Evaluating Renewable Energy’s Contribution to Saudi Arabia’s Economic Growth and Environmental Sustainability

This study examines the dynamic relationship between economic growth, environmental sustainability, and other important factors related to energy usage and macroeconomic variables in Saudi Arabia from 1960 to 2024. This study aimed to analyze the relationship between energy consumption, renewable energy, trade openness, and oil rents, and their impact on economic performance and environmental results. This study is based on the annual data obtained by the World Bank in the World Development Indicators (WDI) database. The model considers that renewable energy consumption has a positive and significant effect on economic growth (ECGR) and environmental sustainability (ES). ADF unit root tests, ARDL bounds testing, ECM, and T-values were used to determine the significance of the statistics to determine the direction and strength of the relationships. The findings reveal that PEC has a significant positive impact on economic growth and environmental sustainability. Conversely, the effects of RE, TO, and OR are weak or negative, indicating that the dependence on traditional energy sources and oscillating oil revenues constrains their contribution to sustainable development. This study offers empirical data concerning the effect of the energy–environment–growth nexus in Saudi Arabia through a long historical context, which is valuable to policymakers, researchers, and practitioners interested in sustainable development and energy transition aspects.