URBANIZATION, OIL PRICE AND POLLUTION IN SAUDI ARABIA

Haider Mahmood,Maham Furqa,Tarek Tawfik Yousef Alkhateeb,Zafrul Allam,Nawaz Ahmad,Maleeha Mohammed Zaaf Al-Qahtani

doi:10.32479/ijeep.8914

Abstract

Urbanization and income are usually supported by oil prices and revenues in the oil abundant countries. But, the environmental effect of urbanization and oil prices should not be ignored to ensure the sustainable growth of oil abundant economies. We investigate the role of urbanization and oil prices on the CO 2 emissions per capita of Saudi Arabia using a period 1980-2014 and cointegration test. Urbanization has positive on the CO 2 emissions per capita. So, a rapid and continues increasing urbanization throughout the sample period is found responsible for degrading the environment. Moreover, the oil price is also found responsible for increasing CO 2 emissions in the long run but its effects are found insignificant in the short run. We recommend the Saudi economy to diversify from the oil sector to ensure clean environment. Keywords: CO 2 emissions, Oil prices, Urbanization, Cointegration JEL Classifications: Q53, P25, Q34 DOI: https://doi.org/10.32479/ijeep.8914

Highlights

Economic growth and urbanization have a strong role to play in the environment and CO2 emissions condition in a country
The idea of urbanization leading to CO2 emissions can be justified through many reasons, but one of the most obvious connections is through energy consumption due to population concentration in an urban area
Saudi Arabia has been gone through rapid urbanization in the past decades and oil income is a significant part of the total income of the Kingdom

Summary

INTRODUCTION

Economic growth and urbanization have a strong role to play in the environment and CO2 emissions condition in a country. During increasing oil prices and urbanization, pollution should be considered as one of the most alarming problems for any oil-exporting country with such mentioned accelerated economic growth. Urbanization may play a negative role in polluting the environment due to higher energy consumption for a better standard of living in urban areas. Oil-exporting country like Saudi Arabia is expected to be victim of environmental problem due to heavy oil production, low domestic energy prices and higher domestic oil consumption. The magnitude of the environmental problem from these proposed factors is important for policy framing This present study is highly motivated to explore belongings of urbanization and oil price to the pollution emissions in Saudi Arabia using a sample range of 1980-2014 dataset to propose a comprehensive policy to overcome the environmental problem

LITERATURE REVIEW

RESEARCH METHODOLOGY

DATA ANALYSES AND DISCUSSIONS

Findings

CONCLUSIONS AND IMPLICATIONS