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

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Najia Saqib & Ivan A. Duran & Nazia Hashmi, 2022. "Impact of Financial Deepening, Energy Consumption and Total Natural Resource Rent on CO2 Emission in the GCC Countries: Evidence from Advanced Panel Data Simulation," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 400-409, March.
    • Handle: RePEc:eco:journ2:2022-02-45
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    More about this item

    Keywords

    CO2 emission; financial deepening; natural resource rent; renewable-energy consumption; nonrenewable-energy consumption;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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