Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?

Abstract

The relationship between carbon dioxide emissions, economic growth, electricity consumption and financial development in the Gulf Cooperation Council (GCC) countries is investigated in this study using panel data for the period of 1980-2012. A number of econometric techniques: dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS) and the dynamic fixed effect model (DFE) are applied in order to estimate the long-run relationship between the variables. The long-run relationship is found to be robust across these different econometric specifications. No significant short-run significant relationship was observed. Electricity consumption and economic growth have a positive long run relationship with carbon dioxide (CO 2 ) emissions whilst a negative and significant relationship was found between CO 2 emissions and financial development. The findings imply that electricity consumption and economic growth stimulate CO 2 emissions in GCC countries while financial development reduces it. Granger causality results reveal that there is a bidirectional causal link between economic growth and CO 2 emissions and a unidirectional causal link running from electricity consumption to CO 2 emissions. However, there is no causal link between financial development and CO 2 emissions. Also, impulse response and variance decomposition analysis outline forecasted impacts of economic growth and electricity consumption on future CO 2 emissions.

Effect of economic growth on CO2 emission in developing countries: Evidence from a dynamic panel threshold model

“…On the nexus between CO 2 emissions, economic growth, electricity consumption and financial development in six Gulf Cooperation Council (GCC) countries, Salahuddin, Gow, and Ozturk (2015) employed panel data for the period of 1980-2012 and various methods (dynamic ordinary least squares (DOLS), FMOLS and the dynamic fixed effect (DFE) models) to examine the long-run relationship between the variables. Results showed that electricity consumption and economic growth have a positive long run relationship with CO 2 emissions while financial development had a negative and significant relationship.…”

Ex-Ante Analysis of Economic, Social and Environmental Impacts of Large-Scale Renewable and Nuclear Energy Targets for Global Electricity Generation by 2030

“…The subsequent economic stimulus, environmental preservation, and improvement to social system are pillars of sustainability. Several studies have assessed the renewable energy targets for specific regions separately, e.g., the USA [3], China [4], India [5], Malaysia [6,7], Taiwan [8], Germany [9], Turkey [10,11], The Netherlands [12] and Spain [13,14], or multi-countries, e.g., the Gulf Cooperation Council (GCC) countries [15], South Asian Association for Regional Cooperation (SSARC) countries [16], BRICS countries [17], and European Union (EU) [18,19]. Because country targets might have strong spillover effects into other regions, it is vital to study renewable energy targets on global scale.…”

Analysis on the Threshold Effect of the Factors Affecting the Relationship between China's Economic Growth and Carbon Emission

“…causality test and showed there was a bidirectional causal link between economic growth and CO 2 emissions [6]. There are also a large number of literature apply the causality test to study the relationship between GDP and CO 2 emissions in domestic.…”