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Financial inclusion, natural resources rents, and energy intensity: Implications for environmental degradation in GCC countries

Year: 2025

Type: article

Abstract: The Gulf Cooperation Council (GCC) countries, which collectively possess a substantial share of the world's proven oil and gas reserves, remain heavily dependent on fossil fuels as their primary source of income. At the same time, GCC countries are under increasing pressure to meet Sustainable Development Goals (SDGs) and address escalating environmental concerns. This paper investigates the relationship between financial inclusion, energy intensity, and natural resources rents, in the context of environmental degradation across GCC countries during the 2004–2023 period. By applying the Method of Moments Quantile Regression (MMQR), the study finds that higher levels of energy intensity significantly exacerbate environmental degradation, while natural resources rents mitigate emissions at higher quantiles, suggesting potential for resource-financed environmental improvements. These findings highlight the need for tailored policy interventions, particularly in enhancing financial accessibility and equipping tax administrations to implement environmental levies.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.104811

Authors: Sabina Hodžić, Tanja Fatur Šikić, Mahmoud M. Abdellatif

Institutions: University of Rijeka, Qatar University

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Responsible consumption and production, Reduced inequalities

Open Access status: gold

Estimated APC paid: $1,930