Oman’s Green Horizon: Steering Towards Sustainability Through Decarbonization and Energy Transition

Sufian Eltayeb Mohamed Abdel-Gadir () and Mwahib Gasmelsied Ahmed Mohammed
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Sufian Eltayeb Mohamed Abdel-Gadir: Department of Public Law, College of Law, Sultan Qaboos University, P.O. Box 50, Muscat 123, Oman
Mwahib Gasmelsied Ahmed Mohammed: Finance and Investment Department, Faculty of Business Administration, University of Tabuk, Tabuk 71491, Saudi Arabia

Sustainability, 2024, vol. 16, issue 21, 1-21

Abstract: This paper examines the determinants of CO 2 emissions in Oman from 1990 to 2024, focusing on the impacts of energy consumption, economic growth, urbanization, financial development, and foreign direct investment. The analysis utilizes stepwise regression to systematically identify the most significant predictors, ensuring a parsimonious model. Robust least squares (ROLSs) are employed to account for potential outliers and heteroscedasticity in the data, providing more reliable estimates. Fully Modified Least Squares (FMOLSs) is applied to address issues of endogeneity and serial correlation, offering robust long-term coefficient estimates. Canonical cointegrating regression (CCR) further refines these estimates by handling non-stationary variables and ensuring consistency in the presence of cointegration. Cointegration tests, including the Johansen and Engle–Granger methods, confirm long-term equilibrium relationships among the variables; this study reveals several key findings. Energy use per capita (ENGY) and real GDP per capita (RGDP C ) are consistently significant positive predictors of CO 2 emissions. Urbanization (URB) also significantly contributes to higher emissions. Conversely, the Financial Development Index (FDX) and foreign direct investment (FDI) do not show significant effects on CO 2 levels. The high R-squared values across models indicate that these variables explain a substantial portion of the variation in emissions. Cointegration tests confirm long-term equilibrium relationships among the variables, with the Johansen test identifying two cointegrating equations and the Engle–Granger test showing significant tau-statistics for FDX, ENGY, and URB. The VEC model further highlights the short-term dynamics and adjustment mechanisms. These findings underscore the importance of energy policy, economic development, and urban planning in Oman’s efforts towards sustainable development and decarbonization.

Keywords: carbon emissions; renewable energy; economic growth; urbanization; cointegration (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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