Abstract
Achieving environmental sustainability whilst minimizing the climate change effect has become a global endeavor. Hence, this study examined the effect of energy consumption, economic growth, financial development, and globalization on CO2 emissions in the Gulf Cooperation Council (GCC) countries. The research utilized a dataset stretching from 1995 to 2018. In a bid to investigate these associations, the study applied cross-sectional dependence (CSD), slope heterogeneity (SH), Pesaran unit root, Westerlund cointegration, cross-sectionally augmented autoregressive distributed lag (CS-ARDL), and Dumitrescu and Hurlin (DH) causality approaches. The outcomes of the CSD and SH tests indicated that using the first-generation techniques produces misleading results. The panel unit root analysis unveiled that the series are I (1). Furthermore, the outcomes of the cointegration test revealed a long-run association between CO2 emissions and the regressors, suggesting evidence of cointegration. The findings of the CS-ARDL showed that economic growth and energy consumption decrease environmental sustainability, while globalization improves it. The study also validated the environmental Kuznets curve (EKC) hypothesis for GCC economies. In addition, the results of the DH causality test demonstrated a feedback causality association between economic growth and CO2 emissions and between financial development and CO2 emissions. Moreover, there is a one-way causality from energy consumption and globalization to CO2 emissions in GCC economies. According to the findings, environmental pollution in GCC countries is output-driven, which means that it is determined by the amount of energy generated and consumed.
Highlights
Substantial economic expansion and industrialization have resulted in rising energy consumption and environmental deterioration, posing challenges to sustainable development [1]
Energy is a requirement for economic growth as well as the primary cause of environmental deterioration, and climate change is connected to the utilization of energy and greenhouse gases (GHGs) emissions [3]
Revealed thatthat economic growth causes ananupsurge degradation of the environment in Gulf Cooperation Council (GCC) economies. This means that GCC nations are majorly pro-growth economies
Summary
Substantial economic expansion and industrialization have resulted in rising energy consumption and environmental deterioration, posing challenges to sustainable development [1]. In 2019, global primary energy consumption grew by 1.3% [2]. Energy is a requirement for economic growth as well as the primary cause of environmental deterioration, and climate change is connected to the utilization of energy and greenhouse gases (GHGs) emissions [3]. Understanding the reasons for rising CO2 emissions and developing suitable mitigation plans is vital for all governments and is important for the Gulf Cooperation Council (GCC) nations due to their unique features. The six Gulf countries of GCC (Kuwait, Oman, Bahrain, United Arab Emirates (UAE), Qatar, and Saudi Arabia) are rich in resources and control 19.8% of global natural-gas holdings [2]. Saudi Arabia, UAE, and Qatar are amongst the globe’s leading emitters [5]
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