The Effect Of Non-renewable Energy On Environmental Degradation (an Empirical Study On Saudi-arabia Over The Period 1971-2014 Using Ardl Model)

Résumé: Kingdom of Saudi Arabia is considered one of the most oil producing and exporting countries; and oil sector plays an essential role in the Kingdom’s economy. However, the kingdom’s reliance on oil production which is considered a non-renewable energy source may lead to an environmental damage. Given this situation, the country is facing a major environmental challenge as an environmental quality has become a requirement for sustainable development. This study investigated the effect of non-renewable energy consumption on environmental degradation in the case of Saudi Arabia. We used oil energy use as a proxy for non-renewable energy and carbon dioxide emissions as a proxy for environmental degradation. Applying autoregressive distributed lag (ARDL) approach on the data spanning from 1971 to 2014, the long run relationship among the selected variables is confirmed, and the results indicated that the non-renewable energy increase environmental degradation in the short run as well as in the long run. However, the long run impact is smaller than the short run impact. Furthermore, the findings confirmed the environment Kuznets curve (EKC) hypothesis which suggests economic growth initially leads to deterioration of the environment, but after some turning point, the level of environmental degradation reduces. Following Narayan (2010) we suggest examining (EKC) hypothesis based on the short and the long run income elasticity ; that is, if the long run elasticity is smaller than the short run income elasticity then it is evident that a country has reduced carbon dioxide emission as its income has increased . Moreover, the results also showed that reducing oil production level leads to improve environmental quality. These findings suggest that Saudi-Arabia should invest in renewable energy and reduce its non-renewable energy dependency in order to improve its environmental quality. It is advisable that kingdom of Saudi Arabia should decrease its dependency on oil production and promote the use of renewable resources in order to obtain the sustainable energy, especially as developed countries are racing towards the goals of sustainable development.

Publié dans la revue: