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How can the mining sector diversify the Saudi economy to achieve eco-efficiency?

Louail Bilal, Riache Siham

Economics and Environment

2025

No. 2

art. no. 820

This paper explores how export diversification and the mining sector influence Eco-efficiency in Saudi Arabia, both in the short-run and long-run impacts. The paper also accounts for the influence of GDP, aggregate power usage, and urban development. Adopting an autoregressive distributed lag (ARDL) framework, the paper first confirms a stable long-run relationship among the variables under consideration. The results show that, in both the short and long run, increased trade diversification, GDP, and urban development lead to increased CO2 emissions. Notably, the negative impact of these variables on the environment is more pronounced in the long run. By contrast, investment in the mining sector is found to reduce CO2 emissions and improve the environment in both the short and long run. Unexpectedly, energy consumption has no significant environmental impact. The results are found to be robust under various statistical tests for common issues. Stability tests also support the robustness of the long-run relationships and validity of the ARDL model. The results of this study have significant implications for designing strategies for environmental conservation.