How growth, urbanization, and energy consumption affect CO2 emissions in Saudi Arabia (1970–2020)? An ARDL and NARDL approach to investigate the eco-environmental challenge

Abstract

Reconciling economic growth with environmental sustainability is a pressing challenge for resource-dependent economies such as Saudi Arabia. This study analyzes five decades (1970–2020) of data, applying ARDL and NARDL models to evaluate the relationship between economic growth and carbon emissions. Key findings reveal that oil-driven growth intensifies emissions, with an elasticity of 1.34 in the long term, while non-oil activities reduce emissions by 0.86 %. Positive energy consumption shocks amplify emissions by 1.87 %, whereas efficiency gains reduce them by 1.00 %. Urbanization shows mixed effects: increasing emissions in the short term but contributing to sustainability in the long term with proper urban planning. Policy recommendations include accelerating renewable energy projects like solar and wind initiatives, promoting compact urban designs, and expanding energy storage infrastructure to stabilize renewable energy systems. The study also underscores the importance of economic diversification, public awareness campaigns for energy-saving practices, and leveraging international collaborations to achieve meaningful decoupling. These findings align with Saudi Arabia's Vision 2030 and provide actionable insights for integrating sustainability into economic strategies.