Economic-Environmental Consequences of Reforming Fossil Fuel Subsidies Using RICE Model in the MENA Region Countries by 2100 Horizon

The Earth s temperature has climbed by 0.7 degrees Celsius (°C) during the last 100 years, and the worldwide average temperature is expected to rise between 1.8 and 6.4 degrees °C by 2100. Climate change, particularly rising temperatures, according to IPCC, the Middle East and North Africa (MENA) area will face challenges throughout the twenty-first century. As a result, the study s aims are to evaluate the impact of policies which eliminate or targetize fossil fuel subsidies in order to reduce global warming, as well as the impact of these policies on economic variables (GDP, consumption, capital accumulation, employment, and environmental impact) in the MENA until 2100. For this purpose, a Dynamic Regional Integrated Climate-Economy Model (RICE) is utilized to do this. The findings suggest that in the long run, if no strategy to limit temperature rise is enacted and carbon subsidies persist, the average world temperature would rise by 4.74 degrees °C, while an optimal policy based on fossil fuel taxation will increase the average global temperature by 4.49 °C, and a policy reforming fossil fuel subsidies will increase the average global temperature by 4.24 °C. Generally, carbon tax measures in the MENA area will lower average world temperature increase by 0.5°C compared to other scenarios.