Assessing the Link between Environmental Quality, Green Finance, Health Expenditure, Renewable Energy, and Technology Innovation

Abstract

This study uses data from 1980 to 2020 to analyze the explanatory power of renewable energy (RE), green finance (GF), and public health expenditure (PUHE) for environmental quality (ecological footprint: EF) in the Kingdom of Saudi Arabia (KSA). In order to examine the long- and short-term effects, we ran both linear autoregressive distribution (ARDL) and nonlinear autoregressive distribution (NARDL) models. The empirical results showed that, when estimating the ARDL model, all variables have an impact on the environment’s long-term quality, which has increased. Furthermore, the NARDL model supports the existence of significant positive or negative shocks that support an unbalanced relationship with the movement of variables over the short and long term. Overall, the study demonstrates the critical role of factors that can enhance the environment in the KSA setting. In light of this, we advise policymakers to encourage the use of additional renewable energy sources and to expedite their efforts to do so in order to slow down environmental damage.