Exploring the link between natural resources, urbanization, human capital, and ecological footprint: A case of GCC countries

Abstract

Natural resources (NR), play a significant role in determining the strength of countries' economies. Still, at the same time, NR is accompanied by concerns about its impact on the environment. The accelerated economic growth and fast urbanization have increased the consumption of NR in the Gulf Cooperation Council (GCC) countries, which in turn leads to fears of a negative impact on the environment. Therefore, this work investigates the impact of NR, represented by total natural resource rents (NRR), energy consumption (EC), human capital (HC), urbanization, and GDP on the ecological footprint (EF) in GCC countries from 1995 to 2017. The research uses the Feasible Generalized Least Squares model to investigate cointegration and correlation. The result confirms the significant negative connection between NRR and EF. Urbanization is not accompanied by a detrimental impact on the EF, as an increase of 1% in URB leads to a decrease in EF by 1.5327%. Interestingly, HC does not help in limiting the environmental degradation in the GCC countries, where an increase of 1% in HC is accompanied by an increase in EF by 0.7966%. Analogously, the GDP is linked with EF in a significant positive relationship. EC has a significant positive connection with EF. The results of the Panel Corrected Standard Errors technique as a robustness check for our paper are consistent with the primary model results. Thus, policymakers of the GCC countries must continue to implement stricter policies to prevent the unsustainable use of NR.

Keywords

• Natural resources
• Urbanization
• Human capital
• Ecological footprint
• GCC countries