On the interplay between energy consumption, economic growth and CO2 emission nexus in the GCC countries: A comparative analysis through wavelet approaches

In this paper, we investigate the cross linkages between CO2 emission, economic growth and energy consumption for six GCC countries (Saudi Arabia, Oman, Bahrain, Kuwait, UAE and Qatar) over the period (1980–2013). In doing so, we consider a new approach namely wavelet window cross correlation (WWCC) that combines multi-scaling decomposition, and lead/lag cross correlations. To further assess the robustness of this new method, we rely on the traditional wavelet coherence framework. The results pointed out the existence of bilateral causal effects between EC and EG while only a unidirectional relationship was found from EC to CO2 emissions. The intensity of the co-movements reaches its zenith at coarser scales (in the long run). In addition, the decoupling effects are identified in the short run becoming less pronounced in the long run. Overall, the findings support the hypothesis of the so-called neighborhood-effect since we found striking similarities across countries in the pattern of relationships between the variables. The implications of this study will be useful in better encircling the best ways to adopt a pro-active knowledge aiming to preserve the environment in the GCC region.