Exploring the Effects of Energy Consumption, Financial Market Development, and Urbanization on CO₂ Emissions in GCC Countries: Cross-Sectional Dependence Analysis

Financial Market Development (FMD), energy consumption, and urbanization can have significant effects on carbon emissions in fossil fuels-dependent GCC economies, which can be a hurdle in the way of targets 8 and 13 of the Sustainable Development Goals (SDGs). Thus, the influence of these factors on CO₂ emissions has been tested in six GCC economies in the Environmental Kuznets Curve (EKC) framework. For this purpose, the Cross-Sectional Dependence econometrics has been utilized for the period 1990-2022. The results corroborate the EKC with threshold points of $13867 and $28158 in the long and short run, respectively. In both periods, energy consumption raises emissions. FMD reduces emissions and urbanization raises emissions in the long run. However, their short-run impacts are found insignificant. The study recommends encouraging FMD in the GCC region. However, urbanization and energy consumption should be controlled through policy interventions.