Abstract:
This study empirically examine the effects of foreign direct investment inflows and energy consumption on
environmental pollution in the GCC from 1990 to 2014. The study employed the Pooled Mean Group (PMG)
methodology. The findings of the study discovered FDI inflows to have negative impact on the environment
while energy consumption was detected to have positive impact and both were found to be statistically significant
in explaining the extent of carbon emissions in the region. Additionally, higher disposable income,
domestic investment, and FDI were detected to have significant influence on energy use in the GCC. The study
also discovered how higher disposable income and FDI helps in improving environmental quality in the GCC.
While energy use through domestic investment reduces it. Furthermore, relative income negatively impacts the
environment through FDI. Our results did not support the idea that the selected GCC countries are pollution
haven. The study conclude that for these countries to enjoy perpetual benefits of pollution free states, there is the
need to prioritize full scale production of efficient, sufficient and sustainable green energy and ensure optimum
energy mix management. This will reduce the level of CO2 emission as a result of heavy energy consumption of
these countries as discovered by the study
