Urbanization, growth, and carbon footprints: A GCC perspective on sustainable development

Understanding the relationship between economic growth, urbanization, and environmental sustainability is crucial for shaping effective climate policies, particularly in resource-rich economies. This study investigates the impact of economic growth (GDP) and urbanization on carbon dioxide (CO 2 ) emissions in Gulf Cooperation Council (GCC) countries, where rapid economic expansion and urbanization pose significant environmental challenges. Utilizing the STIRPAT model and a comprehensive panel dataset, we apply advanced econometric techniques, including Feasible Generalized Least Squares, Panel Corrected Standard Errors, and the Generalized Method of Moments, to ensure robust estimation. Our findings indicate that both GDP and energy consumption (EC) are major drivers of CO 2 emissions, with EC exerting a stronger influence. Specifically, a 1 unit increase in GDP per capita and 1 % in EC leads to a rise in CO 2 emissions by 0.3863 % and 0.7147 %, respectively. Urbanization also contributes to higher emissions; however, the squared term of urbanization suggests that environmental efficiency improves at later stages of urbanization. The results validate the Environmental Kuznets Curve (EKC) and Ecological Modernization Theory (EMT), indicating that at advanced levels of economic and urban development, environmental impact declines. Additionally, Foreign Direct Investment (FDI) is found to have a negative environmental effect, aligning with the Pollution Haven Hypothesis, while trade openness is associated with lower emissions, emphasizing the importance of sustainable trade policies. These findings offer critical policy insights, highlighting the need for GCC countries to transition toward greener energy sources, implement stricter environmental regulations, and promote sustainable urban planning to mitigate carbon emissions while sustaining economic growth.