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IJSTR >> Volume 9 - Issue 8, August 2020 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

An Econometric Analysis Of Determinants Of Energy Intensity And Its Relevance To Energy Efficiency: A Case Of Saudi Arabia

[Full Text]



Bayan Aljahdali, Dr. Haga Elimam



Energy Intensity, Energy Efficiency, Economic Growth, Urbanization, Economic Structure.



Since 1971, Saudi Arabia has experienced a rapid growth in population and economic activities, which led to an increase in demand for energy sources. Therefore, in the quest to reduce local energy consumption, the study aimed to investigate the impact of real GDP per capita as economic growth indicator, energy prices, industrialization share in GDP, services share in GDP and urbanization on energy intensity over the period 1971–2015. For the study purpose, a linear dynamic model: Autoregressive Distributed Lag (ARDL) and a version of the Granger causality test based on Toda and Yamamoto (1995) approach were used.Based on ARDL estimation, real GDP per capita and energy prices have a negative impact on energy intensity, while the industrialization share in GDP, services share in GDP and urbanization have a positive effect on energy intensity. Causality tests found a unidirectional causality running from GDP per capita to energy intensity, but not vice versa. This means that an energy conservation policy would not slow the economic growth in Saudi Arabia. Also, a unidirectional causality running from industrialization and services share in GDP to economic growth implies that the impact on energy intensity is occurring through economic activities. Thus, the study suggests that Saudi Arabia should consider reducing energy consumption in non-renewable energy sources by investing in renewable energy sources. Besides that, urban environment must be improved to increase energy efficiency and achieve sustainable development in the future.



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