The effect of climate risk on the human development index using the panel time-varying interactive fixed effects

Abstract

This study examines the effect of the Climate Risk Index (CRI) on the Human Development Index (HDI) using the innovative panel Time-Varying Interactive Fixed Effect (TV-IFE) in the Gulf Cooperation Council (GCC) during the period 2005–2024. The effects of climate risk on human development intensified drastically after 2020, having been insignificant from 2005 to 2010. Fragility increased during the subsequent decade, from 2010 to 2020, amid rising temperatures and water scarcity. This study also considers the effect of Information and Communications Technology (ICT) and PM2.5 air pollution. ICT has a positive impact, indicating an essential role in enhancing education, healthcare, and the HDI. The PM 2.5 variable has increasingly contributed to HDI outcomes in the GCC since 2020. These findings underscore the need for new policy implications in addressing climate vulnerability and enhancing human development.