Economic Complexity and Carbon Neutrality Targets in the GCC

This study explores how economic complexity shapes carbon dioxide (CO2) emissions in the Gulf Cooperation Council (GCC) countries from 1990 to 2022. Using a dynamic panel threshold model, we investigate whether rising economic complexity creates a turning point that changes how economic growth, energy use, trade openness, and renewable energy adoption affect environmental outcomes. The analysis uncovers a clear threshold level of economic complexity that divides the sample into two distinct regimes. In the low-complexity regime, CO2 emissions are highly sensitive to economic growth and energy consumption, while neither renewable energy nor trade openness plays a meaningful role in reducing emissions. In contrast, once countries cross into the high-complexity regime, the picture changes: energy intensity declines, renewable energy becomes a powerful tool for lowering emissions, and trade openness supports cleaner production and greener technologies. This shift reflects a partial decoupling of economic growth from environmental damage. Overall, the findings highlight how structural transformation and technological upgrading can support climate goals in hydrocarbon-dependent economies. By prioritizing innovation, diversification, and strong policy frameworks, GCC countries can advance toward carbon neutrality while maintaining economic momentum

Carbon neutrality · Decoupling (probability · Energy policy · Low-carbon economy · Neutrality · Openness to experience · Panel data · Renewable energy · Threshold model · Economic and Technological Innovation · Energy, Environment, Economic Growth · Regional resilience and development