CO2 Discharges, Consumption of Energy, and Growth of GDP in KSA

Abstract

In this study, we inspect the consequences of energy utilization and CO2 discharges on GDP growth in Kingdom of Saudi Arabia (KSA) during the period 1971–2014. The Granger causality test is employed to assess the short-run and long-run relationships among these variables. The result shows that a strong bi-directional association between utilization of energy and financial growth at the 5% level of significance in KSA. The other variables have independent relationships to each other. The results of our experiments clearly indicate that consumption of energy performs a noteworthy role in the basis of GDP growth in KSA. The Kingdom of Saudi Arabia could improve GDP growth by increasing energy consumption but reducing CO2 emissions.