The Impact of Structural Change on Carbon Dioxide Emissions: Further Investigation for GCC Countries

Abstract

Structural change plays a crucial role in  GCC countries, influencing economic development and impacting CO2 emissions and pollution levels. Efforts to diversify the economy aim to reduce dependence on oil and gas. This includes promoting renewable energy, investing in infrastructure, and developing service sectors such as education, health, tourism, and trade. These changes often enhance energy efficiency, leading to lower emissions. The main objective of this study is to analyze the impact of structural change and other variables, including energy consumption, economic growth (GDP), population, and globalization, on CO2 emissions in GCC countries from 2003 to 2021. We employed the PMG-ARDL approach using panel data to investigate these relationships. Our findings reveal that, in the long term, CO2 emissions in the GCC countries are significantly affected by economic growth (GDP), population growth, energy consumption, and globalization. In contrast, structural change significantly contributes to reducing these emissions. These results have important implications for policy-making in GCC countries, suggesting that sustainable development strategies should focus on integrating environmental considerations, particularly by promoting structural changes that enhance energy efficiency and reduce emissions.