Article

Determinants of environmental degradation in Saudi Arabia: exploring the unexplored

Authors:
  • COMSATS Institute of Information Technology, Abbottabad, Pakistan.
  • University of Southeast Norway
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Abstract

Purpose-Environmental degradation is recognized as a serious problem globally, and hence, Saudi Arabia is no exception. This paper aims to focus on the economy of Saudi Arabia to identify the determinants of environmental degradation. Design/methodology/approach-Time series data spanning from 1971 to 2014 is used and analyzed using the recently developed autoregressive distributed lag modeling approach. Findings-The obtained results reflected that natural resources, per person income and urbanization, have impacted environmental degradation both positively and significantly in the long run. Similarly, an insignificant negative relationship is established between trade openness and environmental degradation. Moreover, energy consumption has positively but insignificantly affected environmental degradation. In the short run, only per capita income has positively influenced environmental degradation while the rest of the variables have lost either significance levels or their direction of relationship has reversed. Originality/value-As this is a pioneering study on the economy of Saudi Arabia, therefore, the authors assume that policymakers will find the findings of the current study very useful while formulating and implementing policies to control environmental degradation.

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Purpose This study aims to examine the relationships between aggregated and disaggregated energy use in the industrial sector, carbon emissions and industrial output in China. Design/methodology/approach The study utilizes annual frequency data for the period of 1984-2015. The unit root properties of data are tested using augmented Dickey–Fuller and Phillips and Perron unit root tests. Furthermore, the Zivot–Andrew structural breaks unit root test is used to detect the structural breaks steaming into series. The autoregressive distributed lag bound test and newly developed Bayer–Hanck combined cointegration are used to check the existence of a cointegration relationship between underlying variables. Last, the direction of causality is determined applying vector error correction model (VECM) Granger causality. Findings The results confirm the existence of a long-run relationship in the presence of structural breaks. The authors conclude that aggregated and disaggregated energy consumption in the industrial sector increases CO2 emission in both long and short run. The VECM Granger causality analysis indicates the bidirectional relationships between CO2 emission, industrial growth and aggregated and disaggregated (coal, oil and natural gas) energy consumption. Research limitations/implications Based on the empirical results mentioned above, the study proposes the recommendation that China should focus on the use of natural gas in the industrial sector instead of coal and oil consumption. The most potent reasons for such a transformation are twofold: natural gas is much more environment-friendly, thus being a much lesser polluting source of energy, and, most significantly, such a change would have no adverse impact upon the output level. Originality/value This study contributes to the existing literature on estimating CO2 emission by using aggregated and disaggregated energy consumption in case of China. Notwithstanding, it also adds to the existing applied literature by using newly developed combined cointegration to confirm and substantiate the cointegration relationship between the underlying variables. Moreover, this study incorporates the role of structural breaks while investigating CO2 emission function, which helps in providing more valuable policy suggestions.
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Environmental concerns have recently taken centre stage in policy discussions around the globe due to the frequently observed impact of environmental degradation on socio-economic phenomena. Moreover, and to a large extent, many developed economies have managed to turn environmental challenges into profitable businesses rather than fee-based generation problems that constitute a burden and high cost for the economy. Through collaborations between public and private sectors, companies in those economies have been able to make environmental issues a core part of their business strategy.
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Urbanization and CO2 emissions trends are driven by worldwide economic development. Studies indicate a direct correlation between urbanization and CO2 emissions increases with both stimulating and inhibiting factors exhibited in the urbanization process and with periodic and regional characteristics exhibited with CO2 emission. The relationship between urbanization and CO2 emissions specifically in China from 1979 to 2013 is researched in this paper The novel points of this paper lies in utilizing a threshold mode to test periodic characteristics and analysis by regions. Results verify the effect of urbanization on CO2 emissions as: (1) emissions increase when threshold point 0.43 was surpassed; (2) emissions increase as residential income increases; (3) coefficients of urbanization on emissions increase initially and then decrease as a factor of increasing industry percentage in overall GDP; (4) patterns of threshold points vary geographically.
Purpose – This paper aims to establish a relationship between trade openness and economic growth in the context of the developing countries. This study has proposed a new measure of trade openness to the literature, as the available measures are flawed. Design/methodology/approach – Empirical analyses are carried out with the help of panel econometric techniques. Findings – The main finding of the paper is that the relationship between trade openness and economic growth is positive and statistically significant for developing countries. Besides trade openness, other determinants of economic growth such as investment and labour force are also significantly related with economic growth and carry expected coefficients. Further, it is found that frequent fluctuations in prices are detrimental to long-run economic growth. Practical implications – Therefore, the developing countries are suggested to speed up the process of trade liberalization and also pay favourable attention to other determinants of economic growth to achieve high economic growth. Originality/value – The authors have used a new measure of trade openness apart from the conventional trade volume measure of trade openness.
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The building sector in the Gulf Cooperation Council (GCC) region is experiencing a rapid expansion owing to factors like economic growth, burgeoning population and modernization. The GCC countries are amongst the highest in the world in terms of per capita energy consumption and environmental emissions. The growth in the building sector is therefore having adverse implications on their energy and environmental scenarios. The article reviews the building sector in the GCC region focusing on two of its most important countries: Kingdom of Saudi Arabia (KSA) and United Arab Emirates (UAE). In terms of ongoing investment in the building sector, population and size of economy, KSA and UAE have a collective share of 72%, 80% and 79% respectively in the entire GCC region. The article provides an insight into the policies and practices in the developed countries towards sustainable buildings. In order to drive their building sector towards a sustainable future, the present work recommends that given the wide ranging close ties between the GCC countries, European Union׳s joint action on sustainable development - as is reflected from the 20-20-20 target, a set of legal binding to seek: a 20% reduction in EU greenhouse gas emissions from 1990 levels; raising the share of EU energy consumption produced from renewable resources to 20%; a 20% improvement in the EU׳s energy efficiency - can be an interesting model to be considered.
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The experience of Saudi Arabia in environmental policies is relatively recent. However, the Government has established policy direction and administrative bodies to carry out its policy proposals. This endeavour to construct a framework for environmental policies has been hindered by several obstacles. The paper assesses government efforts in this field by reviewing environmental policy documents, the environmental administrative structure and the environmental decision-making process. A background of environmental policies and legislation is given in addition to categories of environmental agencies.
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We consider a nonstationary vector autoregressive process which is integrated of order 1, and generated by i.i.d. Gaussian errors. We then derive the maximum likelihood estimator of the space of cointegration vectors and the likelihood ratio test of the hypothesis that it has a given number of dimensions. Further we test linear hypotheses about the cointegration vectors.The asymptotic distribution of these test statistics are found and the first is described by a natural multivariate version of the usual test for unit root in an autoregressive process, and the other is a χ2 test.
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This article examines the long-run and short-run determinants of migration from Fiji to the United States between 1972 and 2001 using a human capital framework, which is extended to take account of political instability in Fiji. In the long-run the authors find that differences in income levels, disparities in police strength, disparities in the number of doctors, costs of moving, and political instability in Fiji are all statistically significant with the expected sign. In the short run the cost of moving, lagged migration, political instability, and differences in both police strength and medical care are the main determinants of Fiji-United States immigration. "("JEL "C22, F22)" Copyright 2006 Western Economic Association International.
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In this paper we test the Environment Kuznet's Curve (EKC) hypothesis for 43 developing countries. We suggest examining the EKC hypothesis based on the short- and long-run income elasticities; that is, if the long-run income elasticity is smaller than the short-run income elasticity then it is evident that a country has reduced carbon dioxide emissions as its income has increased. Our empirical analysis based on individual countries suggests that Jordan, Iraq, Kuwait, Yemen, Qatar, the UAE, Argentina, Mexico, Venezuela, Algeria, Kenya, Nigeria, Congo, Ghana, and South Africa--approximately 35 per cent of the sample--carbon dioxide emissions have fallen over the long run; that is, as these economies have grown emissions have fallen since the long-run income elasticity is smaller than the short-run elasticity. We also examine the EKC hypothesis for panels of countries constructed on the basis of regional location using the panel cointegration and the panel long-run estimation techniques. We find that only for the Middle Eastern and South Asian panels, the income elasticity in the long run is smaller than the short run, implying that carbon dioxide emission has fallen with a rise in income.
Article
This paper develops a new approach to the problem of testing the existence of a level relationship between a dependent variable and a set of regressors, when it is not known with certainty whether the underlying regressors are trend- or first-difference stationary. The proposed tests are based on standard F- and t-statistics used to test the significance of the lagged levels of the variables in a univariate equilibrium correction mechanism. The asymptotic distributions of these statistics are non-standard under the null hypothesis that there exists no level relationship, irrespective of whether the regressors are I(0) or I(1). Two sets of asymptotic critical values are provided: one when all regressors are purely I(1) and the other if they are all purely I(0). These two sets of critical values provide a band covering all possible classifications of the regressors into purely I(0), purely I(1) or mutually cointegrated. Accordingly, various bounds testing procedures are proposed. It is shown that the proposed tests are consistent, and their asymptotic distribution under the null and suitably defined local alternatives are derived. The empirical relevance of the bounds procedures is demonstrated by a re-examination of the earnings equation included in the UK Treasury macroeconometric model. Copyright © 2001 John Wiley & Sons, Ltd.
Article
In general, a reduction in trade barriers will affect the environment by expanding the scale of economic activity, by altering the composition of economic activity and by initiating a change in the techniques of production. We present empirical evidence to assess the relative magnitudes of these three effects as they apply to further trade liberalization in Mexico. We first use comparable measures of three air pollutants in a cross-section of urban areas located in 42 countries to study the relationship between air quality and economic growth. We find for two pollutants (sulphur dioxide and `smoke') that concentrations increase with per capita GDP at low levels of national income, but decrease with GDP growth at higher levels of income. We then study the determinants of the industry pattern of US imports from Mexico and of value added by Mexico's maquiladora sector. We investigate whether the size of pollution abatement costs in US industry influences the pattern of international trade and investment. Finally, we use the results from a computable general equilibrium model to study the likely compositional effect of a North American Free Trade Agreement (NAFTA) on pollution in Mexico.
Article
The relationship between cointegration and error correction models, first suggested by Granger, is here extended and used to develop estimation procedures, tests, and empirical examples. A vector of time series is said to be cointegrated with cointegrating vector a if each element is stationary only after differencing while linear combinations a8xt are themselves stationary. A representation theorem connects the moving average , autoregressive, and error correction representations for cointegrated systems. A simple but asymptotically efficient two-step estimator is proposed and applied. Tests for cointegration are suggested and examined by Monte Carlo simulation. A series of examples are presented. Copyright 1987 by The Econometric Society.
Environmental quality and its human health effects: a causal analysis for the EU-25
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