The environmental Kuznets curve relationship: a case study of the Gulf Cooperation Council region

By using panel data over the 1980-2017 period and two alternative indicators of environmental pollution (carbon dioxide (CO₂) and sulfur dioxide (SO₂) emissions), this paper investigates the validity of the environmental Kuznets curve (EKC) hypothesis in the Gulf Cooperation Council (GCC) region. Using three alternative econometric estimation techniques, we find strong evidence of a long-run inverted U-shaped relationship between real GDP per capita and both environmental indicators in the GCC region. Country-level short-run analysis indicates that the EKC hypothesis holds for Bahrain, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) when CO₂ emissions are used as a measure of environmental pollution. However, when SO₂ emissions are used as a measure of environmental pollution, the EKC hypothesis holds for Oman, Qatar, Saudi Arabia, and the UAE. The results of a recently developed panel causality test reveal one-way causality from real GDP per capita to CO₂ emissions and from real GDP per capita to SO₂ emissions.