving energy efficiency, Jordan can reduce its contributions to climate change while enhancing energy security and fostering sustainable economic growth.