Environmental Kuznets Curve dynamics in oil-rich economies
Abstract
The Gulf Cooperation Council (GCC) economies, among the world’s largest per-capita carbon emitters, face a pressing policy dilemma of environmental sustainability. The conventional mean-based studies often mask heterogeneous effects across the emissions distribution and yield inconclusive results for resource-rich, energy-intensive settings such as the GCC. This gap limits the design of targeted decarbonization strategies aligned with national visions (e.g., Saudi Vision 2030 and UAE Net Zero 2050). Hence, this study revisits the Environmental Kuznets Curve (EKC) hypothesis for the six GCC countries over 2000–2024 using annual panel data. This study applies quantile regression to capture distribution-specific impacts of economic growth, trade openness, energy use, and urban population on carbon emissions. Results are validated through Dumitrescu-Hurlin causality tests and robustness checks. Findings consistently reject the EKC: economic growth exerts a monotonic positive effect on carbon emissions with no turning point. Energy efficiency and renewable adoption mitigate emissions, while trade openness and technological diffusion also exert reducing effects. In contrast, urbanization significantly amplifies emissions, highlighting demographic pressures. The results underscore that environmental improvements in the GCC require deliberate structural shifts in energy diversification, urban planning, and trade policies rather than growth alone. These context-specific insights advance the environmental economics literature and offer actionable guidance for sustainable development in resource-dependent economies.