Abstract
In view of Saudi Arabia's position as one of the main polluters in the World and its status as an oil country, it is interesting to study the relationship between transport carbon dioxide (CO2) emissions, road transport energy consumption and economic activity in Saudi Arabia. We check for the environmental Kuznets curve hypothesis for Saudi Arabia over the period 1971-2011. The conventional unit root tests, unit root tests with the breakpoint, the autoregressive distributed lag (ARDL) bounds testing to cointegration procedure and Granger causality tests are employed. We find that the inverse-U relationship does not exist between transport CO2 emissions and economic growth in Saudi Arabia. In addition, there is a bidirectional causality between transport CO2 emissions and road transport energy consumption in both the short and long run. However, there is only unidirectional causality running from economic growth to transport CO2 emissions and road transport energy consumption in the long run. Hence, our results indicate that energy conservation policies in the transport sector should be addressed in the long run without caution to limit economic growth. In addition, from a sustainability perspective, a continued economic growth is not possible in Saudi Arabia without continuing increases in carbon emissions.