IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i15p6746-d1709120.html

Institutional Quality, Energy Efficiency, and Natural Gas: Explaining CO 2 Emissions in the GCC, 2000–2023

Author

Listed:
  • Nagwa Amin Abdelkawy

    (Economics Department, College of Business Administration, King Faisal University, Al Hofuf 31982, Saudi Arabia)

  • Luluh Alzuwaidi

    (College of Business Administration, King Faisal University, Al Hofuf 31982, Saudi Arabia)

Abstract

This study investigates whether institutional quality amplifies the emissions-reducing effect of energy efficiency in hydrocarbon-dependent economies. Addressing a gap in the energy–environment literature, it tests how governance conditions shape the effectiveness of technical mitigation strategies. Using panel data from six Gulf Cooperation Council (GCC) countries between 2000 and 2023, we estimate a fixed-effects model with interaction terms between energy intensity (as a proxy for efficiency) and institutional quality (proxied by Control of Corruption). The results show that energy efficiency is associated with lower CO 2 emissions, and this relationship is significantly moderated by institutional quality. We also analyze the emissions impact of natural gas consumption and identify a structural shift following the 2014 energy reforms: while gas use was positively associated with emissions before 2014, the post-reform period shows a weaker or reversed effect. Robustness checks using alternative governance indicators—Regulatory Quality and Government Effectiveness—confirm the moderating role of institutions. The study offers new empirical evidence on the energy–institution–environment nexus and introduces a novel interaction-based methodology suited to resource-rich economies undergoing institutional transition.

Suggested Citation

  • Nagwa Amin Abdelkawy & Luluh Alzuwaidi, 2025. "Institutional Quality, Energy Efficiency, and Natural Gas: Explaining CO 2 Emissions in the GCC, 2000–2023," Sustainability, MDPI, vol. 17(15), pages 1-26, July.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:15:p:6746-:d:1709120
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/15/6746/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/15/6746/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shahbaz, Muhammad & Khan, Saleheen & Tahir, Mohammad Iqbal, 2013. "The dynamic links between energy consumption, economic growth, financial development and trade in China: Fresh evidence from multivariate framework analysis," Energy Economics, Elsevier, vol. 40(C), pages 8-21.
    2. Abdulrahman A. Albahouth & Muhammad Tahir, 2025. "Institutional Quality and Climate Vulnerability: Empirical Evidence from GCC Economies," Sustainability, MDPI, vol. 17(5), pages 1-19, February.
    3. Yousaf Raza, Muhammad & Lin, Boqiang, 2022. "Natural gas consumption, energy efficiency and low carbon transition in Pakistan," Energy, Elsevier, vol. 240(C).
    4. Xue, Chaokai & Shahbaz, Muhammad & Ahmed, Zahoor & Ahmad, Mahmood & Sinha, Avik, 2022. "Clean energy consumption, economic growth, and environmental sustainability: What is the role of economic policy uncertainty?," Renewable Energy, Elsevier, vol. 184(C), pages 899-907.
    5. Steven Sorrell, 2010. "Energy, Economic Growth and Environmental Sustainability: Five Propositions," Sustainability, MDPI, vol. 2(6), pages 1-26, June.
    6. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 353-377.
    7. Seyi Saint Akadiri & Festus Victor Bekun & Elham Taheri & Ada Chigozie Akadiri, 2019. "Carbon emissions, energy consumption and economic growth: a causality evidence," International Journal of Energy Technology and Policy, Inderscience Enterprises Ltd, vol. 15(2/3), pages 320-336.
    8. Zhang, Chuanguo & Lin, Yan, 2012. "Panel estimation for urbanization, energy consumption and CO2 emissions: A regional analysis in China," Energy Policy, Elsevier, vol. 49(C), pages 488-498.
    9. Ming Yang & Xin Yu, 2017. "Energy efficiency to mitigate carbon emissions: strategies of China and the USA," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(1), pages 1-14, January.
    10. Jihen Bousrih & Manal Elhaj, 2025. "Energy Transition in the GCC: From Oil Giants to Green Leaders?," Energies, MDPI, vol. 18(13), pages 1-22, July.
    11. Madhu Khanna & David Zilberman, 2017. "Bioenergy Economics and Policy in US and Brazil: Effects on Land Use and Greenhouse Gas Emissions," Natural Resource Management and Policy, in: Madhu Khanna & David Zilberman (ed.), Handbook of Bioenergy Economics and Policy: Volume II, pages 1-11, Springer.
    12. Salahuddin, Mohammad & Gow, Jeff, 2014. "Economic growth, energy consumption and CO2 emissions in Gulf Cooperation Council countries," Energy, Elsevier, vol. 73(C), pages 44-58.
    13. Wei Li & Zhijie Jia, 2017. "Carbon tax, emission trading, or the mixed policy: which is the most effective strategy for climate change mitigation in China?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(6), pages 973-992, August.
    14. Brown, Marilyn A. & Kim, Gyungwon & Smith, Alexander M. & Southworth, Katie, 2017. "Exploring the impact of energy efficiency as a carbon mitigation strategy in the U.S," Energy Policy, Elsevier, vol. 109(C), pages 249-259.
    15. Acheampong, Alex O., 2018. "Economic growth, CO2 emissions and energy consumption: What causes what and where?," Energy Economics, Elsevier, vol. 74(C), pages 677-692.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Łukasz Nazarko & Eigirdas Žemaitis & Łukasz Krzysztof Wróblewski & Karel Šuhajda & Magdalena Zajączkowska, 2022. "The Impact of Energy Development of the European Union Euro Area Countries on CO 2 Emissions Level," Energies, MDPI, vol. 15(4), pages 1-12, February.
    2. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
    3. Demet Beton Kalmaz & Tomiwa Sunday Adebayo, 2025. "Evaluating the waste management greenhouse gas emissions effects of domestic material biomass and raw material productivity consumption in Denmark," Energy & Environment, , vol. 36(8), pages 4008-4025, December.
    4. Yugang He, 2022. "Investigating the Routes toward Environmental Sustainability: Fresh Insights from Korea," Sustainability, MDPI, vol. 15(1), pages 1-17, December.
    5. Zuyao Wang & Runguo Xu, 2024. "Nexus of Natural Resources, Renewable Energy, Capital Formation, Urbanization, and Foreign Investment in E7 Countries," Sustainability, MDPI, vol. 16(24), pages 1-22, December.
    6. Arash Refah-Kahriz & Hassan Heidari & Mahdiyeh Rahimdel, 2023. "Is there a similar Granger causality among CO2 emissions, energy consumption and economic growth in different regimes in Iran?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(4), pages 3801-3822, April.
    7. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
    8. Vu Linh Toan Le & Khanh Duy Pham, 2024. "The Impact of Financial Inclusion and Digitalization on CO 2 Emissions: A Cross-Country Empirical Analysis," Sustainability, MDPI, vol. 16(23), pages 1-27, November.
    9. Hussain, Jamal & Khan, Anwar & Zhou, Kui, 2020. "The impact of natural resource depletion on energy use and CO2 emission in Belt & Road Initiative countries: A cross-country analysis," Energy, Elsevier, vol. 199(C).
    10. Li, Guangchen & Wei, Weixian, 2021. "Financial development, openness, innovation, carbon emissions, and economic growth in China," Energy Economics, Elsevier, vol. 97(C).
    11. Wang, Xiong & Wang, Xiao & Ren, Xiaohang & Wen, Fenghua, 2022. "Can digital financial inclusion affect CO2 emissions of China at the prefecture level? Evidence from a spatial econometric approach," Energy Economics, Elsevier, vol. 109(C).
    12. Zhenkai Yang & Mei-Chih Wang & Tsangyao Chang & Wing-Keung Wong & Fangjhy Li, 2022. "Which Factors Determine CO 2 Emissions in China? Trade Openness, Financial Development, Coal Consumption, Economic Growth or Urbanization: Quantile Granger Causality Test," Energies, MDPI, vol. 15(7), pages 1-18, March.
    13. Xu, Deyi & Sheraz, Muhammad & Hassan, Arshad & Sinha, Avik & Ullah, Saif, 2022. "Financial development, renewable energy and CO2 emission in G7 countries: New evidence from non-linear and asymmetric analysis," Energy Economics, Elsevier, vol. 109(C).
    14. Li, Qihang & Zhang, Quanfei, 2025. "Administrative division adjustment and enterprise carbon emissions: Evidence from City-County Merger in China," Energy Economics, Elsevier, vol. 149(C).
    15. Xiao-Ying Dong & Qiying Ran & Yu Hao, 2019. "On the nonlinear relationship between energy consumption and economic development in China: new evidence from panel data threshold estimations," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 1837-1857, July.
    16. Pradhan, Rudra P. & Arvin, Mak B. & Nair, Mahendhiran & Bennett, Sara E. & Hall, John H., 2018. "The dynamics between energy consumption patterns, financial sector development and economic growth in Financial Action Task Force (FATF) countries," Energy, Elsevier, vol. 159(C), pages 42-53.
    17. Tilman Santarius & Johanna Pohl & Steffen Lange, 2020. "Digitalization and the Decoupling Debate: Can ICT Help to Reduce Environmental Impacts While the Economy Keeps Growing?," Sustainability, MDPI, vol. 12(18), pages 1-20, September.
    18. Fatima Sharif & Ihsanullah Hussain & Maria Qubtia, 2023. "Energy Consumption, Carbon Emission and Economic Growth at Aggregate and Disaggregate Level: A Panel Analysis of the Top Polluted Countries," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    19. Wang, Feng & Debel, Mulatu Tilahun, 2025. "Investing in the relationship between industrial output, renewable energy, and sustainable economic development in Ethiopia: Does clean energy matter?," Energy Policy, Elsevier, vol. 207(C).
    20. Kangyin Dong & Xiucheng Dong & Qingzhe Jiang, 2020. "How renewable energy consumption lower global CO2 emissions? Evidence from countries with different income levels," The World Economy, Wiley Blackwell, vol. 43(6), pages 1665-1698, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:15:p:6746-:d:1709120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.