Factors that impact greenhouse gas emissions in Saudi Arabia: Decomposition analysis using LMDI

Over the past three decades, Saudi Arabia's greenhouse gas (GHG) emissions have increased sharply. This study exposes the factors that affect GHG emissions in nine sectors via the logarithmic mean Divisia index (LMDI) method for 1990 to 2016. The analysis demonstrates that the energy effect was a leading factor increasing greenhouse gas emissions, at 386.76 million tonnes of carbon dioxide-equivalent (MTCO2e). Activity and population effects also contributed to the increase in emissions at 339.56 (MTCO2e) and 267.38 (MTCO2e), respectively, but the energy effect was greater than the other effects. Results reveal that activity, energy and population effects are greater in the electricity sector than the transport sector. The electricity sector increased greenhouse gas emissions by 4298.05 (MTCO2e) and transport, 2243.63 (MTCO2e). Therefore, policymakers need to consider climate change when they are developing economic growth plans to achieve sustainable development. This may be done through adopting a new policy to transfer from traditional sources to renewable energy sources or focusing on raising energy efficiency and changing energy structure to impact the growth of greenhouse gas emissions.