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Investigating the Impact of Energy Consumption and Economic Activities on CO 2 Emissions from Transport in Saudi Arabia

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  • Abdullah Al Shammre

    (Economics Department, College of Business Administration, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

Abstract

This study examines the relationships between CO 2 emissions, gross domestic product (GDP), financial development, energy export, sustainable power, unsustainable power depletion, and commercial growth in the Kingdom of Saudi Arabia (KSA) from 1990 to 2022 by using the auto-regressive distributed lag (ARDL) approach and the vector error correction model (VECM) approach. In the first step, we have used tests such as the augmented Dickey–Fuller (ADF) test and the Dickey–Fuller generalized least squares (DF-GLS) to capture the order of integration of the variables, and the results show that all the variables are stationary in regard to the first difference. In the second step, we have applied the examination of bounds in order to validate the presence of long-term cointegration relationships between the variables. The results of the ARDL approach show that financial development, sustainable energy, and commercial openness have a negative impact on CO 2 emissions. However, GDP, energy export, and unsustainable energy lead to an increase in environmental degradation. Finally, the Granger causality test shows mixed causality relationship among the variables. Accordingly, governments should encourage the development and use of sustainable energy alternatives, such as solar power, wind power, and hydroelectric power, through incentives and subsidies, in addition to conducting new research concerning the topic and starting new initiatives. Protecting and expanding green areas is crucial to mitigate CO 2 emissions, and strategies for transitioning to cleaner energy alternatives should be developed. Additionally, facilitating the transfer of sustainable energy technologies and promoting collaboration in research and development can accelerate the adoption of clean energy solutions. These policy actions can contribute to reducing CO 2 levels, as well as promoting sustainable energy practices in the country.

Suggested Citation

  • Abdullah Al Shammre, 2024. "Investigating the Impact of Energy Consumption and Economic Activities on CO 2 Emissions from Transport in Saudi Arabia," Energies, MDPI, vol. 17(17), pages 1-12, September.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:17:p:4448-:d:1471558
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    References listed on IDEAS

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    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Jean Pierre Namahoro & Qiaosheng Wu & Haijun Xiao & Na Zhou, 2021. "The Impact of Renewable Energy, Economic and Population Growth on CO 2 Emissions in the East African Region: Evidence from Common Correlated Effect Means Group and Asymmetric Analysis," Energies, MDPI, vol. 14(2), pages 1-21, January.
    3. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    4. Adeola Akinpelu & Md Shafiul Alam & Md Shafiullah & Syed Masiur Rahman & Fahad Saleh Al-Ismail, 2023. "Greenhouse Gas Emission Dynamics of Saudi Arabia: Potential of Hydrogen Fuel for Emission Footprint Reduction," Sustainability, MDPI, vol. 15(7), pages 1-14, March.
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