Climate Change–GDP Nexus for GCC Countries: Environmental Kuznets Curve Hypothesis

This study explores the Environmental Kuznets Curve (EKC) hypothesis, focusing on the relationship between economic growth and carbon dioxide (CO2) emissions in oil-exporting countries, specifically the Gulf Cooperation Council (GCC) nations, during the period from 2001 to 2022. Using a panel data approach, the research includes various diagnostic tests such as stationarity tests, serial correlation tests, pooled ordinary least squares, fixed and random effects models, chi-square tests, cointegration tests, and causality tests. The results support the EKC hypothesis within the GCC, revealing a statistically significant positive impact of gross domestic product (GDP) growth on CO2 emissions (p < 0.05), with evidence of a bidirectional causality between GDP growth and CO2 emissions (p < 0.05). However, the study’s scope is limited to the GCC countries, which may constrain the applicability of the findings to regions with different economic and energy structures. Nonetheless, it highlights the critical need for GCC nations to adopt policies focused on clean energy, energy reform, and sustainable development to address rising emissions while balancing economic growth. This study’s contribution lies in its critical evaluation of the EKC hypothesis and its focus on the environmental effects of economic growth, using the GCC region as a case study.