THE GCC countries are confronted with escalating environmental concerns as a result of economic expansion, a heavy reliance on natural resources, and an increase in capital investment, as global attention toward sustainability continues to intensify.
As a result of focused policy changes and calculated investments, Bahrain, a smaller yet hydrocarbon-dependant GCC nation, is making quantifiable strides toward a low-carbon economy.
Bahrain pledged to reduce emissions by 30 per cent by 2035 in order to reach net-zero emissions by 2060. In line with its National Energy Strategy, the kingdom also intends to emphasise the transition to sustainability in its growth model by obtaining 20pc of its energy mix from renewable sources by 2035.
To address larger concerns in the GCC area, this study looks at the symmetric and asymmetric effects of natural resources, capital investments and economic development on environmental deterioration from 1990 to 2021. The study uses symmetric and asymmetric ARDL models to analyse the short- and long-term dynamics of economic drivers and carbon dioxide (CO₂) emissions.
The findings show asymmetric environmental repercussions caused by positive and negative shocks to natural resources, capital investment and economic growth. Positive shocks in these domains boost CO₂ emissions in both short and long term, whereas negative shocks in natural resources and economic growth reduce emissions.
The Environmental Kuznets Curve (EKC) and Pollution Haven Hypothesis are supported by these data, which imply that although economic growth initially deteriorates environmental quality, sustainable development strategies have the potential to reverse this tendency.
The report indicates that although limiting development or investment through contractionary measures is neither economically nor practically feasible for GCC countries, it is imperative that these drivers be redirected toward sustainable routes. The following are some policy recommendations:
* accelerating the adoption of renewable energy technology;
* improving the efficiency of the use of natural resources;
* implementing green investment frameworks and sustainable fiscal policies;
* strengthening institutional ability to handle environmental risk.
Bahrain is in a unique position to serve as a regional example for the low-carbon transition because of its smaller economy and centralised administration. However, to balance economic aspirations with environmental responsibilities, the larger GCC area must also undertake co-operative efforts, technical innovation and investment in sustainability.
Dr Md Shabbir Alam
Assistant Professor
Department of Economics and Finance
College of Business Administration
University of Bahrain
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