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The Fiscal and Monetary Policies and Environment in GCC Countries: Analysis of Territory and Consumption-Based CO 2 Emissions

Author

Listed:
  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj 11942, Saudi Arabia)

  • Anass Hamadelneel Adow

    (Department of Accounting, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj 11942, Saudi Arabia)

  • Muzafar Abbas

    (Department of Business Administration, Community College, Prince Sattam Bin Abdulaziz University, Alkharj 11942, Saudi Arabia)

  • Asim Iqbal

    (Department of Economics, University of Education, Lahore 54000, Pakistan)

  • Muntasir Murshed

    (School of Business and Economics, North South University, Dhaka 1229, Bangladesh)

  • Maham Furqan

    (School of Public Policy, Oregon State University, Corvallis, OR 97331, USA)

Abstract

Expansionary monetary and fiscal policies are necessary for economic and environmental development. The present research studies the impact of monetary policy and fiscal policy on Territory-Based CO 2 (TBC) and Consumption-Based CO 2 (CBC) emissions in Gulf Cooperation Council (GCC) economies from 1990–2019. The cointegration is corroborated through various tests, and long-term relationships are found in both TBC and CBC models. Government expenditures have long-term positive effects on both TBC and CBC emissions and short-term positive effects on TBC emissions in the region. Money supply negatively affects the TBC and CBC emissions in the long run and positively affects TBC and CBC emissions in the short run. Hence, monetary policy needs a long time to have positive ecological effects in the GCC region. Moreover, fiscal policy in both the long and short run and monetary policy in the short run have scale effects in GCC economies. Therefore, we recommend reducing fiscal measures and encouraging monetary policy in the long run to have positive environmental outcomes in the region.

Suggested Citation

  • Haider Mahmood & Anass Hamadelneel Adow & Muzafar Abbas & Asim Iqbal & Muntasir Murshed & Maham Furqan, 2022. "The Fiscal and Monetary Policies and Environment in GCC Countries: Analysis of Territory and Consumption-Based CO 2 Emissions," Sustainability, MDPI, vol. 14(3), pages 1-13, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1225-:d:730686
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    Citations

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    Cited by:

    1. Haider Mahmood & Alam Asadov & Muhammad Tanveer & Maham Furqan & Zhang Yu, 2022. "Impact of Oil Price, Economic Growth and Urbanization on CO 2 Emissions in GCC Countries: Asymmetry Analysis," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    2. Bai, Xue & Zhong, Jingqiu & Huang, Dong, 2024. "Economic instruments for natural resource efficiency: The role of carbon taxation and fiscal policy," Resources Policy, Elsevier, vol. 89(C).
    3. MBASSI, Christophe Martial & HYOBA, Suzanne Edwige Clarisse & SHAHBAZ, Muhammad, 2023. "Does monetary policy really matter for environmental protection? The case of inflation targeting," Research in Economics, Elsevier, vol. 77(3), pages 427-452.
    4. Naz, Farah & Tanveer, Arifa & Karim, Sitara & Dowling, Michael, 2024. "The decoupling dilemma: Examining economic growth and carbon emissions in emerging economic blocs," Energy Economics, Elsevier, vol. 138(C).
    5. Wang, Chengjie & Zhou, Dawei & Guo, Xiaojing & Kayani, Umar Nawaz, 2024. "Role of natural resource rents, financial development and technological research in achieving sustainable development: A study of South Asian Countries," Resources Policy, Elsevier, vol. 89(C).

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