The influence of economic development, capital formation, and internet use on environmental degradation in Saudi Arabia

Abstract Sustainable economic growth and environmental degradation are two concerns confronting humanity. Saudi Arabia has seen a dramatic rise in its atmospheric carbon emissions during the last three decades. From 1995 to 2020, this research uses the decoupling index and vector error correction model technique to reveal the variables influencing CO 2 emissions in Saudi Arabia. This research aims to empirically analyze the causal factors that link carbon emissions, energy use, economic growth, and internet usage. The big priority of this research is to use various techniques and methodologies to examine the cointegration and long- and short-run relationships between macroeconomic variables and stock price. According to the augmented Dickey–Fuller unit root test results, the main series is stationary in the first difference but non-stationary at the level. According to Johansen’s cointegration study, both relations between the variables exist in the Kingdom of Saudi Arabia. The VEC model’s outcome shows that internet use significantly contributes to rising greenhouse gas emissions. When creating strategies for economic growth to achieve sustainable development, policymakers must consider climate change. This may be accomplished by implementing a new policy to switch from conventional to renewable energy sources, emphasizing increased energy efficiency, or reorganizing the energy sector to influence the rise in greenhouse gas emissions.