Sustainable energy development in Saudi Arabia

Abstract

The main objective of this research is to study the role of energy consumption in economic growth in Saudi Arabia over the period of 1971-2012 using the autoregressive distributed lag (ARDL) cointegration procedure, and based on neoclassical growth, endogenous growth, and ecological-economics viewpoints. Our empirical results show the existence of a cointegrating relationship between the different variables investigated. In addition, all the inputs (conventional and non-conventional) Granger cause economic growth in both the short and long runs. Our findings confirm the energy-led growth hypothesis in the case of Saudi Arabia. Hence, energy conservation policies may deteriorate economic growth in Saudi Arabia if they are not followed by measures that improve energy efficiency, energy saving technologies and encourage the investment and use of renewable energy sources such as solar and wind energies that can participate in the attenuation of climate changes.