Impact of Financial Deepening, Energy Consumption and Total Natural Resource Rent on CO2 Emission in the GCC Countries: Evidence from Advanced Panel Data Simulation

Najia Saqib, Ivan A. Duran and Nazia Hashmi
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Najia Saqib: Department of Finance, College of Business, Prince Sultan University, Riyadh, Saudi Arabia.
Ivan A. Duran: Department of Finance, College of Business, Prince Sultan University, Riyadh, Saudi Arabia.
Nazia Hashmi: Department of Finance, College of Business, Prince Sultan University, Riyadh, Saudi Arabia.

International Journal of Energy Economics and Policy, 2022, vol. 12, issue 2, 400-409

Abstract: The study examined the dynamic nexus between financial deepening, natural resource rent, nonrenewable-energy and renewable-energy consumption and CO2 emission by using a dataset of six GCC countries (UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain) from 1993 to 2019. For estimation, study applying second-generation panel unit root, cointegration and long-run estimation tests for robust and efficient results. The study confirms the presence of cross-sectional dependency while economic expansion and nonrenewable-energy contribute to CO2 emissions, financial deepening and renewable-energy consumption have a significant impact on reducing environmental degradation. Furthermore, the Dumitrescu-Hurlin causality test reveals a statistically significant bidirectional correlation between financial deepening, consumption of nonrenewable-energy and renewable-energy and CO2 emission. In light of these findings, a number of policy recommendations are provided to help the GCC countries overcome on CO2 emissions while promoting economic growth.

Keywords: CO2 emission; financial deepening; natural resource rent; renewable-energy consumption; nonrenewable-energy consumption (search for similar items in EconPapers)
JEL-codes: C12 C23 N50 O10 Q47 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2022-02-45

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