The Impact of Economic Growth, Energy Consumption, and Urbanization on the CO2 Emission of a Selected Group of OPEC Countries: A Spatial Econometric Approach

The swift expansion of urban areas in OPEC member countries and the great reliance their economy has on the consumption of crude oil have led to drastic environmental changes in these states. Therefore, it is important to investigate the factors influencing the emission of CO2 such as economic growth, energy consumption, and urbanization in these countries. Economic growth and energy consumption are among the other influential factors. In this article, the effect of economic growth, energy consumption, and urbanization on the emission of CO2 has been studied. Thus, a sample of eight OPEC members was chosen for the duration of 2008 to 2018. Due to the effects of proximity, a spatial econometric approach was taken to investigate the spillover effects of neighboring countries. The results showed the existence of spatial reliance between the countries under study. The separate analysis of the spillover demonstrated that the effect of both economic and local urban population growth (direct) and spillover (indirect) increased the emission of CO2 in each country and its neighboring state, but the amount of direct effect was more than the indirect on other countries. The reality that environmental pollution resulting from economic growth and the development of urban areas and the increase of the consumption of nonrenewable energy in each of the studied countries also influence the environment of their neighboring states has laid the foundation for cooperation between neighboring OPEC countries to develop the technology to produce clean, renewable energy.