Export diversification, energy consumption, economic growth and environmental degradation: evidence from Oman

Export diversification's role in reducing environmental degradation, especially in oil-dependent countries, has been overlooked. This study investigated the effect of export diversification, along with energy consumption and economic growth as important control variables, on CO₂ emissions and ecological footprint in Oman from 1984 to 2014 by employing the Autoregressive Distributed Lag (ARDL) model. To ensure the stability of the model, robust long-run relationship estimators including Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) were used. The results suggest that export diversification has a positive impact on Oman's environmental degradation. A positive effect of energy on both environmental indicators was found, with a lower effect on CO₂ emissions. Diversification of exports is strongly recommended in Oman by shifting to more energy-efficient, environmentally friendly, and high-tech industries.