Asymmetric impacts of natural gas consumption on renewable energy and economic growth in Kingdom of Saudi Arabia and the United Arab Emirates

The globe is now in ecological turmoil as a result of the unrelenting increase in global warming. As a result, governments worldwide are committing to decarbonizing the environment, with the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) playing an important role in this effort. Hence, this paper evaluates the nonlinear (asymmetric) impact of natural gas consumption on renewable energy consumption and economic growth in the KSA and the UAE utilizing data stretching from 1990 to 2020. The study also considers other drivers of renewable energy consumption and economic growth, such as trade openness and CO2 emissions. The study utilizes nonlinear autoregressive distributed lag (ARDL) to evaluate these associations. The outcomes of bounds nonlinear ARDL (NARDL), affirm the long-run association between the variables in both countries. The nonlinear results show that positive and negative shocks in natural gas consumption have a negative impact on renewable energy in both UAE and KSA. In contrast, positive and negative shocks in natural gas consumption impact economic growth positively. The study proposed vital policy recommendations based on these results.

Automated summary

The globe is facing ecological turmoil due to increasing global warming. Governments worldwide, including the UAE and KSA, are committed to decarbonizing the environment. This study evaluates the nonlinear impact of natural gas consumption on renewable energy consumption and economic growth in the KSA and UAE, considering other factors such as trade openness and CO2 emissions. The findings suggest that natural gas consumption has a negative impact on renewable energy but a positive impact on economic growth in both countries. The study provides important policy recommendations based on these results.