The nexus of carbon dioxide emissions, economic growth, and urbanization in Saudi Arabia

Abstract

Saudi Arabia has implemented its ambitious and comprehensive national strategy, i.e., Saudi Vision 2030, to achieve major economic, social, and environmental objectives. The main aim of this paper is to study the Granger causality relationships between economic growth, environmental degradation, and urbanization in Saudi Arabia over the period from 1985 to 2019. At first, Augmented Dicky-Fuller (ADF) and Phillips-Perron (PP) tests were applied in order to check the stationarity of the panel time-series data. Since the data were of mixed order of integration I(0) and I(1), the Autoregressive Distributed Lag (ARDL) framework was employed to perform the statistical analysis. Then, the short- and long-run relationships were evaluated using the bounds test for cointegration applied on the Error Correction Models (ECMs) for GDP, CO2 emissions, and urbanization as the dependent variables. Furthermore, the direction and significance of causality were estimated in the ARDL/ECM framework. In addition, the Environmental Kuznets Curve (EKC) hypothesis was examined for the sample data. To assess the generalization capability of the findings in this study, robustness and diagnostic tests were applied. In the long-run, the empirical findings indicate that 1% increase in economic growth Granger caused 0.15% increase in CO2 emissions and 0.006% decrease in urbanization. Whereas 1% increase in urbanization Granger caused 2.5% increase in the economic growth. In the short-run, a unidirectional causal relationship existed from economic growth to both CO2 emissions and urbanization with 1% increase in GDP Granger caused 0.3% and 0.004% increases in CO2 emissions and urbanization, respectively. Finally, policy recommendations were presented in light of the Saudi Vision 2030.

Effects of social and economic development on CO2 emission in the countries of the Visegrad group

“…In the paper, the authors also provided a comprehensive summary of existing empirical studies in this area. A similar study and analysis was conducted by Alajlan and Alreshaidi (2022). Abid et.…”

The Impact Of Islamic Finance, Economic Growth, And Globalization On CO2 Emissions

“…For example, research in 17 Asia-Pacific countries from 1960 to 2020 showed that economic growth harmed the environment, increasing CO2 emissions (Rahman & Alam, 2022). Then, research took place in Saudi Arabia from 1985 to 2019, resulting in economic growth that contributed to increasing CO2 emissions (Alajlan & Alreshaidi, 2022). This is because economic growth in the four countries during the period of 2015-2020 experienced an increase in energy consumption: as the economy grows, energy consumption tends to rise.…”

Relationships between economic development and resident environmental behavior and participation in areas with different economic and similar natural and cultural conditions

“…These studies examined behaviors from the perspective of environmental significant behavior (Stern 2000), public participation (Zhang et al 2022), environmental responsibility (Magnier and Schoormans 2015), and pro-environment action (Su et al 2018) for constructing ecological civilization and realizing sustainable development. (Kuznet 1995) raised an environment Kuznets curve (EKC) model which has produced extensive influences in worldwide researches of environmental management (Panayotou 1993, Usama et al 2015, Naif and Amirah 2022. However, many researchers have found that the EKC model was not universal and there would be other factors besides economic growth that influence on environment pollution (Pearson 1994, De Bruyn et al 1998, Wagner 2015, Sanchez and Stern 2016.…”