Conference Paper
Does the Impact of Renewable Energy on Environment Performance Depend on Threshold Effects and Moderating Variables in GCC Countries?
No.
ERF32AC_20
Publisher
ERF
Date
May, 2026
Topic
Q4. Energy
Q5. Environmental Economics
This study examines the non-linear effects of renewable and non-renewable energy consumption on the Environmental Performance Index (EPI) in Gulf Cooperation Council (GCC) countries from 2002 to 2022, using a dynamic threshold regression model. Unlike previous studies that focus solely on direct energy-environment relationships, this research introduces moderating variables—including institutional quality, energy subsidies, and energy efficiency—to capture their role in shaping the impact of energy consumption on environmental outcomes. The findings reveal that non-renewable energy consumption significantly deteriorates environmental performance beyond critical thresholds (85%-99.9%), particularly affecting air quality and climate change. Conversely, renewable energy consumption enhances EPI performance only after surpassing key adoption levels (5.5%-10.9%), with its effectiveness amplified when supported by favorable policy and governance conditions. The results demonstrate that institutional quality and energy efficiency mitigate the adverse effects of fossil fuel use while reinforcing the environmental benefits of renewable energy. These insights highlight the need for comprehensive policy reforms, including the restructuring of energy subsidies, strengthening institutional frameworks, and promoting clean energy investments, to accelerate the sustainability transition in GCC economies.
Research Fellows
Thouraya Hadj Amor
Assistant Professor of Economics, University of Monastir
Authors
Ridha Nouira
Assistant Professor of Quantitative Economics at University...
Authors
Christophe Rault
Full Professor of Economics, University of Orléans