Energy Transition and Carbon Decoupling in GCC Economies (2008–2023)

Hydrocarbon-dependent economies face a critical challenge: sustaining economic growth while reducing carbon emissions. This study examines whether structural energy transition has begun to weaken the growth–emissions relationship in four Gulf Cooperation Council (GCC) economies: Saudi Arabia, United Arab Emirates, Qatar, and Bahrain, over the period 2008–2023. The analysis integrates three complementary approaches: Tapio elasticity-based decoupling analysis, a composite Energy Transition Performance Index (ETPI), and fixed-effects panel regression. This multi-method framework distinguishes between short-term cyclical decoupling and longer-term structural transition dynamics. The results show that strong decoupling is concentrated during crisis periods (2009 and 2020), indicating that emissions reductions are often cyclical rather than structural. More consistent, though moderate, weak decoupling emerges after 2015, coinciding with gradual improvements in renewable energy adoption and carbon efficiency. However, persistent fossil fuel dependence and rising electricity demand continue to constrain bigger structural change. The ETPI reveals significant cross-country variation, with the UAE demonstrating relatively stronger transition performance. Panel regression results indicate that renewable energy expansion is associated with lower carbon intensity, but its impact remains constrained by fossil-based energy systems and demand-side pressures. Overall, the findings suggest that energy transition in GCC economies is progressing but remains partial and uneven, requiring deeper structural reforms to achieve sustained decoupling.