Balancing rapid economic growth and urbanization with environmental sustainability remains a critical challenge for fossil fuel–dependent GCC economies. Understanding the influence of macroeconomic and financial elements on environmental results is crucial for realising sustainable development. This study explores the intricate connections among economic growth, urbanisation, globalisation, financial development, and environmental sustainability in GCC nations from 1985 to 2022, employing sophisticated panel econometric methods. The study addresses cross-sectional dependence, heterogeneous dynamics, and potential endogeneity by utilizing advanced panel econometric techniques, such as Cross-Sectionally Augmented ARDL (CS-ARDL) and System GMM estimation. The results substantiate the validity of the Environmental Kuznets Curve (EKC) hypothesis in the GCC region. This suggests that sustained economic growth eventually results in environmental advances. The rapid expansion of urban areas is discovered to substantially exacerbate environmental degradation, suggesting that urbanization imposes additional ecological pressures rather than improving resource efficiency. Financial development and globalization, do not exhibit statistically significant impacts implying that their environmental effects may be context-specific or take longer to manifest. Affirming that endogeneity does not distort the core findings, these results remain robust across robustness tests using dynamic panel GMM estimation. Policy implications indicate that it is vital for GCC governments to deepen global environmental cooperation, promote green technologies, align financial systems with sustainability targets, and integrate sustainable urban planning. It is imperative to integrate sustainability into the foundation of national development strategies in order to achieve a harmonious equilibrium between economic growth and long-term preservation of the environment in the region.
Wani et al. (Sat,) studied this question.