The Impact of Renewable Energy development on Saudi Arabia’s Economic Growth

Abstract

The objective of this study is to identify the impact of renewable energy consumption on economic growth in Saudi Arabia. In this study we used quantitative approach with autoregressive distributed lags bound test for cointegration, and a related error correction model to analyze the data. The data collected from the World Bank covering the period of 1990-2021. An analysis of the study used a set of variables, in which Renewable energy consumption, Carbon Dioxide emission and trade consider as independent variable and the dependent variable is GDP per capita. The result showed that renewable energy consumption has an adverse and insignificant impact on economic growth in Saudi Arabia in the short test relationship. In the long run, however, it has a positive statistically significant effect on the economic growth. The current study suggests modification of the regulations governing renewable energy sources in order to achieve significant and favourable short-term economic growth. Additionally, the Kingdom of Saudi Arabia Vision Plan 2030 will continue to be implemented, and through it, the National Renewable Energy Program will effectively support the Kingdom's economy, develop its human resources, and encourage investments from both international and domestic businesses.