Carbon dioxide emissions and the economic growth: competitiveness and economic development view
Abstract
Purpose
This study aims to shed light on the experience of the United Arab Emirates (UAE) in balancing three main pillars: the environmental criteria, the reduction of CO2 emissions and the economic growth. Based on the environmental Kuznets curve (EKC) framework, it will assess the causal relationship between economic indicators such as gross domestic product (GDP) per capita, trade openness and energy use and environmental indicators such as CO2 emissions.
Design/methodology/approach
The analysis relies on a period of 40 years (1981–2020) where data is extracted from the World Bank database. This study uses the unit root test for time series stationarity, the optimal lag length test, the “Johansen” test for co-integration and the vector error correction model.
Findings
The paper concludes to two major findings. On a short-term basis, CO2 emissions and economic indicators are negatively correlated, whereas on a long-term basis, there is no association between CO2 emissions and economic indicators in the UAE.
Research limitations/implications
The research ends with important recommendations. It illustrates the importance of rationalizing the use of primary resources and the necessity to embrace successful and efficient policies in the energy production.
Practical implications
More specifically, UAE is urged to address the problem of CO2 emissions in the electricity sector and increase awareness of the use of environmentally friendly processes in the transport and industrial sectors. While setting their economic agendas, UAE are encouraged to meet environmental criteria and invest in renewable energy projects such as “Shams 1”, the largest solar power plant outside of Spain and the USA.
Originality/value
The current study is significant in its research on the environmental impact of economic development, trade openness and energy use policies in the UAE. It uses CO2 emissions as an environmental proxy and evaluates the environmental policies adopted in the UAE to reduce its impact.
Keywords
Acknowledgements
The author would like to express his sincere gratitude to Professor Abdulla Y. Al Hawaj, the founding president of Ahlia University, for his unwavering support for scientific research. His commitment to promoting academic excellence and fostering a culture of innovation has been a key driver in the success of our research endeavors. Author would also like to thank Editor-in-chief Professor Philippe Gugler from University of Fribourg – Switzerland, anonymous reviewers for their comments and suggestions.
Citation
Hamdan, A. (2023), "Carbon dioxide emissions and the economic growth: competitiveness and economic development view", Competitiveness Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CR-04-2023-0087
Publisher
:Emerald Publishing Limited
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