An Empirical Assessment of Oil, Natural Gas, Mineral, and Forest Rents on CO₂ Emissions in Saudi Arabia

The role of natural resource rents (NRR) in driving environmental degradation has attracted increasing scholarly attention, particularly in resource-dependent economies. In the case of Saudi Arabia, where oil and gas extraction constitutes a substantial proportion of GDP, the relationship between resource rents and environmental quality warrants rigorous investigation. This study examines the effects of oil, natural gas, mineral, and forest rents on carbon dioxide (CO₂₎ emissions within the framework of the Environmental Kuznets Curve (EKC), over the period 1970–2023. Employing optimal lag selection criteria, augmented Dickey–Fuller and Phillips–Perron unit root tests were applied to ensure the stationarity of variables, followed by Johansen cointegration analysis to establish the existence of long-run relationships among them. The EKC hypothesis is empirically validated, with a turning point identified at 65,914 Saudi Riyals (SR) in the long term and 65,912 SR in the short term, indicating a non-linear relationship between economic growth and CO₂ emissions. Oil Rents (OR) were found to exert statistically significant positive effects on CO₂ emissions in both the short and long run, suggesting that oil dependence remains a critical driver of environmental degradation. Conversely, natural gas, mineral, and forest rents exhibited statistically insignificant impacts in the long run, although short-run analyses revealed a positive but marginally significant influence of natural gas and forest rents. These findings underscore the asymmetric environmental implications of different types of resource rents. Policy implications point toward the urgent need to diversify the economic base away from oil dependency and enhance regulatory frameworks to mitigate the ecological costs of resource exploitation. By integrating the EKC hypothesis with disaggregated rent variables, this study contributes to the nuanced understanding of resource–environment dynamics in hydrocarbon-reliant economies.