The faster growing energy consumption and urbanization are supporting economic growth but are contributing in the environmental degradation. The existing empirical literature has been remained silent on this serious issue in case of GCC countries. The present study captures these rectangular relationships amongst these variables in the GCC countries by using panel unit root and cointegration tests for a period 1980-2011. The study finds the first difference stationarity and existence of cointegration among the concerned variables. Further, urbanization has the positive impact on CO₂, energy consumption and economic growth. Economic growth has a positive impact on CO₂ and has a negative impact on energy consumption. Energy consumption has a positive impact on CO₂ and CO₂ has a positive impact on energy consumption and economic growth. The causality tests also confirm the direction of relationships in the most of GCC countries in the country-specific analysis. The results of the study suggest the urban planning and clean energy consumption to avoid the pollutant emissions and to achieve sustainable development for GCC countries in the long run.