<p>This paper explores the pathways to low-carbon development in nine MENA countries (2000–2019) through a spatial econometric framework that integrates both mediation and moderation analysis. A Spatial Durbin Model (SDM) is employed to investigate the interplay between economic growth, eco-innovation, and foreign direct investment (FDI) within and across borders, thereby capturing the networked spillovers of environmental and economic dynamics. The results reveal an N-shaped Environmental Kuznets Curve, confirming that growth in the region remains carbon-intensive but may eventually support mitigation at higher income levels. Eco-innovation acts as a mediator, significantly reducing emissions by fostering cleaner technologies and production systems. FDI plays a dual moderating role, both weakening the growth–emissions relationship and amplifying the effectiveness of eco-innovation, supporting the “pollution halo” hypothesis. Importantly, significant spatial spillovers are detected, indicating that policies in one country have an impact on environmental outcomes in neighboring economies. These findings underscore the value of a network perspective in analyzing sustainability transitions, where interdependencies and diffusion processes shape both challenges and opportunities. By combining spatial econometrics with causal pathway analysis, the study makes a methodological contribution to the literature. It offers practical insights for aligning innovation, investment, and growth strategies with regional low-carbon objectives.</p>