Implications of Transition towards Manufacturing on the Environment: Saudi Arabia’s Vision 2030 Context

Nasreen Alfantookh, Yousif Osman () and Isam Ellaythey
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Nasreen Alfantookh: Department of Economics, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia
Yousif Osman: Department of Economics, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia
Isam Ellaythey: Department of Economics, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia

JRFM, 2023, vol. 16, issue 1, 1-13

Abstract: This study is based on the idea that Saudi Arabia’s Vision 2030 considered the achievement of economic diversification is very crucial for the economy. In turn, this target requires a sustained increase in the contribution of the manufacturing sector in Gross Domestic Product (GDP). At the same time, the transition towards industrialization might trigger high rates of CO 2 emissions, due to the escalated manufacturing demand for primary energy consumption (specifically fossil fuel). Ultimately, the high rates of CO 2 emissions would have severe environmental consequences, such as environmental degradation. These environmental consequences might be more dangerous in a country extensively dependent on oil, such as Saudi Arabia. The study aims to investigate the manufacturing and environment nexus in an attempt to explore the validity of the inverted U-shaped curve, the so-called Kuznets hypothesis, during 1971–2021. Applying the econometric model autoregressive distributed lag (ARDL), the findings of the study do not show evidence supporting the validity of an inverted U-shaped Kuznets function in Saudi Arabia during the period of the study. Furthermore, the short-term results do not confirm the impact of increasing manufacturing on CO 2 emissions. However, there are indications of positive effects, although limited, in the long-term.

Keywords: manufacturing; environmental Kuznets curve; ARDL; Saudi Arabia’s Vision 2030 (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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