The Asymmetric Effect of Uncertainty on Environmental Degradation: A Study of the Interactive Role of Globalization and Energy Consumption

ABSTRACT The degradation of the environment in the MENA region through the influence of fossil fuel reliance and instability of the policy implies the necessity to investigate the influence of economic policy uncertainty (EPU) in carbon emissions. Since there is only little and non‐asymmetric evidence on the MENA countries, the study uses a panel NARDL model to test 12 countries (1995–2022) to determine the asymmetric impact of EPU whilst including globalization and energy consumption. The outcomes indicate that positive (0.89%), as well as negative (0.85%) shocks in EPU have a positive long‐term impact on CO 2 emissions. Globalization decreases emissions (0.23%) and aggravates the negative impact of EPU (0.21%), but the impact of energy consumption is majorly positive (0.88%). In the findings, the author highlights that to realize sustainable development in MENA, constant policies, the promotion of renewable energy, and organized regional approaches are necessary.