Determinants of a Green Economy from the Perspective of Energy Sources in the GCC: The Role of Natural Gas Production

Talal H. Alsabhan, Shaima Alghannam, Hamed M. Alhoshan and Reem Alshagri ()
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Talal H. Alsabhan: Department of Economics, King Saud University, Riyadh 11451, Saudi Arabia
Shaima Alghannam: Department of Economics, King Saud University, Riyadh 11451, Saudi Arabia
Hamed M. Alhoshan: Department of Economics, King Saud University, Riyadh 11451, Saudi Arabia
Reem Alshagri: Department of Economics, King Saud University, Riyadh 11451, Saudi Arabia

Energies, 2025, vol. 18, issue 22, 1-14

Abstract: Investigating the key factors that contribute to the development of a green economy is essential for governments and policymakers as they decide where to allocate their investments. However, the determinants of a green economy, particularly regarding different energy sources, remain an under-researched area, especially in the context of GCC (Gulf Cooperation Council) economies. This study aims to explore the roles of natural gas production, crude oil production, and electricity production from renewable energy sources in the transition towards green economic transformation. For our estimation, we employed panel data techniques, utilizing data from all six GCC economies covering the period from 2010 to 2023. Our results indicate that both the use of renewable energy sources and natural gas production have significantly contributed to advancing green economic transformation in these economies. In contrast, crude oil production has been found to be an irrelevant factor in explaining the transition to green growth in the GCC. The causality analysis revealed that there is a one-way causal relationship between natural gas production and green economic transformation and a two-way causal relationship between electricity generation from renewable sources and green economic transformation in GCC economies. Based on the study’s findings, we recommend that policymakers in GCC economies embrace green economic transformation by increasing the use of renewable sources and natural gas in production. Green economic transformation would help GCC economies pursue advanced, sustainable economic performance.

Keywords: green economy; natural gas production; GCC economies; panel data (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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