Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia

This study extends previous environmental sustainability literature by investigating the joint impact of economic growth and renewable energy on reducing CO<sub>2</sub> emissions in Saudi Arabia over the period 1990–2016. Using the fully modified ordinary least-square (FMOLS) and dynamic...

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Main Authors: Montassar Kahia, Anis Omri, Bilel Jarraya
Format: Article
Language:English
Published: MDPI AG 2021-12-01
Series:Sustainability
Subjects:
Online Access:https://www.mdpi.com/2071-1050/13/1/180
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spelling doaj-a603cfd9b9084d29a23a93534dae7e512020-12-28T00:00:59ZengMDPI AGSustainability2071-10502021-12-011318018010.3390/su13010180Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi ArabiaMontassar Kahia0Anis Omri1Bilel Jarraya2Department of Economics and Finance, College of Business and Economics, Qassim University, P.O. Box 6640, Buraidah 51452, Qassim, Saudi ArabiaDepartment of Business Administration, College of Business and Economics, Qassim University, P.O. Box 6640, Buraidah 51452, Qassim, Saudi ArabiaDepartment of Accounting, College of Business and Economics, Qassim University, P.O. Box 6640, Buraidah 51452, Qassim, Saudi ArabiaThis study extends previous environmental sustainability literature by investigating the joint impact of economic growth and renewable energy on reducing CO<sub>2</sub> emissions in Saudi Arabia over the period 1990–2016. Using the fully modified ordinary least-square (FMOLS) and dynamic ordinary least-square DOLS estimators, we find that economic growth increases CO<sub>2</sub> emissions in all estimated models. Moreover, the validity of the environmental Kuznets curve (EKC) hypothesis is only supported for CO<sub>2</sub> emissions from liquid fuel consumption. The invalidity of the EKC hypothesis in the most commonly used models implies that economic growth alone is not sufficient to enhance environmental quality. Renewable energy is found to have a weak influence on reducing the indicators of environmental degradation. We also find that the joint impact of renewable energy consumption and economic growth on the indicators of CO<sub>2</sub> emissions is negative and insignificant for all the estimated models, meaning that the level of renewable energy consumption in Saudi Arabia is not sufficient to moderate the negative effect of economic growth on environmental quality. Implications for policy are also discussed.https://www.mdpi.com/2071-1050/13/1/180environmental qualityeconomic growthCO<sub>2</sub> emissionsSaudi Arabia
collection DOAJ
language English
format Article
sources DOAJ
author Montassar Kahia
Anis Omri
Bilel Jarraya
spellingShingle Montassar Kahia
Anis Omri
Bilel Jarraya
Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia
Sustainability
environmental quality
economic growth
CO<sub>2</sub> emissions
Saudi Arabia
author_facet Montassar Kahia
Anis Omri
Bilel Jarraya
author_sort Montassar Kahia
title Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia
title_short Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia
title_full Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia
title_fullStr Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia
title_full_unstemmed Does Green Energy Complement Economic Growth for Achieving Environmental Sustainability? Evidence from Saudi Arabia
title_sort does green energy complement economic growth for achieving environmental sustainability? evidence from saudi arabia
publisher MDPI AG
series Sustainability
issn 2071-1050
publishDate 2021-12-01
description This study extends previous environmental sustainability literature by investigating the joint impact of economic growth and renewable energy on reducing CO<sub>2</sub> emissions in Saudi Arabia over the period 1990–2016. Using the fully modified ordinary least-square (FMOLS) and dynamic ordinary least-square DOLS estimators, we find that economic growth increases CO<sub>2</sub> emissions in all estimated models. Moreover, the validity of the environmental Kuznets curve (EKC) hypothesis is only supported for CO<sub>2</sub> emissions from liquid fuel consumption. The invalidity of the EKC hypothesis in the most commonly used models implies that economic growth alone is not sufficient to enhance environmental quality. Renewable energy is found to have a weak influence on reducing the indicators of environmental degradation. We also find that the joint impact of renewable energy consumption and economic growth on the indicators of CO<sub>2</sub> emissions is negative and insignificant for all the estimated models, meaning that the level of renewable energy consumption in Saudi Arabia is not sufficient to moderate the negative effect of economic growth on environmental quality. Implications for policy are also discussed.
topic environmental quality
economic growth
CO<sub>2</sub> emissions
Saudi Arabia
url https://www.mdpi.com/2071-1050/13/1/180
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AT bileljarraya doesgreenenergycomplementeconomicgrowthforachievingenvironmentalsustainabilityevidencefromsaudiarabia
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