Impact of Economic Growth, Energy Consumption and Urbanization on Carbon Dioxide Emissions in the Kingdom of Saudi Arabia

Abstract

The Kingdom of Saudi Arabia has witnessed unprecedented economic growth in recent decades, propelling it onto the global stage. However, this rapid growth is often associated with a notable increase in carbon dioxide emissions, which carry significant environmental ramifications. In light of this pressing concern, this research undertakes a comprehensive examination of the intricate relationships between economic growth, energy consumption, urbanization, and carbon dioxide emissions within the Kingdom of Saudi Arabia from 1980 to 2020. This study employs autoregressive distributed lag approach to uncover the multifaceted dynamics at play. The empirical findings of the study reveal a compelling narrative about the Kingdom's natural landscape. Particularly noteworthy is the revelation that economic growth, urbanization, and energy consumption emerge as pivotal long-term drivers of escalating pollution. These findings underscore the critical necessity for policies that strike a balance between economic development and environmental preservation. Furthermore, the study disentangles the intricate web of causation among these factors. It becomes evident that economic growth and pollution exhibit bidirectional causality, illuminating the intricate connection between economic prosperity and environmental consequences. Additionally, commercial activities have been empirically shown to exert a substantial influence on pollution levels in the Kingdom of Saudi Arabia. To address these challenges, a pivotal shift towards a low-carbon technological revolution is proposed as a means of achieving sustained economic development. This transition towards environmentally friendly technologies holds the potential to decouple economic growth from environmental degradation, paving the way for a greener and more prosperous future for the Kingdom of Saudi Arabia.