Short- and long-run effects of renewable energy on environmental emissions in GCC countries: the moderating role of institutional quality using CS-ARDL

Despite rapid growth in renewable energy capacity, Gulf Cooperation Council (GCC) countries continue to experience rising emissions, underscoring the urgent need for effective policy solutions. This study examines the moderating role of institutional quality on the renewable energy–environmental emissions nexus for the GCC from 1990 to 2022. The Cross-sectional Autoregressive Distributed Lags (CS-ARDL) estimation technique is employed to analyze both short- and long-run relationships, as it accounts for heterogeneous panels with cross-sectional dependence and mixed orders of integration. The results show that institutional quality significantly influences the renewable energy–emissions relationship, revealing that renewable energy delivers reductions in emissions when supported by strong institutional frameworks. Additionally, the analysis reveals that for renewable energy to effectively lower emissions, a minimum institutional quality threshold of 1.8221 must be achieved. This finding is particularly relevant for the GCC, where renewable energy investments are expanding but institutional quality remains decisive in ensuring positive environmental outcomes. Accordingly, the study recommends that policymakers strengthen institutional quality to maximize the impact of renewable energy on emission reduction and sustainability.