Decoupling economic growth and CO2 emissions: a geopolitical comparison of the EU and GCC energy transitions

This study investigates the differing trajectories of carbon dioxide (CO2) emissions decoupling in the European Union (EU) and Gulf Cooperation Council (GCC) countries from 1990 to 2023. Using the Decoupling Consistency Index (DCI) in conjunction with the Logarithmic Mean Divisia Index (LMDI) decomposition, we analyze the contributions of CO2, energy intensity, economic growth, and population to emissions changes across distinct periods. The results reveal that the EU has achieved absolute decoupling, driven by sustained reductions in energy and CO₂ that outweigh economic growth pressures. In contrast, the GCC exhibits partial decoupling, with efficiency gains often offset by rapid economic expansion and population growth. Notably, the United Arab Emirates and Kuwait have made significant progress toward emissions reductions through accelerated renewable investments and energy reforms. At the same time, other GCC countries face challenges from fossil-fuel dependency. The study highlights the importance of tailored, region-specific climate policies and structural reforms to advance sustainable decarbonization. These findings provide critical insights for policymakers aiming to balance economic growth with environmental objectives in fossil-fuel-rich and transition economies.