Saudi Arabia and greenhouse gas emissions

Historical and Political Context

Saudi Arabia is located in the Middle East and borders the Persian Gulf, the Red Sea, Yemen, the United Arab Emirates, Iraq, Qatar, Oman, Jordan, and Kuwait. Riyadh is its capital city, with a population of 6.907 million (2018). Saudi Arabia is a monarchy led by King Abdullah, who has been head of state since 2005, and an appointed 150-member consultative council. Saudi Arabia is the historical home of Islam, its official religion, and Arabic is its official language. Like most of its Gulf State neighbors, Saudi Arabia is a founding member of the Organization of Petroleum Exporting Countries (OPEC) and is the world’s largest producer and exporter of total petroleum liquids. It was the world’s largest producer of crude oil in 2016, producing 12 million barrels per day.

As of January 2017, Saudi Arabia held the world’s greatest proven oil reserves—an estimated 266.5 billion barrels—and the fourth greatest proven natural gas reserves—an estimated 8.602 trillion cubic meters. With approximately 16 percent (2015) of the global proven oil reserves and minimal production costs, Saudi Arabia is expected to remain the world’s largest oil exporter over the short and long term. As a result of its role in energy production, Saudi Arabia, with 0.4 percent of the world’s population, accounts for 2 percent of global greenhouse gas (GHG) emissions, the highest level of GHGs on average among the oil-producing Gulf States. Since World War II, Saudi Arabia has been closely aligned with the United States as a major trading partner. It is the second-largest exporter of oil to the United States after Canada.

Impact of Saudi Policies on Climate Change

On January 31, 2005, Saudi Arabia ratified the Kyoto Protocol and was classified as a developing, non-Annex I nation, meaning that it was not required by the protocol to reduce its GHG emissions. Because of its relatively high GHG emissions, however, Saudi Arabia expressed interest in the protocol’s clean development mechanism (CDM), which allows industrialized,Annex I countries to satisfy their Kyoto commitments in part by funding environmentally friendly development projects in non-Annex I countries.

In 2006, Saudi Oil Minister Ali al-Nuaimi hosted an international CDM conference in Riyadh, where attendees reviewed investment opportunities in Saudi Arabia and other oil-rich Gulf States for new CDM projects, including some that employed high-technology carbon capture-and-storage technology. In such technology, carbon dioxide (CO₂) is removed from petroleum processing plants and sequestered in mature oil fields. CDM programs have assumed greater significance for the Gulf States that fear their oil exports might be restricted should the United Nations raise environmental standards in 2012, when the Kyoto Protocol is to be replaced. Industrial diversification is an alternative to CDM programs.

The World Trade Organization (WTO) has encouraged Saudi Arabia to lessen its economic dependence on its oil and petroleum industries by diversifying its industrial sector so as to include more environmentally friendly endeavors. Paradoxically, since 2000, the wealth garnered from the GHG-emitting energy industry has driven such diversification, enabling Saudi Arabia and other Gulf States to achieve significant economic development both with their own domestic capital and through some 750 American business ventures. This activity has resulted in a diverse range of new business opportunities for the Saudi government and employment opportunities for the country’s workforce. As part of an effort to attract foreign investment and diversify the economy, Saudi Arabia has substantially increased spending on job training and education, infrastructure development, and salaries for government employees. Saudi Arabia acceded to the wishes of the WTO in 2005 and announced plans to establish six “economic cities” in different regions of the country to promote development and diversification.

Saudi Arabia as a GHG Emitter

According to the United Nations Development Programme (UNDP), if all the countries in the world were to emit CO₂ at levels comparable to that of Saudi Arabia, the world would exceed its sustainable carbon budget by approximately 511 percent. Reuters in 2008 ranked Saudi Arabia twenty-third out of the twenty-five highest GHG emitters in the world. The top-twenty-five GHG emitters are a diverse group comprising thirteen Annex I nations, eleven non-Annex I nations, and one regional party, the European Union. According to the Union of Concerned Scientists, Saudi Arabia ranked tenth out of the top twenty emitters in 2015.

One unifying metric among the top GHG emitters is the significant association between GHG emissions, population size, and gross domestic product (GDP) ranking; most of the top GHG emitters have either large populations, large GDPs, or both: Seventeen of the top twenty-five emitters are among the twenty-five most populated countries, and twenty-two of the top twenty-five emitters have the largest economies, some because of large populations and others because of high wealth per capita. For example, from 1990-2002, the growth rate of CO₂ emissions for affluent oil exporters Indonesia, Iran, and Saudi Arabia was 97 percent, 93 percent, and 91 percent, respectively.

Saudi Arabia’s non-CO₂ emissions grew by 50 percent from 1990–2000, the highest percentage among the top-twenty-five GHG emitters. Population growth in Saudi Arabia was 46 percent from 1990–2002, the highest percentage of the top-twenty-five GHG emitters, three times greater than that of China, and almost twice that of Iran. Energy intensity (energy consumption per unit of GDP) increased in Saudi Arabia by 52 percent from 1990–2002, the highest percentage among the top-twenty-five GHG emitters.

As regards per capita ranking, while the OPEC Gulf States have high per capita GHG emissions, data show that of the top-twenty GHG emitters, generally, the highest emitters per capita were the Annex I countries (Australia, the United States, and Canada, ranked fifth, seventh, and eighth, respectively, with per capita GHG emissions of 25.6 metric tons, 24.3 metric tons, and 22.2 metric tons, respectively). Annex I countries’ per capita emissions are approximately double those of the highest-ranked developing country in the top twenty (South Korea, at 11.0 metric tons per capita), and they are six times that of China (3.9 metric tons per capita). Saudi Arabia was ranked fifteenth in per capita GHG emissions, producing 16.5 metric tons per person.

The population density of Saudi Arabia in 2007 was 11.3 persons per square kilometer, in a country a little more than one-fifth the size of the United States. Economic growth in the top GHG emitters is sometimes measured in terms of GDP per capita, and this measurement has been shown to bear a significant relationship to a country’s GHG emissions. Usually, significant GDP growth per capita results from energy-intensive activities, which significantly increase GHG emissions. In 2008, the Saudi GDP was ranked twenty-third in the world by the International Monetary Fund (IMF); the Saudi petroleum sector accounted for roughly 45 percent of the nation’s GDP, 80 percent of its budget revenues, and 90 percent of its export earnings. Some 40 percent of the GDP came from the private sector.

High oil prices through mid-2008 enhanced economic growth, government revenues, and Saudi ownership of foreign assets, enabling Saudi Arabia to pay down its domestic debt. In March, 2009, Saudi Arabia, along with other OPEC member nations, cut production of oil to support falling oil prices on the world market, and crude oil futures rose to $51.55 per barrel in New York. OPEC lowered Saudi Arabia’s production quota for oil, although it was reported that the Saudi government privately promised to satisfy the energy needs of their export partners. However, liquid fuel demands in the United States are expected to increase by only one million barrels per day from 2007 to 2030, as domestic biofuels and other renewable energy sources, along with increasing domestic oil production, reduce U.S. dependence on the foreign oil market. As a result, the United States is projected to import less than 40 percent of liquid fuels it consumes in 2025. This decrease will likely decrease Saudi oil revenues, either directly by lowering volume of sales or indirectly by lowering prices.

Summary and Foresight

At the April 2009, Group of 20 (G-20) summit in London, French President Nicholas Sarkozy declared that global leaders were moving to create a new world order, less centered on U.S. and Anglo-Saxon models, with increased regulation of the global financial sector and a greater role for international institutions and emerging markets. In addition, the G-20 pledged to triple the resources of the IMF, enabling developing countries to more fully participate in the global economy; the United States and the European Community need the monetary and energy resources of rising powers such as Brazil, China, and Saudi Arabia to help restore the global economy and tackle the ongoing challenge of climate change.

While the United States remains the preeminent military and economic power in the world, its ability to manage its financial markets and banking system will be significant factors in overcoming the global economic and climate crises. Also important is how emerging nations such as Saudi Arabia, the only Arab country and OPEC member invited to the G-20 summit, present themselves to the world. Saudi Arabia’s handling of its currency reserves, trade policies, and energy exports will influence global climate policy and affect the efficacy of that policy. Saudi energy policy and development will also affect the rights of indigenous populations, farmers, youth, and women, who, according to the U.N. Stockholm Declaration of 1972, enjoy a human right to a healthy environment.

When the U.N. Conference of the Parties to the Framework Convention on Climate Change (COP) met in Copenhagen, Denmark, in December of 2009 to address climate change and to plan the treaty that will replace the Kyoto Protocol in 2012, Saudi Arabia provided input as both a developing, non-Annex I country and a wealthy, OPEC-member oil exporter and a significant emitter of GHGs. At a pre-COP meeting in March 2009, U.S. president Barack Obama called for an increase in the amount of corn-based ethanol for use in U.S. gasoline. An advisor to the Saudi oil minister, Mohammad al-Sabban, indicated that while his country does not support subsidies for biofuels, citing environmental and economical concerns, it would cooperate, demonstrating a willingness to consider alternative energy sources.

Al-Sabban also declared that Saudi Arabia would invest heavily in renewable, especially solar, energy and build a carbon-neutral city, stating that Saudi Arabia has abundant sunshine and land and is able to export solar power to its neighbors on a large scale. Saudi Arabia’s aim is to diversify its economy and become environmentally friendly at the same time, but it needs the assistance of the industrialized countries, in the form of direct investment and transfer of technologies, to ease the burden of the new climate regimen likely to be set forth by the successor treaty to the Kyoto Protocol. Thus, the Saudi government, which controls the petroleum and crude oil sector, is encouraging increased growth of the private sector—especially in power generation, telecommunications, alternative energy, natural gas exploration, and production of petrochemicals—in order to lessen the domestic economy’s dependence on oil exports and to increase employment and educational opportunities for the burgeoning Saudi population. Saudi unemployment is rampant, and the large youth population generally lacks the education and technical skills required by private-sector employers.

Cultural and economic change go hand in hand in Saudi Arabia. In 2009, Saudi king Abdullah appointed Nora bint Abdullah al-Fayez as the first female cabinet minister of the country as part of major cabinet reorganization, producing a cabinet with a more liberal bent. Nour Fayez became the deputy minister for women’s education, a milestone for a country where women gained the right to vote in 2004. In Saudi Arabia, women are 5 percent of the country’s workforce, the lowest percentage worldwide. The appointment of al-Fayez will not only empower Saudi women but will also enhance the recognition of the importance of women’s contribution to the workforce and their role in Saudi development.

King Abdullah also appointed a moderate, Prince Faisal bin Abdullah bin Muhammad, to be minister of education. These recent events reflect some of the aspirations of the Green Party of Saudi Arabia (GPSA), a political organization established in 2001 in a semi-clandestine fashion, because political parties are officially banned in Saudi Arabia. Both Saudi citizens and expatriates are known members of GPSA, which fosters the values of the worldwide green movement and its aims to protect the environment by supporting biodiversity, sustainability, and personal and global responsibility, while opposing the use of nuclear energy as harmful to the environment. In addition, the GSPA supports the creation of a constitutional monarchy that balances economic development with sustainability, along with promotion of environmentally friendly education, industry, and public policy, as well as gender equality in the political sector. The GPSA supports the Saudi government’s efforts gradually to reform political and social life, but it does not advocate the violent overthrow of the kingdom’s current institutions.

When King Abdullah died in January 2015, King Salman bin Abd al-Aziz Al Saud ascended to the throne. Since Mary 2015, Saudi Arabia has led a coalition of countries to restore Yemen’s legitimate government through military conflict. The resulting war has been criticized by the global community for causing a dire humanitarian crisis, including civilian casualties. Global oil prices fell in 2015 and 2016, reducing Saudi oil revenues. In 2016, Crown Prince and Deputy Prime Minister Muhammad bin Salman announced that the kingdom would sell shares in ARAMCO, the state-owned oil company, in order to increase revenue and attract foreign investment. That same year, the government of Saudi Arabia established Vision 2030, a range of socioeconomic reforms. In 2017, the kingdom coordinated with OPEC and other countries to cut its oil production in order to control supply and increase global oil prices.

Key Facts

• Population: 28,571,770 (July 2017 estimate; immigrants comprise 37 percent of total population)
• Area: 2,149,690 square kilometers
• Gross domestic product (GDP): $1.774 trillion (purchasing power parity, 2017 estimate)
• Greenhouse gas (GHG) emissions in millions of metric tons of carbon dioxide equivalent (CO₂e): 594 in 2013 (estimate)
• Kyoto Protocol status: Ratified, 2005

Bibliography

Agrawaler, S., and S. Frankhauser, eds. Economic Aspects of Adapting to Climate Change: Costs and Policy Instruments. Paris: Organization for Economic Cooperation and Development, 2008. Explains why efforts to reduce GHG emissions must parallel policies on adapting to the impacts of climate change.

“Each Country’s Share of CO2 Emissions.” Union of Concerned Scientists, 11 Oct. 2018, www.ucsusa.org/global-warming/science-and-impacts/science/each-countrys-share-of-co2.html#.W8dYbGhKg2w. Accessed 17 Oct. 2018.

Louer, L. Transnational Shia Politics: Religious and Political Networks in the Gulf. New York: Columbia University Press, 2008. Examines the Shiite populations of the Middle Eastern Gulf states, including Saudi Arabia, Iran, and Bahrain.

Ottaway, D. B. The King’s Messenger: Prince Bandar bin Sultan and America’s Tangled Relationship with Saudi Arabia. New York: Walker, 2008. Recounts Prince Bandar’s tenure as the Saudi ambassador to the United States for over three decades.

Sagar, A. D. “Wealth, Responsibility, and Equity: Exploring an Allocation Framework for Global GHG Emissions.” Climatic Change 45, nos. 3/4 (June, 2000): 511-527. Explores the framework derived from climate conventions and applied to OPEC nations.

“Saudi Arabia.” World Factbook, US Central Intelligence Agency , 26 Sept. 2018, www.cia.gov/library/publications/the-world-factbook/geos/sa.html. Accessed 17 Oct. 2018.