International Journal of Sustainable Development and

Planning
Vol., No., Month, Year, pp. **-**
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Greening the Cityscape: Strategies for Sustainable Urbanization, Low Carbon Emissions,
and Robust Economic Growth
Amira Houaneb 1* , Uzma Khan2 , Aarif Mohammad Khan3
1
Prince Sattam Bin Abdulaziz University, College of Business Administration, Al-kharj, KSA11942 Email:
[Link]@[Link]; [Link]@[Link] ORCID: 0000-0002-7790-8944
2
Prince Sattam Bin Abdulaziz University, College of Business Administration, Al-kharj, KSA 11942 Email:
uzmakhanafridi@[Link]; [Link]@[Link] ORCID: 0000-0002-7248-090X
3
Aligarh Muslim University, Aligarh, India 202002 Email: khanaarifeco@[Link] ORCID: 0000-0002-7190-6518

Corresponding Author Email: [Link]@[Link]

Copyright: ©2024 The author(s). This article is published by IIETA and is licensed under the CC BY 4.0 license
([Link]

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ABSTRACT
[Link]

Received: This study thoroughly investigates the intricate association concerning urbanization, energy
Revised: consumption, carbon emissions, and economic growth in Saudi Arabia from 1968 to 2022.
Accepted: Using advanced econometric models and time-series data analysis, we reveal a complex
association in which economic growth and urbanization influence energy consumption,
Available online:
leading to increased carbon emissions. The adjustment coefficients for this relationship are
estimated to be 0.16%. The causality test findings revealed the existence of both
Keywords: unidirectional and bidirectional causality. Urbanization has a direct impact on both energy
Carbon emissions, Economic Growth, consumption and carbon emissions. In turn, carbon emissions affect both energy use and
Energy consumption, VECM, Al-Kharj economic growth. Ultimately, carbon emissions influence both energy consumption and
economic growth. Our results highlight the urgent need for strategies to reduce carbon
emissions by implementing sustainable energy practices, urban planning, and legislative
measures. These implications for sustainable development are crucial for Saudi Arabia and
offer a structure for other rapidly urbanizing nations dealing with comparable difficulties.
Given the potential for change, policymakers must carefully consider and implement these
results.

1. INTRODUCTION densely populated areas in developed and developing nations, where

green space is often a scarce resource.
The United Nations' 2030 Agenda now includes the role of urban One of the most pressing issues of our time is global climate change,
areas in sustainable development for the first time in their primarily driven by the alarming concentrations of greenhouse gases
Sustainable Development Goal 11, which focuses explicitly on cities (GHGs) in the atmosphere, a direct result of human activities such
and human settlements, emphasizing their need to be inclusive, safe, as burning coal and fossil fuels. The scientific community has
resilient, and sustainable. The New Urban Agenda [1] also extensively studied this issue, and the findings are alarming. The
highlights urbanization as a catalyst for sustained and inclusive continuous increase in carbon dioxide emissions is projected to
economic growth, social and cultural development, and profoundly impact the global climate system, potentially leading to
environmental protection. It also emphasizes the potential of catastrophic outcomes that will affect every aspect of our lives. The
urbanization to significantly contribute to achieving transformative international community has prioritized reducing carbon emissions
and sustainable development, inspiring us with the possibilities. and enhancing environmental quality to avert this crisis.
Globally, urban regions are grappling with carbon emissions and According to Alam [3], energy is not just a resource but also the
sustainability challenges. On a global scale, cities are responsible for primary force behind all economic activities. Ojinnaka's [4] study
approximately 75% of worldwide energy usage and 70% of global further supports this, presenting substantial evidence that per capita
emissions of greenhouse gases. Urbanization has been responsible energy consumption is a meaningful predictor of economic growth.
for around 10% of the rise in global emissions since 2015, according However, the challenge lies in maintaining a steady energy supply
to the International Energy Agency [2]. However, this is not a time and using it responsibly for sustainable growth. This is an urgent
for despair but for action. Green techniques in urban development problem that needs to be addressed. Research indicates densely
have emerged as a beacon of hope and a critical strategy for populated countries like China and India significantly increase
addressing these complex issues. Implementing sustainable urban carbon emissions to improve economies, raise national incomes, and
greening initiatives is the key to reducing the environmental impact lessen poverty.
of cities. These initiatives not only enhance living conditions and The Kingdom of Saudi Arabia has taken a proactive stance by
support ecosystem services but also offer a glimmer of hope for accepting several international agreements, such as the Paris
Agreement and the Kyoto Protocol, to combat climate change and Murshed et al. [8] postulated that accelerated economic
reduce carbon emissions. The potential for environmental harm expansion, increased global trade, and urbanization were
underscores the urgency of this action if the functional affinity causally linked to elevated levels of carbon dioxide
between natural resources and contemporary evolutionary processes
emissions. Khan et al. [9] studied the G7 and E7 nations,
is not managed effectively. This is a particularly pressing issue in
Middle Eastern nations like Saudi Arabia, where economic
examining the relationship between economic growth and
expansion, energy security, urbanization, tourism, and population size. It was discovered that economic expansion
environmental sustainability are crucial. and population size had a detrimental effect on environmental
Developing a more environmentally friendly cityscape is a quality by reducing the 'load capacity factor levels'. This term
multifaceted challenge that demands an all-encompassing strategy. refers to the ecosystem's ability to sustain a specific level of
By adopting green policies, cities can construct more resilient, economic activity without causing harm to the environment.
liveable, and ecologically sustainable urban environments that In the G7 and E7 nations, there is a unidirectional
promote both the long-term sustainability of the planet and the well- relationship between economic growth, population size, and
being of its inhabitants. This comprehensive approach is both a
the load capacity factor. A 1% increase in energy efficiency
choice and a necessity in our quest for a sustainable future.
Urban greening strategies, a topic of significant interest in the resulted in a 0.3% long-term increase in carbon productivity,
context of sustainable urbanization, low carbon emissions, and according to a study by Murshed et al. [10] in seven
robust economic growth, require a comprehensive approach. developing countries between 2007 and 2018. In addition, the
Integrating these green practices into urban development is crucial analysis indicated that improvements in energy efficiency
for enhancing the quality of life, promoting ecosystem services, and counterbalance the substantial negative impacts on carbon
mitigating city environmental impacts. The initiatives, which production caused by financial inclusion, trade globalization,
involve preserving and creating green spaces, promoting and urbanization in the nations analyzed.
biodiversity, and implementing innovative technologies, can Energy is an essential factor in the economic development of
enhance urban resilience and economic prosperity. By prioritizing
low-carbon development, cities can reduce their carbon footprint
every country. The future expansion of the economy relies on
and contribute to global climate goals. The role of green the sustained accessibility of cost-effective energy derived
infrastructure, tree conservation, and innovative greening from environmentally sustainable sources. Baz et al. [11]
technologies in reducing carbon emissions and fostering health, established a clear correlation between higher energy usage
community well-being, and economic productivity within urban and a decline in environmental quality. The increased
environments cannot be overstated. Therefore, to close our research utilization of fossil fuels generates carbon dioxide,
gap, despite the growing attention towards sustainable urban contributing to global warming and drastically degrading air
development, more research is still needed regarding the complex quality. Consequently, the effort to supply additional energy
interplay between greening the cityscape, achieving low carbon
to enhance economic development has heightened the
emissions, and fostering robust economic growth. While individual
aspects of this triad have received some attention, comprehensive likelihood of environmental contamination, particularly in the
studies are crucial in bridging the gaps in knowledge and exploring state of the air, increased respiratory ailments and other
integrated strategies. Many existing studies focus on isolated health concerns. Raihan et al. [12] contend that energy
elements such as green infrastructure or carbon reduction, often consumption presents a significant obstacle to attaining
overlooking the intricate connections that bind sustainable environmental sustainability, primarily due to the release of
urbanization and economic prosperity. Holistic examinations that greenhouse gases from non-renewable energy sources.
consider the synergies and trade-offs in implementing environmental Hence, reductions linked to energy usage are recommended
sustainability and economic development strategies are necessary to amid the current discussion on sustainability. This reduction
address this research gap. Our study is vital to informing policy
is crucial for furthering the goals and objectives of
decisions, urban planning practices, and investment strategies that
can genuinely contribute to the Saudi Vision 2030 of resilient and sustainable development. While there is often a direct
thriving cities like Al-Kharj amidst rapid global urbanization. relationship between higher energy consumption and
Closing this research gap is pivotal to guiding cities towards economic growth, Murshed et al. [13] stress the importance
effective and balanced strategies for sustainable urban growth in Al- of prioritizing the sustainability of this growth.
Kharj. Yabo Zhao and Wang Shaojian [14] argue that in 2015, the
increase in urbanization and economic growth would draw
2. LITERATURE REVIEW attention to the problem of energy consumption, which could
potentially hinder further urbanization and economic
Khan U [5] states that environmental sustainability has grown progress. Urban regions serve as the economic engines of
significantly for developed and developing economies their countries, experiencing swift growth that leads to
worldwide. Urbanization enables economic expansion and increased energy usage and a rise in greenhouse gas
facilitates social change, as observed in developed and emissions. According to Wang et al. [15], understanding the
developing countries. Constructing high-rise structures and connection between urbanization and energy use is crucial for
establishing industrial zones are essential for urbanization, energy conservation and emissions reduction. This is a result
significantly contributing to energy consumption and carbon of the difficulty of decelerating the consumption of fossil
emissions. These urbanization and industrialization activities fuels while simultaneously sustaining the rate of progress.
directly lead to energy consumption and carbon emissions. In Jones's [16, 17] research conducted in 59 developing nations
their study, Raihan and Tuspekavo [6] investigated the demonstrates that urbanization is the primary determinant of
attainment of environmental sustainability in Malaysia by energy consumption. Dahl et al. [18] conducted similar
reducing carbon dioxide emissions. They discovered a research and found that urbanization and industry positively
significant correlation between economic growth and carbon impacted energy use. Parikh et al. [19] discovered a direct
emissions. More precisely, a 1% rise in economic growth correlation between energy use and urbanization. Lenzen et
results in a 0.78% rise in carbon emissions. Zi et al. [7] al. [20] studied Australia, Brazil, Denmark, and Japan. They
correlate urbanization and carbon emissions. They explain discovered that the impact of urbanization on energy
that the rate of urbanization and the resulting CO2 emissions consumption varied among these nations during the same
vary depending on the season and place. period.
In their study, Ghosh and Kanjilal [21] found evidence of a [37] highlighted the correlation between economic growth,
one-way causal relationship between energy consumption, energy use, urbanization, and CO2 emissions in Bangladesh.
economic activity, and urbanization in India. Shahbaz and The relationship between urbanization and carbon
Lean [22] conducted a comprehensive study on the emissions has been investigated widely throughout the
interrelationships between Tunisia's energy consumption and previous decade, and various econometric methodologies
financial development and the impacts of industrialization have been used in their research to examine the impact of
and urbanization. The research they conducted not only urbanization on environmental deterioration. However, it is
confirmed but further strengthened the conclusions of essential to note that these studies have certain limitations.
previous examinations. Urban population growth of 1% is For instance, the data in these studies might need to fully
associated with a corresponding increase in energy capture the complexity of the relationship between
consumption of 0.9%, indicating a noteworthy and favourable urbanization and carbon emissions. Additionally, the findings
discovery. This finding aligns well with Lui's [23] and need to be more generalizable to other countries or regions
Mishra et al. [24] findings about the impact of urbanization due to specific contextual factors. Therefore, our study will
on energy use. identify the interrelationship between carbon emissions,
Furthermore, their study revealed a strong and positive economic growth, energy consumption, and urbanization and
relationship between economic growth and energy suggest a strategy to help policymakers and government
consumption. Specifically, for every 1% increase in organizations implement it for their benefit.
economic growth, there is a 0.7% increase in energy
consumption. Shahbaz et al. [25] found comparable outcomes
in the United Arab Emirates (UAE), whereas Al-Mulali et al. 3. METHODOLOGY
[26] achieved similar results across the Middle East and
North Africa (MENA) countries. 3.1 DATA
Urbanization has a considerable effect on both energy This model uses statistical data from British Petroleum (BP)
consumption and carbon dioxide emissions. However, the and the World Development Indicators (WDI). BP provides
extent of this influence differs depending on the economic information regarding primary energy consumption
development stage of the region [27]. Wang et al. [28] (expressed in exajoules) and carbon dioxide emissions (in
expressed apprehension about the environmental millions of tonnes) that result from energy usage. On the
consequences of urbanization, which has led to an escalation contrary, World Development Indicators provide the
of the energy problem. Consequently, numerous scholars following:
have examined the correlation between urbanization, energy • data about urbanization, quantified as the urban
use, and carbon emissions from diverse angles. In a study population.
conducted on a sample of developing countries, Inmaculada • insights into economic expansion, quantified as GDP
and Antonello [29] discovered an inverted U-shaped in constant US dollars.
curvilinear association between urbanization and CO2 The research spans a significant period, from 1968 to 2022,
emissions. Richard et al. [30] discovered a compelling to ensure a comprehensive analysis of past events. This
correlation between carbon emissions and the energy extensive duration allows for thoroughly examining the short-
footprint. A unitary elastic relationship was discovered term and long-term relationships among the variables under
between population, carbon emissions, and energy footprint. investigation.
Ying et al. [31] suggested that the influence of population,
technology, and prosperity on CO2 emissions is contingent 3.2 MODEL SPECIFICATION
upon the level of development in a given country. In 2009, The present study was meticulously designed to develop a
Liu YB [23] conducted a study using factor decomposition comprehensive strategy for investigating the
models (FDM) and auto-regressive distributed lags (ARDL). interrelationships among carbon emissions, economic growth,
The findings indicated that enhancing energy efficiency and energy consumption, and urbanization in the context of Saudi
accelerating urbanization could contribute to sustainable Arabia at a macro level. The outcomes of this model will be
development. In their study, Zhang and Lin [32] discovered a implemented at a micro level in the Al-Kharj region for its
rise in energy consumption and carbon dioxide emissions due sustainable development. Hence, the model can be
to urbanization in China. formulated as:
Using ARDL, FMOLS, and DOLS techniques, Zhang et al. Carbon emissions=f (Economic growth, Energy consumptio
[33] and Adebayo and Kalmaz [34] discovered a positive It is crucial to understand that several studies [9, 10, 38, 39,
correlation between economic growth and Urbanization and 40] have emphasized normalizing data series before
CO2 emissions. One is for Malaysia, and the other is for employing an econometric model. By implementing a natural
Egypt. In their study, Nondo and Kahsai [35] utilized the logarithmic transformation on every variable in our research,
ARDL approach to uncover the significant impact of we can ensure that all measurements remain consistent,
economic growth, energy intensity, and Urbanization on CO2 thereby avoiding potential challenges associated with
emissions in South Africa between 1970 and 2016. In their distributional characteristics. This method establishes
study, Kirikkaleli and Kalmaz [36] discovered that economic stationarity in a series of variables. It presents an exciting
growth, energy use, and urbanization in Turkey from 1960– possibility when examining indices such as carbon dioxide
2016 positively affected CO2 emissions. They employed emissions from energy, primary energy consumption, and
FMOLS and DOLS techniques to arrive at this conclusion. In other variables represented by different units. Therefore, each
their study, Liu and Bae (2018) highlighted the significant variable is effectively employed and converted into a
impact of economic growth, energy consumption, and logarithmic function, underscoring the importance of
Urbanization on CO2 emissions in China between 1970 and stationarity in econometric modelling. Thus, all the
2015. They employed the ARDL method to analyze and parameters are used in a real term and converted into a
uncover these positive effects. In a recent study, Islam et al. logarithmic function:
 LYt=log (Yt…………………………..(1) Carbon Emissions

Energy Use
Selection of the Variables

This can also be constituted in a log-linear econometric Economic Growth Data Selection 1968-2022

structure as:
Urbanization

Econometric Procedures C= f (E, G, U)

log (Carbon emissions) t = β0 + β1 log (energy

Summary Statistics & Correlation

consumption) t + β2 log (economic growth) t + β3 log ADF

(urbanization) t + ɛt ………(2) Stationarity Tests

PP

Where β0: constant term, β1: coefficient of a Johansen NO Cointegration Analysis

Yes

variable (energy consumption), β2: coefficient of VECM

FMOLS

variables (economic growth), β3: coefficient of variables Robustness Check

DOLS

(urbanization), t: time trend, and ɛt: assumed that the

CCR

Pairwise Granger
Causality Test

random error term is usually uniformly and autonomously

Causality Test

distributed. Diagnostic Test

The Long-run model can be expressed as: Conclusion, Limitations, Future Research Prospects

LNC t =a 0+ a1 LNE t +a2 LNGt + a3 LNU t +ε t … … … … ..(3)

In the short run, our model can be expressed as follows: Figure 1: Flow chart of the analytical techniques employed in
k k k k the study.
lnct =ҩ + ∑ ¿ 1 β i lnct −i+ ∑ ¿ 1∅ j lnet − j + ∑ ¿ 1 ∂m lng t −m + ∑ ¿ 1Ѳ n lnu t−n +u1 t … . ( 4 )
i j m 4.n RESULTS

LNC represents the lag value of carbon emissions, LNG A comprehensive descriptive statistics analysis and
represents economic growth, LNE represents the lag value of correlation coefficient matrix are displayed in Table 1. The
energy consumption, LNU represents the log value of several matrix emphasizes the following four variables: Urbanization
(LNU), economic growth (LNG), carbon emissions (LNC),
urbanizations, ҩ is the coefficient, and u represents the error.
and energy consumption (LNE). The 'Mean' denotes the
Stationarity tests, a complex yet essential aspect of
arithmetic average of each variable; LNU is 16.3, LNC and
econometrics and statistics, are commonly used to determine
LNE are both 5.4, and LNG is 26.6. The 'Median' denotes the
the order of integration for each variable within a system. A
central values of the datasets, which correspond
wide range of tests, each with its intricacies, are used in
approximately to the norms of LNG (26.6) and LNE (5.4). In
analytical and empirical research to assess the integration
contrast, LNU has a median score of 16.5, whereas LNC has
order, considering various factors. In our systematic
a marginally higher median score of 5.5. The terms
empirical stationarity analysis, we will delve into the
'Minimum' and 'Maximum' denote the upper and lower limits
complexities of the Augmented Dickey-Fuller (ADF) and
of the observations within each dataset. As an illustration, the
Phillips-Perron tests while considering intercepts. After the
LNU dataset spans from 14.7 to 17.2, whereas the LNC
unit root test, we will proceed with the co-integration test by
dataset spans from 4.1 to 6.5. The final statistical metric,
Johansen co-integration. If the co-integration is present, we
standard deviation, measures the degree of dispersion or
will proceed with the Vector Error Correction Model
variation relative to the mean. The values in this instance
(VECM). If not, we will use the Vector Autoregressive
vary between 0.28 (LNE) and 0.75 (LNC), signifying distinct
Model (VAR). If co-integration is present, we will go for the
degrees of dispersion among the datasets. The analysis of the
further estimation of long- and short-term estimates; the error
correlation coefficient matrix indicates that the variables
correction term can be estimated as:
exhibit a strong positive coefficient correlation. Table 1
ECT t −1=[ Y t−1−η j χ t −1−ξ m Rt −1 ] (5) presents a comprehensive summary of each variable's central
Furthermore, this study employs the vector error correction tendency, variability, range of values, and correlation matrix,
model framework to ascertain the causal direction among lnc, furnishing abundant information about the dataset's attributes.
lne, lng, and lnu. Equation 6 examines the causal relationship
between the variables under consideration. Where ECT Table 1: Descriptive statistics and correlation coefficient matrix
represents the error correction term, σ represents the first L L L L
difference, and φ represents the white noise residual ∂, which Vari Me Me M Mini Std. N N N N
signifies the direction of short-term causality. able an dian ax. mum Dev. C E G U

[ ][] [ ][ ][ ] [ ]
6.
lnct θ1 ∂11 ∂12 ∂13 ∂14 lnc t−n ω 1 φ
LNC 5.4 1 5.5 5 4.1 0.75 1
m
lnet θ ∂21 ∂22 ∂23 ∂24 lne t−n ω 2 φ2 5. 0.
σ = 2 +∑ σ n + [ ECT
LNE t−1 + ]
5.4 . .(6) 8
5.4 4.8 0.28 98 1
lng t θ3 n =1 ∂31 ∂32 ∂33 ∂34 lng t−n ω 3 LN 26.φ3 27 0. 0.
lnu t θ4 ∂41 ∂42 ∂43 ∂44 lnu t−n ω 4 G 6 φ 26.6 .4
4
25 0.52 88 8 1
LN 16. 17 0. 0. 0.
U 3 16.5 .2 14.7 0.73 98 93 9 1

Table 2 shows the results of the unit root test, which is a part
of the Augmented-Dicky Fuller test and the Phillips-Perron
test, which are used to figure out if the series is stationary or
not and at what level, i.e., at I (0), I (1) and I (2) level. The
series for carbon emissions from energy stopped changing at
I (1) levels for both tests. This means the series for carbon
emissions has become stationary at the first level. Moreover, The significant co-integration test result at the 0.05 level
a similar finding exists for energy consumption and economic indicates the presence of both short-run and long-run
growth. Furthermore, the urbanization series became connections between carbon dioxide emissions from energy,
stationary at I (0) levels by the Phillips-Perron test. However, primary energy consumption, economic growth, and
the ADF indicates that the series became stationary at the urbanization. The normalized co-integrating coefficient
second level, further supported by the PP test. This shows succinctly captures this relationship as:
that the series has reached a point where it is stationary at the lnc=0.65 lne+ 0.29lng +0.71 lnu
second order of difference. Due to this second order of Our objective is to examine whether the long-term changes in
difference, we will not use the ARDL bound test. carbon dioxide emissions from energy (lnc), energy
consumption (lne), economic growth (lng), and urbanization
Table 2: Unit Root Test (lnu) positively and statistically significantly influence this
ADF. Phillips-Perron variable. The results have significant implications: a one
Variable Level Prob percent increase in energy consumption corresponds to a 0.65
t-statistic Prob. Adj. t-stat. percent increase in carbon dioxide emissions from energy.
.
I (0) -0.93 0.77 -1.03 0.74 Similarly, urbanization exhibits a comparable impact, leading
LNC to a 0.71 percentage point increase in urban-related carbon
I (1) -8.13 0.00* -8.37 0.0* dioxide emissions for every percentage of urban growth.
I (0) -0.71 0.83 -0.63 0.85 Notably, carbon dioxide emissions from economic growth
LNE
I (1) -8.54 0.00* -8.61 0.0* display a positive correlation with carbon consumption,
0.02* indicating that a percentage change in economic growth leads
I (0) -3.27 -2.83 0.06 to a change in carbon emissions level by 0.29 percent. These
LNG *
I (1) -5.2 0.0* -5.3 0.0* findings, supported by Johansen's co-integration test,
underscore the urgent need to address these factors to
I (0) -2.56 0.11 -12.9 0.0* mitigate carbon dioxide emissions.
LNU I (1) -1.34 0.6 -1.02 0.74 The error correction coefficient, a vital measure of the
0.01 model's precision, gives the speed of adjustments with which
I (2) -6.03 0.0* -3.5
* the model will restore its equilibrium following any
*, ** represents 1&5% significance level source; Authors disturbances. The coefficient of ECT with lnc as a dependent
computation variable is negative and statistically significant, indicating a
convergence from short dynamics towards long-run
equilibrium. The adjustment coefficients are 0.16 percent,
Following the unit root test, we delve deeper into the models
respectively, towards long-run equilibrium in a
using a second-order lag. Table 3 showcases the results of the
disequilibrium situation, further reinforcing the robustness of
Johansen co-integration test, a pivotal step in our analysis.
our model.
The asterisk (*) mark indicates that at least one series has a
Short-term changes ultimately lead to long-term balance. The
co-integration, which denotes both long-term and short-term
statistically significant and negative coefficients for economic
effects. This finding paves the way for the vector error
growth, urban expansion, carbon dioxide emissions from
correction model (VECM), a powerful tool in our analysis,
energy use, and primary energy consumption support this. In
demonstrating our research's practical relevance and
cases of prolonged imbalance, the adjustment coefficients
applicability.
were 0.16%. The short-run equation model can be
represented and written using the following notation:
Table 3 Johansen Co-integration Test for LNG as a dependent
variable ∆ lnc t=−0.16 ECT t−1−0.11lnc t−1−0.01 lnet −1−0.16 lngt −1
Max- Pr
Eig Trace 0.05
Prob Eigen
0.05
ob
With a negative ECT, we can infer that primary energy
env Statis Critica Critica consumption, economic growth, and carbon emissions from
.** Statisti .*
alue tics l Value l Value energy use all have a long-run causal relationship. A negative
cs *
0. sign for the coefficient indicates the ability to return to
No 0.5 0.00
69.4 47.86 42.95 27.58 00 equilibrium. According to the short-run coefficient, there was
ne* 6 02
03 an increase in carbon emissions from the previous year.
At Carbon emissions are expected to rise by 1.1 percent. As
0.2 0.
mos 26.45 29.8 0.12 17.13 21.13 primary energy consumption rises, carbon emissions from
8 17
t 1*
power plants will also increase by 1 percent. For every
At
mos
0.1
9.32 15.49 0.34 6.42 14.26
0. percentage point of economic growth, carbon emissions from
1 56 the energy sector will increase by 1.6%, and urban growth in
t2
At the short run reveals a decrease in carbon emissions of 8.4
0.0 0. percent. This might be due to sustainable urban planning.
mos 2.90 3.84 0.09 2.9 3.84
53 09
t3
LNC LNE LNG LNU Table 4 Robustness Check by Co-integration Regression
1 -0.65 -0.29 -0.71 Variable FMOLS DOLS CCR
0.14 0.06 0.112 0.0
LNE 1.29 1.25 0.00 1.31 0.00
0
**MacKinnnon-Haug-Michelis (1999) p-values
0.0 0.0
Source; Authors Computations LNG 0.16 0.24 0.15 0.00
0 0
0.0 0.0
LNU 0.44 0.28 0.44 0.00
0 0
 0.0 0.0
C -13.04 -12.3 -12.9 0.00
0 0
2
Adj R 0.99 0.99 0.99
Jarque-Bera 2.71 0.26 1.78 0.41 1.48 0.48
C; Co-integration coefficient deterministic; * represents 1 per
cent of significance level
Source: Author Computation
Figure 1 depicts the Granger Causality Test, where *and **
represent the 5% and 1 % significance levels, respectively.
When we do the analysis, we will also use the fully modified
ordinary least squares (FMOLS), dynamic ordinary least Figure 1 visually represents the pairwise Granger causality
squares (DOLS), and Canonical Co-integration Regression test results, revealing both unidirectional and bidirectional
(CCR) methods for co-integration regression. This will make causality. A key finding is the unidirectional relationship
our results even more reliable. These methods are frequently between carbon emissions, energy consumption, and
employed in econometrics to examine the enduring economic development. We also identify a bidirectional
connections between variables. The findings of a co- causal relationship between energy consumption and
integration regression analysis using FMOLS, DOLS and economic growth. Furthermore, a unidirectional causal
CCR methods are presented in Table 4. The dependent relationship exists between urbanization carbon emissions
variable in this analysis is carbon emissions. The model aims and energy consumption. The significance of the Breusch-
to elucidate the relationship between carbon emissions and Godfrey serial correlation LM test, the Breusch-Pagan-
other variables. Within this framework, the variable in Godfrey heteroscedasticity test, and the Jarque-Bera
question is the dependent variable. The regression model normality test cannot be overstated. These tests are crucial in
includes independent variables such as energy consumption, validating our analysis, confirming the absence of serial
economic growth, urbanization, and carbon emissions. They correlation and homoscedasticity and the normal distribution
are indicators of variables that could impact carbon of the series, and instilling confidence in the reliability of our
emissions. findings.
Our significant statistical findings reveal that the energy
consumption coefficient is 1.29. This suggests that a carbon 5. CONCLUSION
emission increase of 1.29 units is associated with every one-
unit increase in energy consumption. The coefficients for Global concerns regarding climate change and the associated
economic growth (0.16) and urbanization (0.44) both indicate adversities have manifested the necessity for achieving
positive correlations. The constant term (C) is -13.04, a environmentally sustainable growth by phasing out the
concerning value. Importantly, all exogenous variables are traditional trade-off between economic gains and
significant at the 1% level, providing robust evidence for our environmental losses. In this regard, reducing carbon
analysis. emissions has become a significant concern worldwide.
Our findings continue to underscore the positive correlation Although the issue of establishing low-carbon economic
between the variables. The energy consumption coefficient is growth has been widely acknowledged in the Paris
1.25, suggesting a direct relationship. The coefficient Agreement and the SDG declarations of the United Nations
associated with economic growth is 0.24, indicating a [9], not much emphasis has been devoted to the literature on
positive correlation with the variable of interest. Similarly, identifying the macroeconomic factors influencing the level
the coefficient for urbanization is also positive, at 0.28. All of carbon emissions. Hence, this current study attempted to
exogenous variables are statistically significant at the 1% evaluate the effects of energy consumption, economic
significance level, with the constant term (C) having a value growth, and urbanization on the carbon productivity levels in
of -12.3. These results emphasize the urgent need to address Saudi Arabia and in the Al-Kharj Municipal Region, a region
these issues. known for its rapid urbanization and significant contribution
According to the CCR coefficients, the energy consumption to the country's carbon emissions. In addition, further
coefficient is 1.31, indicating a positive correlation. Given addressing the literature gap and if energy efficiency gains
that the coefficient for economic growth is 0.15, there is a indirectly influence carbon productivity levels by
positive correlation between the variable of interest and the moderating/mediating the impacts of other macroeconomic
coefficient for urbanization (0.44). All exogenous variables factors on carbon productivity, this study also focused on
investigated in this study are statistically significant at the 1% unearthing and estimating these effects. Therefore, the
level, meaning they strongly influence carbon emissions. The present study was meticulously designed to develop a
constant term (C) is -12.9, indicating the expected value of comprehensive strategy for investigating the
carbon emissions when all other variables are zero, which is interrelationships among carbon emissions, economic growth,
harmful. energy consumption, and urbanization in the context of Saudi
The robustness of our model is evident in the high R-squared Arabia at a macro level spanning 1968–2022.
and adjusted R-squared values (0.995 and 0.994 for CCR, Our findings on the harmful energy consumption-CO2
0.998 and 0.997 for DOLS, and 0.995 and 0.994 for emissions tightening (ECT) indicate a long-term causal
FMOLS). These values indicate that the independent relationship between primary energy consumption, economic
variables can explain a significant portion of the variation in growth, and carbon emissions from energy use. Importantly,
carbon emissions, demonstrating a solid fit of the model to these findings offer hope. The negative coefficient suggests a
the data. The Jarque-Bera test further underscores the tendency to return to equilibrium, implying that we can steer
importance of our findings. these factors towards a more sustainable path with the right
interventions. The short-term coefficient, however, shows a
3.5* Economic Growth
Energy consumption
8.7**

Urbanization

3
.
9
*
rise in carbon emissions from the previous year, projecting an specific results to overall panel outcomes using advanced
increase of 1.1 percent. As primary energy consumption econometric methodologies and panel estimations. These
increases, carbon emissions from power plants are expected comparisons could offer valuable insights, emphasizing the
to rise by 1 percent. necessity for a more comprehensive understanding of
Similarly, for every percentage point of economic growth, environmental degradation.
carbon emissions from the energy sector are projected to
increase by 1.6%. However, amidst these projections, short- 6.1 RECOMMENDATION
term urban growth indicates an 8.4% decrease in carbon
emissions, possibly due to sustainable urban planning. This Redirecting investments towards more miniature cities and
finding underscores the potential for change and the towns, which still need to be saturated with job creation and
importance of sustainable practices in our urban areas, congestion, holds immense potential. Our study strongly
instilling optimism for the future. advocates for a shift from Riyadh to the Al-Kharj region.
Furthermore, we conducted a robustness test using co- This moves promises to relieve the strain on megacities and
integration regression analysis by FMOLS, DOLS, and CCR. foster more balanced regional development, instilling a sense
These regression analyses reveal that energy consumption is of optimism for a brighter future.
the most common, urbanization is second, and economic Implementing and spreading automated energy control
growth stands last in causing carbon emissions. At the end, systems in the residential sector is crucial for energy
we conduct a pairwise Granger causality test to reveal the conservation. However, it is equally important to underscore
direction of causality, indicating both unidirectional and the pivotal role of public knowledge and effective policies.
bidirectional. The relationship between carbon emissions and We can significantly reduce energy usage and emissions by
energy consumption is one-way causation, a robust finding promoting awareness and implementing policies that
supported by Al-Dhubaibi et al. [41]. Furthermore, the one- encourage energy conservation. This, coupled with adopting
way link between carbon emissions and economic growth, zero-emission buildings as the standard, can empower us to
which is supported by Bah & Azam [42] and Ali et al. [43], shape a more sustainable future.
and the two-way link between energy use and economic
growth, which was found and supported by Malik [44], Yuan
et al. [45], and Belloumi [46], make our research even more ACKNOWLEDGMENT
reliable.
The results of the Breusch-Godfrey serial correlation LM test, The authors extend their appreciation to Prince Sattam bin
the Breusch-Pagan-Godfrey heteroscedasticity test, and the Abdulaziz University for funding this research work through
Jarque-Bera normality test all show that our research method the project number PSAU/2024/02/28646)
is robust. These tests confirm the absence of serial
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