Abstract
Oil and gas are key energy sources in the Gulf Cooperation Council (GCC) region. The present study examines the asymmetrical environmental effects of these energy sources and also tests the environmental Kuznets curve (EKC) from 1975 to 2019. In the long run, the EKC is corroborated in Kuwait and Saudi Arabia. But the EKC is not validated in the GCC Panel. Increasing oil consumption raises carbon dioxide (CO2) emissions in all investigated GCC countries, and decreasing oil consumption reduces CO2 emissions in Kuwait, Oman, Saudi Arabia, and the United Arab Emirates (UAE). The effect of oil consumption is found asymmetrical in Qatar and symmetrical in the rest of GCC countries. Increasing natural gas consumption (NGC) carries a positive effect in all investigated GCC countries, and decreasing NGC reduces emissions in Oman, Qatar, and the UAE. Moreover, NGC’s effects are asymmetrically in all GCC countries except Qatar. In the panel estimates, both increasing and decreasing oil and NGC have positive effects on CO2 emissions. The long-run effect of oil consumption on CO2 emissions is larger than the effect of NGC in most GCC economies and panel results. In the short run, increasing and decreasing oil consumption and NGC have a positive effect on emissions in all investigated economies except Saudi Arabia. In the long run, coefficients of decreasing oil consumption are found significantly greater than coefficients of increasing NGC in Kuwait, Oman, Saudi Arabia, the UAE, and the whole GCC. This finding corroborates that increasing CO2 emissions with increasing NGC is lower than decreasing CO2 emissions with decreasing oil consumption. Hence, we recommend these countries switch from oil consumption to NGC to reduce overall CO2 emissions.
Similar content being viewed by others
Data availability
Data will be available on request from the corresponding author.
Abbreviations
- The EKC:
-
The environmental Kuznets curve
- OC:
-
Oil consumption
- NGC:
-
Natural gas consumption
- REC:
-
Renewable energy consumption
- GCC:
-
Gulf Cooperation Council
- MENA:
-
The Middle East and North Africa
- EU:
-
European Union
- BRICS:
-
Brazil, Russia, India, China, and South Africa
- G-7:
-
The USA, Canada, the UK, France, Germany, Italy, and Japan
- The UAE:
-
The United Arab Emirates
- US:
-
United States
- PM2.5 :
-
Fine particulate matter
- CO2 :
-
Carbon dioxide
- CH4 :
-
Methane
- GHG:
-
Greenhouse gas
- N2O:
-
Nitrous oxide
- GDP:
-
Gross domestic product
- KG:
-
Kilogram
- kWh/m2 :
-
Kilowatt hour per meter square
- ECTt-1 :
-
Error correction term
- MZa:
-
A modified version of the Za test
- MZt:
-
A modified version of the Zt test
- MPT:
-
A modified version of the PT test
- MSB:
-
A modified version of Sargent–Bhargava (SB)
- CUSUM:
-
Cumulative sum
- DOLS:
-
Dynamic ordinary least square
- FMOLS:
-
Fully modified ordinary least square
- CD:
-
Cross-section dependence
- CIPS:
-
Cross-sectionally augmented Im, Pesaran, and Shin
- CS-ARDL :
-
Cross-sectionally augmented autoregressive distributed lag
References
Ahmad F, Draz MU, Ozturk I, Su L, Rauf A (2020) Looking for asymmetries and nonlinearities: the nexus between renewable energy and environmental degradation in the Northwestern provinces of China. J Clean 266:121714
Ahmed Z, Cary M, Ali S, Murshed M, Ullah H, Mahmood H (2021) Moving toward a green revolution in Japan: symmetric and asymmetric relationships among clean energy technology development investments, economic growth, and CO2 emissions. Energy Environ, https://doi.org/10.1177/0958305X211041780
Alajmi R (2021) Factors that impact greenhouse gas emissions in Saudi Arabia: decomposition analysis using LMDI. Energy Policy 156:112454
Alalouch C, Saleh M, Al-Saadi S (2016) Energy-efficient house in the GCC region. Procedia Soc Behav Sci 216:736–743
Alkathery M, Chaudhuri K (2021) Co-movement between oil price, CO2 emission, renewable energy and energy equities: evidence from GCC countries. J Environ Manage 297:113350
Alkhathan K, Javid M (2015) Carbon emissions and oil consumption in Saudi Arabia. Renew Sust Energ Rev 48:105–111
Al-Mulali U (2011) Oil consumption, CO2 emission and economic growth in MENA countries. Energy 36(10):6165–6171
Ansari MA, Akram V, Haide S (2022) A link between productivity, globalisation and carbon emissions: evidence from emissions by coal, oil and gas. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-18557-9
Antonakakis N, Chatziantoniou I, Filis G (2017) Energy consumption, CO2 emissions, and economic growth: an ethical dilemma. Renew Sust Energ Rev 68(1):808–824
Aslan A, Ocal O, Ozsolak B, Ozturk I (2022) Renewable energy and economic growth relationship under the oil reserve ownership: evidence from panel VAR approach. Renew Energ, https://doi.org/10.1016/j.renene.2022.02.039
Attiaoui I, Toumi H, Ammouri B, Gargouri I (2017) Causality links among renewable energy consumption, CO2 emissions, and economic growth in Africa: evidence from a panel ARDL-PMG approach. Environ Sci Pollut Res 24(14):13036–13048
Aune F, Grimsrud K, Lindholt L, Rosendahl J, Storrosten H (2017) Oil consumption subsidy removal in OPEC and other Non-OECD countries: oil market impacts and welfare effects. Energy Econ 68:395–409
Azam A, Rafiq M, Shafique M, Yuan J (2021) An empirical analysis of the nonlinear effects of natural gas, nuclear energy, renewable energy and ICT-trade in leading CO2 emitter countries: policy towards CO2 mitigation and economic sustainability. J Environ Manage 286:112232
Bayomi N, Heinrich M, Fernandez J (2017) Emission saving potentials from transition to natural gas usage: a view from four major emitters. Energy Procedia 142:3147–3153
Behmiri N, Manso J (2014) The linkage between crude oil consumption and economic growth in Latin America: the panel framework investigations for multiple regions. Energy 72:233–241
Bekhet H, Matar A, Yasmin T (2017) CO2 Emissions, energy consumption, economic growth, and financial development in GCC countries: dynamic simultaneous equation models. Renew Sust Energ Rev 70:117–132
Bildirici E, Bakirtas T (2016) The relationship among oil and coal consumption Carbon dioxide emissions, and economic growth in BRICS countries. J Renew Sustain Energy 8(4):045903
BP (2021) BP Statistical Review of World Energy 2021. https://www.bp.com/statisticalreview. Accessed 13 June 2021
Chakamera C, Alagidede P (2018) Electricity crisis and the effect of CO2 emissions on infrastructure-growth nexus in sub-Saharan Africa. Renew Sust Energ Rev 94(1):945–958
Charfeddine L, Kahia M (2019) Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the MENA region: a panel vector autoregressive (PVAR) analysis. Renew Energ 139:198–213
Chien F, Hsu CC, Ozturk I, Sharif A, Sadiq M (2022) The role of renewable energy and urbanization towards greenhouse gas emission in top Asian countries: evidence from advance panel estimations. Renew Energ 186:207–216
Chudik A, Pesaran MH (2013) Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. CESifo Working Paper No. 4232
Dong K, Sun R, Hochman G (2017a) Do natural gas and renewable energy consumption lead to less CO2 emission? Empirical evidence from a panel of BRICS countries. Energy 141:1466–1478
Dong K, Sun R, Hochman G, Zeng X, Li H, Jiang H (2017b) Impact of natural gas consumption on CO2 emissions: panel data evidence from China’s provinces. J Clean 162(1):400–410
Dong K, Sun R, Li H, Liao H (2018) Does natural gas consumption mitigate CO2 emissions: testing the environmental Kuznets curve hypothesis for 14 Asia-Pacific countries. Renew Sust Energ Rev 94:419–429
Dong K, Dong X, Jiang Q (2020) How renewable energy consumption lower global CO2 emissions? Evidence from countries with different income levels. World Econ 43(6):1665–1698
EIA (2017) EIA projects 28% increase in world energy use by 2040. Retrieved from EIA Website: https://www.eia.gov/todayinenergy/detail.php?id=32912. Accessed 09 July 2021
Elrahmani A, Hunnun J, Eljack F, Kazi M (2021) Status of renewable energy in the GCC region and future opportunities. Curr Opin Chem Eng 31:100664
Etokakpan MU, Solarin SA, Yorucu V, Bekun FV, Sarkodie SA (2020) Modeling natural gas consumption, capital formation, globalization, CO2 emissions and economic growth nexus in Malaysia: fresh evidence from combined cointegration and causality analysis. Energy Strategy Rev 31:100526
Gorus M, Aydin M (2019) The relationship between energy consumption, economic growth, and CO2 emission in MENA countries: causality analysis in the frequency domain. Energy 168:815–822
Grossman GM, Krueger AB (1991) Environmental impacts of the North American Free Trade Agreement. NBER Working paper 3914. https://doi.org/10.3386/w3914
Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377
He K, Huo H, Zhang Q, He D, An F, Wang M, Walsh M (2005) Oil consumption and CO2 emissions in China’s road transport: current status, future trends, and policy implications. Energy Policy 33(12):1499–1507
Higgins P, Higgins M (2005) A healthy reduction in oil consumption and carbon emissions. Energy Policy 33(1):1–4
IRENA 2019. Renewable energy market analysis: GCC 2019. https://www.irena.org/publications/2019/jan/renewable-energy-market-analysis-gcc-2019 (accessed on 15 February 2022)
Iriani M, Trabelsi M (2016) The economic impact of phasing out energy consumption subsidies in GCC countries. J Bus Econ Manag 87:35–49
Jabri S, Ahmed M (2016) Use of renewable energy for desalination in urban agriculture in the GCC countries: possibilities and challenges. J Agric Mar Sci 22(1):48–57
Jammazi R, Aloui C (2015) Environment degradation, economic growth and energy consumption nexus: a wavelet-windowed cross correlation approach. Physica A 436(1):110–125
Jiang L, Zing R, Chen X, Xue B (2021) A survey-based investigation of greenhouse gas and pollutant emissions from household energy consumption in the Qinghai-Tibet Plateau of China. Energy Build 235:110753
Johnston R (2013) GCC energy subsidies unsustainable, says Oman’s oil and gas minister. Retrieved from Oil Price Website: https://oilprice.com/Geopolitics/Middle-East/GCC-Energy-Subsidies-Unsustainable-Says-Omans-Oil-and-Gas-Minister.html. Accessed 12 June 2021
Kahouli B (2018) The causality link between energy electricity consumption, CO2 emissions, R&D stocks and economic growth in Mediterranean countries (MCs). Energy 145:388–399
Kanat O, Yan Z, Asghar MM, Ahmed Z, Mahmood H, Kirikkaleli D, Murshed M (2022) Do natural gas, oil, and coal consumption ameliorate environmental quality? Empirical evidence from Russia. Environ Sci Pollut Res 29:4540–4556
Kripfganz S, Schneider DC (2019) Response surface regressions for critical value bounds and approximate p-values in equilibrium correction models. Economics Department Discussion Papers Series, Paper number 19/01; University of Exeter: Exeter, UK, 2019. Available from: http://www.people.exeter.ac.uk/RePEc/dpapers/DP1901.pdf. Accessed 19 June 2021
Li H, Shahbaz M, Jiang H, Dong K (2021) Is natural gas consumption mitigating air pollution? Fresh evidence from national and regional analysis in China. Sustain Prod Consum 27:325–336
Lin B, Agyeman S (2021) Impact of natural gas consumption on sub-Saharan Africa’s CO2 emissions: evidence and policy perspective. Sci Total Environ 760:143321
Mahmood H, Furqan M (2021) Oil rents and greenhouse gas emissions: spatial analysis of Gulf Cooperation Council countries. Environ Dev Sustain 23(4):6215–6233
Mahmood H, Maalel N, Hassan MS (2021) Probing the energy-environmental Kuznets curve hypothesis in oil and natural gas consumption models considering urbanization and financial development in Middle East countries. Energies 14(11):3178
Morrow W, Gallagher K, Gollantes G, Lee H (2010) Analysis of policies to reduce oil consumption and greenhouse-gas emissions from the US transportation sector. Energy Policy 38(3):1305–1320
Munawwar S, Ghedira H (2014) A review of renewable energy and solar industry growth in the GCC region. Energy Procedia 57:3191–3202
Nathaniel SP, Alam MS, Murshed M, Mahmood H, Ahmad P (2021) The roles of nuclear energy, renewable energy, and economic growth in the abatement of carbon dioxide emissions in the G7 countries. Environ Sci Pollut Res 28(35):47957–47972
Ndoricimpa A (2017) Analysis of asymmetries in the nexus among energy use, pollution emissions and real output in South Africa. Energy 125:543–551
Ng S, Perron P (2001) Lag length selection and the construction of unit root tests with good size and power. Econometrica 66:1519–1554
Osman M, Gachino G, Hoque A (2016) Electricity consumption and economic growth in the GCC countries: panel data analysis. Energy Policy 98:318–327
Panayotou T (1993) Empirical tests and policy analysis of environmental degradation at different stages of economic development. ILO, Technology and Employment Programme, Geneva. http://www.ilo.org/public/libdoc/ilo/1993/93B09_31_engl.pdf. Accessed 06 June 2021
Paraschi S, Paraschi LS (2020) Trends of carbon dioxide (CO2) emissions from fossil fuels combustion (coal, gas and oil) in the EU member states from 1960 to 2018. Energy Rep 6:237–242
Pesaran MH (2004) General diagnostic test for cross-sectional dependence in panel. Empir Econ 60:13–50
Pesaran MH (2007) A simple panel unit root test in the presence of cross-section dependence. J Appl Econ 22:265–312
Pesaran MH, Shin Y, Smith RJ (2001) Structural analysis of vector error correction models with exogenous I(1) variables. J Econ 97:293–343
Rafindadi A, Muye I, Kaita R (2018) The effects of FDI and energy consumption on environmental pollution in predominantly resource-based economies of the GCC. Sustain Energy Technol Assess 25:126–137
Rej S, Bandyopadhyay A, Mahmood H, Murshed M, Mahmud S (2022) The role of liquefied petroleum gas in decarbonizing India: fresh evidence from wavelet–partial wavelet coherence approach. Environ Sci Pollut Res, https://doi.org/10.1007/s11356-021-17471-w
Salahuddin M, Gow J (2014) Economic growth, energy consumption and CO2 emissions in Gulf Cooperation Council countries. Energy 73:44–58
Salahuddin M, Gow J, Ozturk I (2015) Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council countries Robust? Renew Sust Energ Rev 51:317–326
Salahuddin M, Alam K, Ozturk I, Sohag K (2018) The effects of electricity consumption, economic growth, financial development and foreign direct investment on CO2 emissions in Kuwait. Renew Sust Energ Rev 81(2):2002–2010
Shahbaz M, Destek MA, Dong K, Jiao Z (2021) Time-varying impact of financial development on carbon emissions in G-7 countries: evidence from the long history. Technol Forecast Soc Change 171:120966
Shakib M, Yumei H, Rauf A, Alam M, Murshed M, Mahmood H (2022) Revisiting the energy-economy-environment relationships for attaining environmental sustainability: evidence from Belt and Road Initiative countries. Environ Sci Pollut Res 29:3808–3825
Sheikhzeinoddin A, Tarazkar MH, Behjat A, Al-mulali U, Ozturk I (2022) The nexus between environmental performance and economic growth: new evidence from the Middle East and North Africa region. J Clean Prod 331:129892
Shin Y, Yu B, Greenwood-Nimmo M (2014) Modelling asymmetric cointegration and dynamic multiplier in an ARDL framework. In Festschrift in honor of Peter Schmidt: Econometric Methods and Applications; Horrace, W.C, Sickles, R.C, Eds, Springer Science and Business Media: New York, NY, USA, pp. 281–314, ISBN 1489980075.
Sohail HM, Li Z, Murshed M, Alvarado R, Mahmood H (2022) An analysis of the asymmetric effects of natural gas consumption on economic growth in Pakistan: a nonlinear autoregressive distributed lag approach. Environ Sci Pollut Res 29:5687–5702
Ustadi I, Mezher T, Abu-Zahra M (2017) The effect of the carbon capture and storage (CCS) technology deployment on the natural gas market in the United Arab Emirates. Energy Procedia 114:6366–6376
Westerlund J (2007) Testing for error correction in panel data. Oxf Bull Econ Stat 69(6):709–748
World Bank (2021) The worldwide governance indicators. The World Bank, Washington, DC. https://info.worldbank.org/governance/wgi/. Accessed 05 June 2021
Wu D, Geng Y, Pan H (2021) Whether natural gas consumption bring double dividends of economic growth and carbon dioxide emissions reduction in China? Renew Sust Energ Rev 137:110635
Xu B, Lin B (2019) Can expanding natural gas consumption reduce China’s CO2 emissions? Energy Econ 81:393–407
Yuping L, Ramzan M, Xingcheng L, Murshed M, Awosusi A, Bah S, Adebayo T (2021) Determinants of carbon emissions in Argentina: the roles of renewable energy consumption and globalization. Energy Rep 7:4747–4760
Zakarya G, Mostefa B, Abbes S, Seghir G (2015) Factors affecting CO2 emissions in the BRICS countries: a panel data analysis. Procedia Econ Financ 26:114–125
Zhang R, Li H, Chen T, Hou B (2021) How does natural gas consumption affect human health? Empirical evidence from China. J Clean 320:128795
Zhao J, Shahbaz M, Dong X, Dongab K (2021) How does financial risk affect global CO2 emissions? The role of technological innovation. Technol Forecast Soc Change 168:120751
Author information
Authors and Affiliations
Contributions
H. M., conceptualization and formal analysis; writing original draft; methodology, and review and editing.
Corresponding author
Ethics declarations
Ethics approval and consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The author declares no competing interests.
Additional information
Responsible editor: Ilhan Ozturk
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Mahmood, H. The effects of natural gas and oil consumption on CO2 emissions in GCC countries: asymmetry analysis. Environ Sci Pollut Res 29, 57980–57996 (2022). https://doi.org/10.1007/s11356-022-19851-2
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-022-19851-2