Investigation of the Impact of Environmental Degradation on the Transition to Clean Energy: New Evidence from Sultanate of Oman

All nations are searching for ways to address their environmental gaps to assure long-term sustainability, given the alarming rate at which the environment is deteriorating. As one of the nations pursuing clean energy, Oman needs to embrace eco-friendly practices that can encourage sustainability and resource efficiency to establish green ecosystems. This study uses an autoregressive distributed lag (ARDL) model to examine the link between CO 2 emissions, GDP, energy consumption, financial development, foreign direct investment, urbanization, and population in the Sultanate of Oman between 1990 and 2023. The Middle Eastern nation of Oman was selected for the case study because it has traditionally depended on its domestic fossil fuel resources. Furthermore, the country has been a net exporter and surplus oil producer, underscoring Oman’s long-standing reliance on fossil fuels. The findings indicate that urbanization and GDP lower CO 2 emissions, whereas population growth, energy use, FDI, and financial development raise emissions. As per the EKC model, the GDP2 coefficient was 0.488 and β 1 < 0. This suggests that there is a positive correlation between environmental degradation and economic growth in Oman, although the EKC only applies up to a particular income level. The findings suggest enacting additional environmental regulations to support sustainable business behavior, raising public understanding of environmental issues, using more clean energy technologies, lowering energy consumption, and reaching the goal of net-zero carbon emissions.