• Energy Research

Abstract This paper studies the impact of oil price changes on economic growth in Saudi Arabia to measure its dependency on the crude oil sector. To this end, an On/Off threshold regression is specified to allow the oil/GDP relationship to be asymmetric, nonlinear, and time-varying with regard to the business cycle phases. Further, we empirically test the diversification hypothesis put forward by the National Transformation Program (Saudi Vision 2030) to check whether the equity-energy investment initiative could boost economic growth in Saudi Arabia. First, our findings confirm the contribution of the oil sector to economic growth in the country, but also show that the oil/Saudi economy relationship exhibits nonlinearity and threshold effects, as the impact of oil price varies per regime depending on the state of the market. Second, in line with the Vision 2030 expectations, we are in favor of transforming the economy and opening its equity market. We also quantify a positive and significant impact of equity investment on the Saudi Arabian economy. Further, this diversification route will stimulate a beneficial oil effect on the real economy.

Abstract This paper studies the impact of oil price changes on economic growth in Saudi Arabia to measure its dependency on the crude oil sector. To this end, an On/Off threshold regression is specified to allow the oil/GDP relationship to be asymmetric, nonlinear, and time-varying with regard to the business cycle phases. Further, we empirically test the diversification hypothesis put forward by the National Transformation Program (Saudi Vision 2030) to check whether the equity-energy investment initiative could boost economic growth in Saudi Arabia. First, our findings confirm the contribution of the oil sector to economic growth in the country, but also show that the oil/Saudi economy relationship exhibits nonlinearity and threshold effects, as the impact of oil price varies per regime depending on the state of the market. Second, in line with the Vision 2030 expectations, we are in favor of transforming the economy and opening its equity market. We also quantify a positive and significant impact of equity investment on the Saudi Arabian economy. Further, this diversification route will stimulate a beneficial oil effect on the real economy.

This paper analyzes the dynamics of CO2 emissions over the last decade for a large group of 25 European countries, an issue that is at the center of the ecological transition project involving various commitments (COP21, COP26, G20 meetings, etc.). To this end, our model measures the repercussions of energy price shocks (oil, gas, coal) for carbon emissions, as well as changes in industrial production and sustainable development in the context of the coronavirus pandemic. Using annual data for 23 EU countries, together with Russia and the UK, our findings show that CO2 emissions reacted significantly to oil and coal price shocks and vary with industrial production cycles. We quantified this reaction while computing the related elasticities. Further, while a significant reduction in CO2 emissions was observed during the COVID-19 pandemic, the stepping up of investment in sustainable development and renewable energy consumption also had a negative impact on CO2 emissions. This suggests that the key driver to reducing the risk of climate change and lowering high carbon dioxide (CO2) emissions involves significant commitment to sustainable development.

This paper analyzes the dynamics of CO2 emissions over the last decade for a large group of 25 European countries, an issue that is at the center of the ecological transition project involving various commitments (COP21, COP26, G20 meetings, etc.). To this end, our model measures the repercussions of energy price shocks (oil, gas, coal) for carbon emissions, as well as changes in industrial production and sustainable development in the context of the coronavirus pandemic. Using annual data for 23 EU countries, together with Russia and the UK, our findings show that CO2 emissions reacted significantly to oil and coal price shocks and vary with industrial production cycles. We quantified this reaction while computing the related elasticities. Further, while a significant reduction in CO2 emissions was observed during the COVID-19 pandemic, the stepping up of investment in sustainable development and renewable energy consumption also had a negative impact on CO2 emissions. This suggests that the key driver to reducing the risk of climate change and lowering high carbon dioxide (CO2) emissions involves significant commitment to sustainable development.