Assessing the Impact of the Recent Unprecedented World Events on the Economic and Environmental Conditions of Saudi Arabia

Abstract

This study quantitatively analyses the impacts that recent unprecedent events have had on the Saudi economy and environment using the Global Trade Analysis Project (GTAP) model. These events include: the global outbreak of COVID-19 and the associated disruption to the global supply chain, the alarming rate of climate change, and various political conflicts. These events have affected global food and energy prices. The results of this study revealed a decline in Saudi GDP, household income, purchase ability, and welfare. A trade deficit was indicated in the Saudi trade balance because of higher food prices and a reduction in two of the main Saudi exports (oil and petroleum products). A decrease in the output of most Saudi industries was shown, despite the increase in exports for most sectors. This was because of the reduction in Saudi households’ domestic consumption. Regarding the environmental impact, the Input–Output Life Cycle Assessment (IO-LCA) approach was used to estimate the total CO2 emissions of the Saudi economy. In total, approximately 740.6 million metric tons of CO2 emissions were estimated. By using a recently published specific carbon intensity for Saudi oil, total Saudi CO2 emissions were 24.59% less than the non-specific measure.