Relationship between Climate Change and Economic Growth: Evidence from Saudi Arabia

Kyoto protocol requires a more stable and sustainable economies to reduce GHG emission so the relationship between CO2 emission and economic growth is an important issue in the world. We proposed simple regressions model to measure the relationship between CO2 emission and economic growth in the case of Saudi Arabia during 2008 to 2013 including the CO2 as dependent variable while Capital , GDP per capita and energy consumption per capita is taken as independent variables. Results reveals that CO2 emissions grow up with an increasing rate during the basic phase of economic growth, but after a certain point CO2 emissions decrease with further growth. Empiric grounds shows a mixed relationship between economic growth and CO2 emissions. We suggests a policy that international investors should shows a keen interest to issue the green bonds which often increase the energy-efficiency services to reduce the emissions. This study provides a valuable guidelines to policy makers and provides an ease towards decision making.