The Gulf’s special challenge on climate change
For decades, the Gulf states have enjoyed an oversized role in global energy markets owing to their status as producers, petrodollars having simultaneously encouraged staggering energy inefficiencies at home. As the world works toward the aims of the Paris Agreement on climate change, how the Gulf states, themselves at acritical juncture in their development, are able to meet their stated aim to be “net zero” in 30 years is a challenge of great proportions.
The UN COP26 climate change conference in Glasgow, which concluded on Saturday, has focused minds once again on the issue of global warming. On the back of a climate change “Code Red” following the Intergovernmental Panel on Climate Change report this year, the conference sought to pressure governments into action. That report highlighted that the Arab world was at the forefront of this danger, with the Gulf states having warmed more in the past 20 years than the rest of world has since 1850. With this in mind, Saudi Arabia and Bahrain committed to reaching net zero by 2060 and the UAE by 2050. The announcements were long expected; the three nations, along with Qatar and Kuwait, are among the world’s top 10 carbon dioxide emitters per capita. Given that the energy sector accounts for around three-quarters of greenhouse gas emissions, the involvement of the Gulf states is central to meeting the objectives of the Paris agreement.
The commitments present a double-edged sword to the Gulf states, themselves vulnerable to the effects of climate change but with hydrocarbons as the main source of GDP. This means a switch from oil to other energy sources will undoubtedly affect their economies, which have already struggled with a period of sustained low prices. However, the Paris Agreement is legally binding in seeking signatories to limit global warming to well below 2 degrees Celsius (and preferably 1.5) compared with pre-industrial levels, and therefore requires energy producers to take action.
Reaching this goal requires large scale investment. Saudi Arabia and the UAE, fortunate with ample gas resources, are also trying to rapidly build up their hydrogen industries. They are also both constructing several utility-scale solar projects to feed rising electricity consumption, while the UAE has also begun operations at its Barakah nuclear power plant. The total investment announced by Saudi Arabia to meet net zero is $187 billion, a huge bill in the context of the reduction in oil revenue which will come as a result and the gradual imposition of taxes and removal of subsidies locally. With current electricity production from renewables in the single figures, the Kingdom, like its Gulf neighbors, faces an uphill challenge to meet its goal of 50 percent electricity production from renewables by 2030.
The UN COP26 climate change conference in Glasgow, which concluded on Saturday, has focused minds once again on the issue of global warming.
Zaid M. Belbagi
This challenge to invest in renewables amid falling state revenue was summarised concisely by Mariam Almheiri, the UAE Minister for Climate Change and Environment: “This is a transition, we can’t just switch off the tap.” The economic realities of the difficulties of meeting Paris deadlines are represented by Oman, which in the context of economic challenges can only commit to a 7 percent reduction in emissions by 2030 —far short of the 50 percent scientists say is needed. This comes amid criticism that states in the region are “Greenwashing,” in the absence of clear plans for reducing emissions, making only short term commitments because of an overreliance on the revenues that hydrocarbons bring. These concerns have been echoed by policy makers across the region. UAE Minister of Industry Sultan Al-Jaber said: “We must include oil and gas, because it will be mainstream — it will be the spinal cord of our ability to meet energy requirements in the future.” Saudi Energy Minister Prince Abdulaziz bin Salman has repeatedly said a “holistic” approach to transition that would include oil, gas, and hydrogen production is required.
Hydrocarbons have brought unprecedented development to a region where in 1950 the average life expectancy was 43; after centuries of hardship, buoyant global energy demand provided prosperity. However, this wealth has brought large movements of people and encouraged population growth locally. Temperatures in Kuwait City this summer reached 63C under direct sunlight. The huge amount of energy used to keep buildings cool is, in effect, creating heat. The water that is desalinated to encourage the highest rates of usage in the world is causing ecological destruction and further carbon emissions. Since it is clear that reaching a situation when the amount of carbon dioxide added is no more than the amount taken away is going to be costly and difficult to achieve, it may be more practical to encourage changes in lifestyles and consumption to avoid further consequences of climate change in a region that has always struggled to support life.
- Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC). Twitter: @Moulay_Zaid