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Impact of Oil Price, Economic Growth and Urbanization on CO 2 Emissions in GCC Countries: Asymmetry Analysis

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  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz University, Al-Kharj 11942, Saudi Arabia)

  • Alam Asadov

    (Department of Finance, College of Business Administration, Prince Sultan University, Rafha Street, Riyadh 11586, Saudi Arabia)

  • Muhammad Tanveer

    (Prince Sultan University, Rafha Street, Riyadh 11586, Saudi Arabia)

  • Maham Furqan

    (School of Public Policy, Oregon State University, Corvallis, OR 97331, USA)

  • Zhang Yu

    (School of Economics and Management, Chang’an University, Xi’an 710064, China
    Department of Business Administration, ILMA University, Karachi 75190, Pakistan)

Abstract

Oil prices and rapidly increasing urbanization could have a long-lasting impact on the environment in oil-abundant Gulf Cooperation Council (GCC) countries. Therefore, the environmental role of oil price, economic growth, and urbanization on CO 2 emissions should be tested. The present study investigates the impact of oil price, economic growth, and urbanization on CO 2 emissions in those countries, considering asymmetrical relationships. For this purpose, a nonlinear autoregressive distributive lag cointegration approach is applied in GCC countries during the 1980–2019 period, and cointegration is corroborated in all investigated models. Long-run results show that rising economic growth positively affects CO 2 emissions in Kuwait, Oman, Qatar, and Saudi Arabia. Decreasing economic growth positively affects CO 2 emissions in Bahrain, Kuwait, Qatar, and the United Arab Emirates (UAE). Moreover, the rising oil price has a positive impact on CO 2 emissions and shows a scale effect in Oman, Qatar, and Saudi Arabia. Moreover, it has a negative effect and corroborates technique and composition effects in Kuwait and the UAE. Further, decreasing oil prices has a positive impact on CO 2 emissions in Bahrain and has a negative effect in Kuwait and the UAE. Lastly, urbanization positively affects CO 2 emissions in Bahrain, Oman, Qatar, and the UAE. Economic growth is found asymmetrical in all GCC countries, and the asymmetrical effect of oil price is also observed in all GCC countries except the UAE.

Suggested Citation

  • Haider Mahmood & Alam Asadov & Muhammad Tanveer & Maham Furqan & Zhang Yu, 2022. "Impact of Oil Price, Economic Growth and Urbanization on CO 2 Emissions in GCC Countries: Asymmetry Analysis," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:8:p:4562-:d:791531
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