Implications of Energy Consumption by Sector on Carbon Emissions in Saudi Arabia

Abstract

The increasing global focus on sustainable development has attracted significant attention towards environmental issues. A crucial aspect of this emphasis is the aim to decrease energy consumption in order to minimize damage to the environment. However, discussions surrounding this subject have raised concerns. Sustainable development has gained considerable recognition among economists and policymakers due to its potential impact on productivity. Previous research primarily concentrated on overall energy consumption rather than analyzing specific sectors' energy usage and its effects on CO2 emissions. Particularly, there has been a lack of extensive research on the relationship between energy usage in sectors such as agriculture and transportation, and the resulting emission of CO2. Therefore, this study seeks to examine the impact of energy usage in Saudi Arabia's transportation, industrial, and agricultural sectors on CO2 emissions from 1979 to 2022. To analyze this correlation, the study utilizes the Autoregressive Distributed Lag (ARDL) technique. The findings indicate that the transportation sector has a greater influence on CO2 emissions compared to the industrial sector. Conversely, energy usage in the agricultural sector is found to contribute to a reduction in CO2 emissions. Informed by these findings, policymakers can implement policy interventions and measures to address the negative health effects resulting from environmental degradation. By targeting sectors identified as major contributors to environmental problems, strategies can be implemented to mitigate pollution, decrease exposure to harmful substances, and promote sustainable practices.