This study examines the contribution of financial development to environmental degradation in Saudi Arabia in the period from 1971 to 2016, controlling the model for globalization and electricity consumption. The autoregressive distributive lag (ARDL) and vector error correction methods (VECM) are applied to the long-run and causal relationship, respectively. Empirical results indicate that financial development contributes to CO emissions and degrades environmental quality. The results also show that the role of globalization in environmental degradation is insignificant and that electricity consumption is the main culprit behind the growing CO emissions in Saudi Arabia. In addition, bidirectional causality exists between globalization and CO emissions in the long run, and financial development and CO emissions Granger-cause each other. Insights from the study help policymakers to understand the roles of financial development and globalization in environmental degradation and to comply with global mandate for the reduction of CO emissions.

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The energy sector has become the largest contributor to greenhouse gas (GHG) emissions. Among these GHG emissions, most threatening is CO emission which comes from the consumption of fossil fuels. This empirical work analyzes the roles of renewable energy consumption and non-renewable energy consumption in CO emissions in Pakistan. The empirical evidence is based on an auto-regressive distributive lag (ARDL) model of data from 1970 to 2016. The disaggregate analysis reveals that renewable energy consumption has an insignificant impact on CO emission in Pakistan and that, in the non-renewable energy model, natural gas and coal are the main contributors to the level of pollution in Pakistan. Economic growth positively contributes to CO emission in the renewable energy model but not in the non-renewable energy model. Policies that emphasize the contribution of renewable energy to economic growth and that add more clean energy into the energy mix are suggested.