Natural resource extraction, energy efficiency moderation, and sustainable development in the Gulf Cooperation Council countries

Abstract

Social development plays a crucial role in shaping societies, enhancing the overall quality of life, addressing social challenges, strengthening social structures, boosting economic performance, improving human resource skills, stimulating creative solutions, and creating sustainable development. The Social Progress Index (SPI) encompasses all these characteristics. The aim of this research is to investigate the effect of natural resource extraction on social development in a quadratic manner across Gulf Cooperation Council (GCC) countries from 2011 to 2023. We use energy efficiency as a social development factor and a moderator of the relationship between natural resource consumption and sustainable social development. Previous studies have hardly linked these dynamics to each other, and none have focused on GCC countries. Assessing the quadratic relationship contributes to understanding the nonlinear relationships between the variables, determining how the impacts can vary in strength or direction at different levels of the variables. To this end, we employ Bayesian regression. The empirical outcomes show that the link between natural resource extraction and social development follows a U-shaped curve. Energy efficiency improves sustainable social development and increases natural resource sustainability. We also use several control variables, including population density and technological innovation, with both factors showing a positive impact on social development. Based on these results, this study suggests establishing a comprehensive program to invest in environmental technologies that reduce energy use and improve energy efficiency. The details of this program were discussed in depth.