The study examined the dynamic nexus between financial deepening, natural resource rent, nonrenewable-energy and renewable-energy consumption and CO2 emission by using a dataset of six GCC countries (UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain) from 1993 to 2019. For estimation, study applying second-generation panel unit root, cointegration and long-run estimation tests for robust and efficient results. The study confirms the presence of cross-sectional dependency while economic expansion and nonrenewable-energy contribute to CO2 emissions, financial deepening and renewable-energy consumption have a significant impact on reducing environmental degradation. Furthermore, the Dumitrescu-Hurlin causality test reveals a statistically significant bidirectional correlation between financial deepening, consumption of nonrenewable-energy and renewable-energy and CO2 emission. In light of these findings, a number of policy recommendations are provided to help the GCC countries overcome on CO2 emissions while promoting economic growth.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.