Environmental Degradation in Gulf Cooperation Council: Role of ICT Development, Trade, FDI, and Energy Use

Samira Youssef Brahmia and Sonia Mannai ()
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Samira Youssef Brahmia: Department of Finance and Investment, Faculty of Business Administration, University of Tabuk, Tabuk 71491, Saudi Arabia
Sonia Mannai: Department of Finance and Investment, Faculty of Business Administration, University of Tabuk, Tabuk 71491, Saudi Arabia

Sustainability, 2024, vol. 17, issue 1, 1-23

Abstract: Environmental degradation is a pressing issue, particularly in resource-dependent regions like the Gulf Cooperation Council (GCC) countries. While significant research has explored the environmental impacts of economic growth and resource use globally, limited attention has been given to the unique dynamics in the GCC, including the role of ICT development, trade openness, and FDI inflows. This research examines how information and communication technology (ICT) development, economic growth, trade openness, foreign direct investment (FDI) inflows, and electricity consumption influenced environmental degradation in GCC countries from 1990 to 2022. Using panel data analysis, the study finds that ICT expansion and increased electricity consumption significantly contribute to higher CO 2 emissions, exacerbating environmental degradation. Economic growth follows the Environmental Kuznets Curve (EKC) pattern, where environmental harm initially increases with growth but can decline as economies diversify and adopt cleaner technologies. Trade openness and FDI inflows, particularly in resource-intensive industries, also contribute to environmental degradation, supporting the pollution haven hypothesis. However, these factors present opportunities for sustainable development if paired with stricter environmental regulations and cleaner technology adoption. The study highlights the need for GCC policymakers to prioritize renewable energy investments, enforce stronger environmental policies, and promote energy efficiency to balance economic growth with environmental sustainability. Recommendations for future research include exploring other environmental factors and assessing the role of technological innovations in reducing emissions.

Keywords: ICT development; economic growth; trade openness; FDI inflows; electricity consumption; environmental degradation; GCC countries; CO 2 emissions; Environmental Kuznets Curve (EKC); renewable energy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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