Accounting for carbon dioxide emission effect of energy use, economic growth, and urbanization in the OPEC member states

Abstract

AbstractWhile extant studies have largely associated environmental degradation with energy sources and energy consumption, the procedure of oil exploration has not been excluded in the discus of environmental sustainability. On this note, the current study examined the effect of per capita energy consumption and urban population for the 14 Organization for Petroleum Exporting Countries (OPEC) members from 1980 to 2017. In addition, the validity of Environmental Kuznets curve (EKC) hypothesis is investigated by using the State‐of‐the‐art second‐generation panel data techniques. The main finding reveals that at an early stage, economic growth endangers the environment by release of pollutant emissions. However, sustained economic growth ameliorates environmental problems. Therefore, study validates the EKC hypothesis for the case of OPEC. Additionally, both energy use per person and urban population adversely affects environmental sustainability. Besides, the findings infer that economic growth brings about an increase in energy consumption and not the other way round. Thus, energy conservation policies aimed at rationing energy consumption and controlling carbon dioxide emissions would hurt economic growth.