Dynamics of Greenhouse Gas Emissions from Cement Industries in Saudi Arabia - Challenges and Opportunities

This paper presents the challenges and options for reducing GHG emissions in the cement sector in the Kingdom of Saudi Arabia (KSA) and analyses short- and long-run causal relationships between emissions from cement production and their key factors through developing a Vector Error Correction Model (VECM). The cement industry in the KSA has been expanding rapidly due to the annual rise in the number of tourists, the development of residential and commercial sectors, and the government's strong drive towards economic diversification under Vision 2030. With this growth of the sector, however, arises an increase in Greenhouse Gas (GHG) emissions. The growing population coupled with an objective to grow economically subsequently demands further jobs and infrastructure. The local production of cement depends on many factors including demography, urbanization, tourism, GDP and interactions. The unit root test results prove no variables have unit roots 'at first differences'. Equilibrium relationship results displays cement emissions are positively correlated with population, number of tourists, GDP, energy consumption and negatively correlated with urban population. Causality test results demonstrates cement production have a long-run causal relationship with population, urbanization, GDP, and energy consumption and negative causal relationship with urban population. Therefore, GDP and energy consumption must be clean, and policymakers must accelerate the transition to low- or zero-carbon economies and energy sources to cut cement industry emissions. Future population growth must be accommodated in metropolitan areas to limit cement emissions. The results also show a unidirectional causal relationship between tourists and emissions. Therefore, public and private sectors should offer services with low carbon footprints and support initiatives to reduce tourist-induced emissions. A set of recommendations were also provided to mitigate GHG emissions in cement industries.