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Energy price reform to mitigate transportation carbon emissions in oil-rich economies

Author

Listed:
  • Sa’d A. Shannak

    (Hamad Bin Khalifa University-Qatar Foundation)

  • Jeyhun I. Mikayilov

    (King Abdullah Petroleum Studies and Research Center)

  • Rubal Dua

    (King Abdullah Petroleum Studies and Research Center)

Abstract

This study examines the impact of domestic fuel prices, population, and economic activity on transport CO2 emissions, employing Saudi Arabia as a case study. The research uncovers statistically significant long-term associations between these variables. Despite transport CO2 emissions demonstrating slight responsiveness to fuel price alterations, with estimated elasticity values between – 0.1 and – 0.15, the study affirms the relevance and timeliness of the Saudi government's strategy to curtail fuel incentives. Projections for a 2030 scenario, encompassing heightened economic activity aspirations and further escalations in domestic fuel prices to mirror true market costs, revealed a 1.8 percent annual reduction in transport CO2 emissions from 2021 to 2030 compared to a scenario with unchanging fuel prices. The insights from this study bear significance not only for Saudi Arabia but also for other oil-rich nations striving to pave the way toward a sustainable transportation future.

Suggested Citation

  • Sa’d A. Shannak & Jeyhun I. Mikayilov & Rubal Dua, 2024. "Energy price reform to mitigate transportation carbon emissions in oil-rich economies," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 26(2), pages 263-283, April.
    • Handle: RePEc:spr:envpol:v:26:y:2024:i:2:d:10.1007_s10018-024-00400-9
    DOI: 10.1007/s10018-024-00400-9
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