Navigating the Oil-environment Nexus: Saudi Arabia’s Challenge in Sustainable Development

Abstract

This paper delves into Saudi Arabia's challenge of aligning its substantial oil production with environmental sustainability goals, particularly within the framework of Vision 2030. Utilizing an Autoregressive Distributed Lag (ARDL) approach, it examines data from 1980 to 2022, analyzing the relationships between oil production, economic growth, CO2 emissions, and environmental regulation compliance. The study highlights the intricate dynamics between oil-driven economic development and environmental conservation, revealing significant long-term correlations that underscore the environmental costs accompanying economic benefits derived from oil. These findings illuminate the delicate balance Saudi Arabia faces, pointing to the need for sustainable practices in the oil industry and diversified economic growth. The research provides strategic insights for policy formulation, aiming to harmonize economic prosperity with environmental health. This work contributes significantly to the discourse on sustainable development in resource-rich economies, offering a vital perspective on managing natural resources responsibly while pursuing economic growth.