Balancing Economic Growth and Environmental Quality within Gulf Cooperation Council (GCC) countries and Iran for The Period (2001-2020)

Abstract

This study delves into the impact of economic and industrial factors on environmental quality within Gulf Cooperation Council (GCC) countries and Iran. The research aims to analyze the relationships between export, renewable energy consumption, FDI inflows, annual industrial value-added growth, and their effects on per capita carbon dioxide emissions in Saudi Arabia, UAE, Qatar, and Iran, using panel data models for the period (2001–2020). The findings indicate that exports have a significant negative impact on CO2 emissions, suggesting that increased exports help reduce emissions. This can be attributed to the nature of exports within the countries. In contrast, FDI shows a mixed impact on CO2 emissions. This reflects the complex nature of investment and its varying environmental standards. Furthermore, the growth in industrial value-added is found to increase CO2 emissions, underscoring the environmental cost of industrial expansion. However, renewable energy consumption does not show a significant impact on reducing emissions, indicating that the current level of investment in renewable energy is insufficient to make a substantial difference in environmental quality. In summary, this study provides an in-depth understanding of the interplay between economic growth and environmental sustainability, emphasizing the crucial role of investment in shaping this dynamic.