The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter?
Achieving environmental sustainability whilst minimizing the climate change effect has become a global endeavor. Hence, this study examined the effect of energy consumption, economic growth, financial development, and globalization on CO<sub>2</sub> emissions in the Gulf Cooperation Coun...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2021-09-01
|
| Series: | Energies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/1996-1073/14/18/5897 |
| _version_ | 1797519457178877952 |
|---|---|
| author | Hala Baydoun Mehmet Aga |
| author_facet | Hala Baydoun Mehmet Aga |
| author_sort | Hala Baydoun |
| collection | DOAJ |
| description | Achieving environmental sustainability whilst minimizing the climate change effect has become a global endeavor. Hence, this study examined the effect of energy consumption, economic growth, financial development, and globalization on CO<sub>2</sub> emissions in the Gulf Cooperation Council (GCC) countries. The research utilized a dataset stretching from 1995 to 2018. In a bid to investigate these associations, the study applied cross-sectional dependence (CSD), slope heterogeneity (SH), Pesaran unit root, Westerlund cointegration, cross-sectionally augmented autoregressive distributed lag (CS-ARDL), and Dumitrescu and Hurlin (DH) causality approaches. The outcomes of the CSD and SH tests indicated that using the first-generation techniques produces misleading results. The panel unit root analysis unveiled that the series are I (1). Furthermore, the outcomes of the cointegration test revealed a long-run association between CO<sub>2</sub> emissions and the regressors, suggesting evidence of cointegration. The findings of the CS-ARDL showed that economic growth and energy consumption decrease environmental sustainability, while globalization improves it. The study also validated the environmental Kuznets curve (EKC) hypothesis for GCC economies. In addition, the results of the DH causality test demonstrated a feedback causality association between economic growth and CO<sub>2</sub> emissions and between financial development and CO<sub>2</sub> emissions. Moreover, there is a one-way causality from energy consumption and globalization to CO<sub>2</sub> emissions in GCC economies. According to the findings, environmental pollution in GCC countries is output-driven, which means that it is determined by the amount of energy generated and consumed. |
| first_indexed | 2024-03-10T07:43:03Z |
| format | Article |
| id | doaj.art-ebfe3f41e4524586abfe8ba9bdb89b99 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T07:43:03Z |
| publishDate | 2021-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-ebfe3f41e4524586abfe8ba9bdb89b992023-11-22T12:54:46ZengMDPI AGEnergies1996-10732021-09-011418589710.3390/en14185897The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter?Hala Baydoun0Mehmet Aga1Department of Accounting and Finance, Faculty of Economics and Administrative Sciences, Cyprus International University, North Cyprus, Mersin 10, Haspolat 99040, TurkeyDepartment of Accounting and Finance, Faculty of Economics and Administrative Sciences, Cyprus International University, North Cyprus, Mersin 10, Haspolat 99040, TurkeyAchieving environmental sustainability whilst minimizing the climate change effect has become a global endeavor. Hence, this study examined the effect of energy consumption, economic growth, financial development, and globalization on CO<sub>2</sub> emissions in the Gulf Cooperation Council (GCC) countries. The research utilized a dataset stretching from 1995 to 2018. In a bid to investigate these associations, the study applied cross-sectional dependence (CSD), slope heterogeneity (SH), Pesaran unit root, Westerlund cointegration, cross-sectionally augmented autoregressive distributed lag (CS-ARDL), and Dumitrescu and Hurlin (DH) causality approaches. The outcomes of the CSD and SH tests indicated that using the first-generation techniques produces misleading results. The panel unit root analysis unveiled that the series are I (1). Furthermore, the outcomes of the cointegration test revealed a long-run association between CO<sub>2</sub> emissions and the regressors, suggesting evidence of cointegration. The findings of the CS-ARDL showed that economic growth and energy consumption decrease environmental sustainability, while globalization improves it. The study also validated the environmental Kuznets curve (EKC) hypothesis for GCC economies. In addition, the results of the DH causality test demonstrated a feedback causality association between economic growth and CO<sub>2</sub> emissions and between financial development and CO<sub>2</sub> emissions. Moreover, there is a one-way causality from energy consumption and globalization to CO<sub>2</sub> emissions in GCC economies. According to the findings, environmental pollution in GCC countries is output-driven, which means that it is determined by the amount of energy generated and consumed.https://www.mdpi.com/1996-1073/14/18/5897CO<sub>2</sub> emissionseconomic growthenergy consumptionenvironmental sustainabilityfinancial developmentglobalization |
| spellingShingle | Hala Baydoun Mehmet Aga The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter? Energies CO<sub>2</sub> emissions economic growth energy consumption environmental sustainability financial development globalization |
| title | The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter? |
| title_full | The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter? |
| title_fullStr | The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter? |
| title_full_unstemmed | The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter? |
| title_short | The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter? |
| title_sort | effect of energy consumption and economic growth on environmental sustainability in the gcc countries does financial development matter |
| topic | CO<sub>2</sub> emissions economic growth energy consumption environmental sustainability financial development globalization |
| url | https://www.mdpi.com/1996-1073/14/18/5897 |
| work_keys_str_mv | AT halabaydoun theeffectofenergyconsumptionandeconomicgrowthonenvironmentalsustainabilityinthegcccountriesdoesfinancialdevelopmentmatter AT mehmetaga theeffectofenergyconsumptionandeconomicgrowthonenvironmentalsustainabilityinthegcccountriesdoesfinancialdevelopmentmatter AT halabaydoun effectofenergyconsumptionandeconomicgrowthonenvironmentalsustainabilityinthegcccountriesdoesfinancialdevelopmentmatter AT mehmetaga effectofenergyconsumptionandeconomicgrowthonenvironmentalsustainabilityinthegcccountriesdoesfinancialdevelopmentmatter |