Energy Transition and the Pathway to Sustainability in Saudi Arabia

Abstract

This study aims to shed light on the energy transition model and the chances to move towards a sustainable development pathway in Saudi Arabia and achieve the Kingdom's Vision in decoupling economic growth from carbon dioxide emissions. The study employs the descriptive statistical approach to assess renewable energy and energy efficiency landscape in the Saudi Arabia, as well as the econometric approach to estimate the relationship between economic growth, energy consumption and Co2 emissions in Saudi Arabia during the period (1980-2022). The study found that the energy transition program enjoys significant policy and legislative position in the country under the guidance of His Highness Prince Mohammed bin Salman. The study also found that the progress made in the energy transition in the Kingdom is still modest compared to Arab countries and worldwide, despite the enormous potential that the country abounds with. Results of the econometric estimation showed that the relationship between economic growth and carbon dioxide emissions is U-shaped, indicating that the environmental Kuznets curve hypothesis (EKC) does not hold for Saudi Arabia. Results of the econometric analysis also revealed that energy consumption has a negative impact on environmental quality in Saudi Arabia. The study concludes with several recommendations, the most important of which is that achieving the goal of the Kingdom’s vision in decoupling economic growth from CO2 emissions requires continuing to promote investments in energy efficiency measures and a circular carbon economy.