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Exploring the Effects of Renewable Energy, Energy Consumption, and Industrial Growth on Saudi Arabia’s Environmental Footprint: An Autoregressive Distributed Lag Analysis

Author

Listed:
  • Mwahib Gasmelsied Ahmed Mohammed

    (Finance and Investment Department, Faculty of Business Administration, University of Tabuk, Tabuk 71491, Saudi Arabia)

  • Sufian Eltayeb Mohamed Abdel-Gadir

    (Department of Public Law, College of Law, Sultan Qaboos University, P.O. Box 50, Muscat 123, Oman)

  • Faizah Alsulami

    (Department of Accounting, Faculty of Business Administration, University of Tabuk, P.O. Box 741, Tabuk 71491, Saudi Arabia)

  • Sonia Mannai

    (Department of Finance and Investment, Faculty of Business Administration, University of Tabuk, P.O. Box 741, Tabuk 71491, Saudi Arabia)

  • Lamia Arfaoui

    (Department of Business Administration, Faculty of Business Administration, University of Bisha, P.O. Box 551, Bisha 61922, Saudi Arabia)

  • Khalid Alharbi

    (Department of Accounting, Faculty of Business Administration, University of Tabuk, P.O. Box 741, Tabuk 71491, Saudi Arabia)

  • Amal Abdulmajeed Qassim

    (Department of Management, Faculty of Business Administration, University of Tabuk, P.O. Box 47512, Tabuk 966, Saudi Arabia)

  • Mahmoud Mokhtar Alsafy

    (Department of Mechanical Industrial Engineering, College of Engineering, Sultan Qaboos University, P.O. Box 50, Muscat 123, Oman)

Abstract

This study explores the long-run relationship among the environmental footprint (EnF), renewable energy consumption, energy use, industrial growth, and urbanization in Saudi Arabia from 1990 to 2023, employing the Autoregressive Distributed Lag (ARDL) model, alongside Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR) for robustness checks. Results indicate a significant long-term relationship among the variables, with renewable energy adoption emerging as a crucial factor in reducing carbon emissions. The ARDL bounds test confirms the existence of cointegration, revealing the dynamic interplay among renewable energy, economic growth, and environmental sustainability. The findings show that renewable energy consumption significantly reduces the environmental footprint (CO 2 emissions), supporting Saudi Arabia’s Vision 2030 goals for economic diversification and sustainable development. However, industrial expansion, while critical for economic growth, still contributes to increased emissions, underscoring the need for further investment in clean technologies. The study also highlights the role of urbanization, which, while essential for development, poses challenges for environmental sustainability. Short-term dynamics, represented by the Error Correction Model, indicate a fast adjustment speed toward equilibrium, with deviations corrected by approximately 52% each period. The study offers valuable insights for policymakers aiming to balance industrial growth with environmental protection, emphasizing the need for strategic investments in renewable energy and energy efficiency. This research contributes to the understanding of energy–economy–environment interactions in oil-rich economies, providing a foundation for future studies to explore the impact of advanced technologies and policy interventions on sustainable development

Suggested Citation

  • Mwahib Gasmelsied Ahmed Mohammed & Sufian Eltayeb Mohamed Abdel-Gadir & Faizah Alsulami & Sonia Mannai & Lamia Arfaoui & Khalid Alharbi & Amal Abdulmajeed Qassim & Mahmoud Mokhtar Alsafy, 2024. "Exploring the Effects of Renewable Energy, Energy Consumption, and Industrial Growth on Saudi Arabia’s Environmental Footprint: An Autoregressive Distributed Lag Analysis," Energies, MDPI, vol. 17(24), pages 1-22, December.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:24:p:6327-:d:1544499
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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. Saad F. Al-Gahtani, 2024. "Saudi Arabia’s Journey toward a Renewable Future," Energies, MDPI, vol. 17(11), pages 1-19, May.
    3. Mehdi Abid, 2023. "How Does Renewable Energy Consumption Affect Environmental Quality in Saudi Arabia? Evidence from Quantile Regressions," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 574-578, July.
    4. Fahad Saleh Al-Ismail & Md Shafiul Alam & Md Shafiullah & Md Ismail Hossain & Syed Masiur Rahman, 2023. "Impacts of Renewable Energy Generation on Greenhouse Gas Emissions in Saudi Arabia: A Comprehensive Review," Sustainability, MDPI, vol. 15(6), pages 1-19, March.
    5. Jammazi, Rania & Aloui, Chaker, 2015. "Environment degradation, economic growth and energy consumption nexus: A wavelet-windowed cross correlation approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 110-125.
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