Transition to a Low-Carbon Economy in Oil-Exporting Countries: The Role of Macroeconomic Factors

Abstract

The increasing consumption of fossil fuels, combined with their non-renewable nature, has intensified carbon dioxide emissions worldwide. This issue is particularly critical in oil-exporting countries due to their strong economic dependence on oil and gas revenues. Accordingly, this study examines the impact of selected economic factors on environmental pollution using panel data from seven oil-exporting countries in the Middle East over the period 1970–2023. The analysis is conducted within a panel econometric framework.The empirical results indicate that gross domestic product [1]has a negative and statistically significant effect on carbon dioxide emissions, suggesting improvements in energy efficiency and a gradual shift in economic structures toward less energy-intensive activities in the studied countries. In contrast, foreign investment and urban population growth exert positive and significant effects on carbon emissions, implying that these factors are mainly concentrated in energy-intensive sectors and heavy industries.Moreover, the findings reveal that renewable energy production is positively associated with carbon dioxide emissions, which may reflect the expansion of clean energy sources alongside increasing total energy consumption rather than a complete substitution of fossil fuels.Overall, the results highlight the importance of policies aimed at enhancing energy efficiency, improving production structures, and strengthening environmental regulations in order to reduce environmental pressure and promote sustainable development in oil-exporting countries