Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission

The Saudi economy is driven by the energy sector which mainly derived from petroleum-based resources. Besides export, the Kingdom's consumption of this resource showed a significant increase which linearly promoting CO2 emission increment. Therefore, it is essential to model the Kingdom's...

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Main Authors: Alsaedi, Marwan Abdullah, Abnisa, Faisal, Alaba, Peter Adeniyi, Farouk, Hamisu Umar
Format: Article
Published: Springer 2022
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Online Access:http://eprints.um.edu.my/43059/
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spelling my.um.eprints.430592023-09-06T04:28:08Z http://eprints.um.edu.my/43059/ Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission Alsaedi, Marwan Abdullah Abnisa, Faisal Alaba, Peter Adeniyi Farouk, Hamisu Umar GE Environmental Sciences The Saudi economy is driven by the energy sector which mainly derived from petroleum-based resources. Besides export, the Kingdom's consumption of this resource showed a significant increase which linearly promoting CO2 emission increment. Therefore, it is essential to model the Kingdom's energy consumption to estimate the profile of her future energy consumption. This work explores modelling and multi-step-ahead predictions for energy use, gross domestic product (GDP), and CO2 emissions in Saudi Arabia using previous data (1980-2018). The dynamic interrelationship of the variable's nexus was tested using the Granger causality and cointegration method in the short-run and long-run. In the long-run, the models reveal an inverted U-shape relation between CO2 emissions and GDP, validating Environmental Kuznets curve. When energy consumption is increased by 1%, there will be an increase in CO2 emissions by 0.592% at constant GDP, and when GDP is increased by 1%, there will be an increase in CO2 emissions by 0.282% at constant energy used. CO2 emissions appear to be both energy consumption and income elastic in Saudi Arabia in the long-run equilibrium. Granger causality based on vector error correction method reveals unidirectional causality from income to CO2 emissions, and bidirectional causality from CO2 emissions to energy consumption and vice versa in the short-run. In the long-run, bidirectional causality from income to CO2 emissions and vice versa and unidirectional causality from the used energy to CO2 emissions were observed. Also, there is a bidirectional causality from GDP to energy used and vice versa in the short-run, meaning that GDP and energy consumption are interdependent. Saudi Arabia needs to increase energy infrastructure investments and increase energy efficiency by implementing energy management policies, reducing environmental pollution, and preventing the negative effect on economic growth. GRAPHICS] . Springer 2022-05 Article PeerReviewed Alsaedi, Marwan Abdullah and Abnisa, Faisal and Alaba, Peter Adeniyi and Farouk, Hamisu Umar (2022) Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission. Clean Technologies and Environmental Policy, 24 (4, SI). pp. 1285-1300. ISSN 1618-954X, DOI https://doi.org/10.1007/s10098-021-02244-3 <https://doi.org/10.1007/s10098-021-02244-3>. 10.1007/s10098-021-02244-3
institution Universiti Malaya
building UM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaya
content_source UM Research Repository
url_provider http://eprints.um.edu.my/
topic GE Environmental Sciences
spellingShingle GE Environmental Sciences
Alsaedi, Marwan Abdullah
Abnisa, Faisal
Alaba, Peter Adeniyi
Farouk, Hamisu Umar
Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission
description The Saudi economy is driven by the energy sector which mainly derived from petroleum-based resources. Besides export, the Kingdom's consumption of this resource showed a significant increase which linearly promoting CO2 emission increment. Therefore, it is essential to model the Kingdom's energy consumption to estimate the profile of her future energy consumption. This work explores modelling and multi-step-ahead predictions for energy use, gross domestic product (GDP), and CO2 emissions in Saudi Arabia using previous data (1980-2018). The dynamic interrelationship of the variable's nexus was tested using the Granger causality and cointegration method in the short-run and long-run. In the long-run, the models reveal an inverted U-shape relation between CO2 emissions and GDP, validating Environmental Kuznets curve. When energy consumption is increased by 1%, there will be an increase in CO2 emissions by 0.592% at constant GDP, and when GDP is increased by 1%, there will be an increase in CO2 emissions by 0.282% at constant energy used. CO2 emissions appear to be both energy consumption and income elastic in Saudi Arabia in the long-run equilibrium. Granger causality based on vector error correction method reveals unidirectional causality from income to CO2 emissions, and bidirectional causality from CO2 emissions to energy consumption and vice versa in the short-run. In the long-run, bidirectional causality from income to CO2 emissions and vice versa and unidirectional causality from the used energy to CO2 emissions were observed. Also, there is a bidirectional causality from GDP to energy used and vice versa in the short-run, meaning that GDP and energy consumption are interdependent. Saudi Arabia needs to increase energy infrastructure investments and increase energy efficiency by implementing energy management policies, reducing environmental pollution, and preventing the negative effect on economic growth. GRAPHICS] .
format Article
author Alsaedi, Marwan Abdullah
Abnisa, Faisal
Alaba, Peter Adeniyi
Farouk, Hamisu Umar
author_facet Alsaedi, Marwan Abdullah
Abnisa, Faisal
Alaba, Peter Adeniyi
Farouk, Hamisu Umar
author_sort Alsaedi, Marwan Abdullah
title Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission
title_short Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission
title_full Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission
title_fullStr Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission
title_full_unstemmed Investigating the relevance of Environmental Kuznets curve hypothesis in Saudi Arabia: towards energy efficiency and minimal carbon dioxide emission
title_sort investigating the relevance of environmental kuznets curve hypothesis in saudi arabia: towards energy efficiency and minimal carbon dioxide emission
publisher Springer
publishDate 2022
url http://eprints.um.edu.my/43059/
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