Urbanisation and human capital shape Saudi Arabia’s energy–emissions nexus through direct rather than moderating channels
Year: 2026
Type: article
Abstract: We revisit the energy-growth-environment nexus in Saudi Arabia (1970-2023) and ask, for the first time in a single-country time-series setting, whether urbanisation and human capital moderate the energy-CO₂ elasticity. Within an augmented STIRPAT framework, we test moderation using orthogonalised interaction terms that remove mechanical multicollinearity, and we estimate the relationship with ARDL bounds testing, NARDL decomposition, Toda-Yamamoto causality, and FMOLS/DOLS/CCR. A stable long-run relationship is confirmed (F = 6.89; ECT = - 0.67). Energy consumption is the dominant driver of emissions (elasticity ≈ 0.94), while urbanisation and trade openness act as direct mitigating determinants. Crucially, the orthogonalised energy-urbanisation and energy-human-capital interactions are not statistically significant: once structural breaks and core covariates are included, urbanisation and human capital operate through direct channels rather than by bending the energy-emissions elasticity - a substantive null that contrasts with cross-country studies and constrains policy modelling. Causality is bidirectional between emissions and growth, and trade openness causes both emissions and energy use; the NARDL provides insufficient evidence to detect asymmetry, so the parsimonious linear specification is preferred for inference. For Saudi Arabia's net-zero-2060 target, these results imply that decarbonising the energy mix is indispensable, while Vision 2030's urban and human-capital investments yield direct emissions benefits.
Source: Scientific Reports
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,690
OpenAlex ID: W7169660435
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