Do income and consumption growth cause CO2 emissions in Qatar? Implications for climate policy

Abstract

Qatar has experienced a remarkable surge in all four components of gross domestic product (GDP)—consumption, government spending, investment, and net exports as well as significant growth in population over the past thirty years. Despite a potential link between increasing production and consumption and a corresponding rise in CO2 emissions in Qatar, there exists a significant gap in the literature addressing this linkage. Using sectoral data, this article investigates the long-term trends of GDP growth and expenditure and their nexus with CO2 emissions in Qatar. Least square regression analysis (multiple regression approach) and Granger Causality tests have been used to examine the long-term association between GDP-expenditure and its components and CO2 emission patterns. Additionally, the study discusses the environmental implications and the necessity for effective natural resource management in climate policy. Our analysis reveals consistent average annual increases in Qatar over the past three decades: 4.8% in total expenditure, 5.4% in GDP, 4% in government spending, 4.7% in household consumption, and 1.77% in CO2 emissions. During this period, production- and consumption-based emissions surged by 700%, while consumption-based emissions rose by 500%. The energy sector alone accounts for 86% of Qatar's total CO2 emissions. Significant Granger causality was found between CO2 emissions and various economic growth and GDP components, suggesting a potential inverted U-shaped Kuznets Curve, indicating a possible decline in CO2 emissions in future. However, achieving this decline in CO2 emissions in accordance with UN SDG Goal 12 requires additional policy measures focussed on carbon capture and storage, circular economy practices, carbon pricing, and complementary climate policies. Specific policy actions include establishing CO2 observatories, promoting clean energy initiatives, and engaging the private sector.