Written by Sankalp Wadhwani
Research Intern,
Jindal Centre for the Global South,
O.P. Jindal Global University, India
Email: 21jsia-swadhwani@jgu.edu.in
Introduction
Saudi Arabia has transformed from an Observant nation to a proactive one in dealing with climate change. It has taken various initiatives per its Vision 2030; for instance, the Saudi Fund for Development has invested in various sustainable development projects and 35 loans totaling $1.3 billion to support renewable energy projects in 23 nations (Saudi Arabia Stresses Importance of Tackling Climate Change, 2022). More importantly, at the United Nations Global Climate Change Conference (COP27), Saudi Arabia outlined 66 measures as a component of its environmental plan (Saudi Arabia Presents 66 Initiatives to Tackle Climate Change at COP27 in Egypt, 2022). In the heart of the Middle East, where oil is abundant, Saudi Arabia is responsible for about 13 percent of the world’s oil exports and emits 1.52 percent of global carbon dioxide due to its high domestic oil use (Hanania, 2023). Saudi Arabia is ranked among the lowest contributor to greenhouse gas emissions. However, it has contributed to climate change by supplying oil to developing nations like India and China, among the highest greenhouse imitators. Climate change has posed a threat to Saudi Arabia on two levels. Firstly, there are high chances of floods in the coastal areas due to rising sea levels or heavy rainfall, as evident in the 2009 and 2018 floods. In addition, water scarcity and rising temperatures will impact Saudi Arabians’ daily lives. For example, according to the Climate and Atmosphere Research Center, about 600 million people in the Middle East and North Africa are at risk of heat exhaustion and heart attacks due to heat waves by the start of the next century (Shaheer, 2023). Secondly, from an economic perspective, the reduction in oil consumption in other countries will impact Saudi Arabia’s expenditure, as gas and oil make up 40 percent of Saudi Arabia’s GDP. This will hamper their ability to desalinate water and import food for their citizens. As a result, Saudi Arabia has also raised its value-added tax rate from 5% to 15%, providing a new source of domestic income (Yousef, 2023).
To tackle climate change and its challenges, Saudi Arabia joined the United Nations Framework Convention on Climate Change (UNFCCC) in 1994 and, in 2016, ratified the Paris Climate Agreement (2015) (Al-Sarihi, 2021). More importantly, it launched Vision 2030 the same year after the international community signed the adopted Sustainable Development Goals (SDGs). The main goal of the Kingdom’s Vision 2030 plan is to diversify the economy and create a society that is not solely dependent on oil as its income. It is a timely pivot, given that greenhouse gas emissions must be reduced by 45% by 2030 and reach net zero by 2050 to achieve the Paris Climate Agreement’s goal of limiting global warming to 1.5° Celsius (Yousef, 2023).Saudi Arabia Vision Plan 2030 has plans aligned with (SDGs 2, 6, 7, 11, 12, 13, 14, 15); its commitment to SDG 13 shows it has committed itself to the climate change challenge and is transforming itself to show the world that Saudi Arabia will be relevant without oil as well.
Saudi Vision Plan 2030 and Paris Agreement
Under Saudi Arabia Vision 2030, several steps have been taken to meet the Paris Agreement and SDG goals.
In a UN Security Council press, Saudi Arabia’s diplomat Abdulaziz M Alwasil (permanent representative of the Kingdom of Saudi Arabia to the United Nations) stated, “Saudi Arabia has launched two initiatives — Green Saudi Arabia and Green Middle East — implementing a circular carbon economy, planting trees and protecting coral reefs” (With Climate Crisis Generating Growing Threats to Global Peace, Security Council Must Ramp up Efforts, Lessen Risk of Conflicts, Speakers Stress in Open Debate | UN Press, 2023).Over the past seven years, Saudi Arabia has invested approximately $400 billion into renewable energy, with plans to invest an additional $30 billion in the next two years (Shaheer, 2023). In these projects, Saudi Arabia has invested heavily from profits earned by oil exports, whose price was increased due to the Russia-Ukraine war, and to fund these projects, Saudi Arabia will continue this approach. Some notable projects for climate change are the NEOM and the Middle East Green Initiative.
Under NEOM, the Kingdom aspires to produce 4 million tons of green and blue hydrogen annually and set up the largest CCUS complex, with a capacity of 44 million tons annually by 2030 (Saudi Arabia – High-level Segment Statement COP 26, 2021).
Saudi Arabia has also submitted a Nationally Determined Contribution (NDC) report to the UNFCCC containing an enhanced GHG emissions reduction target. The NDC aims to reduce emissions by 278 million tons of carbon dioxide equivalent (MtCO2 e) annually by 2030 (Kingdom of Saudi Arabia / Updated Nationally Determined Contribution / 2021, 2021). The objectives of the UN Framework Convention on Climate Change and the Paris Agreement will be pursued in this report to maximize long-term benefits while reducing possible adverse effects. Saudi Arabia has committed to the Paris Agreement that it will generate 50 % of its electricity from renewable energy sources and 50 % from natural gas by 2030 under the Paris agreement.
The Kingdom is also a member and active participant in major international initiatives such as the Global Methane Initiative, Mission Innovation, Clean Energy Ministerial, and Net-Zero Producers Forum (Kingdom of Saudi Arabia / Updated Nationally Determined Contribution / 2021, 2021).
To reduce GHG emissions and meet the goal set by the Paris Agreement, Saudi Arabia also proposed a circular carbon economy (CCE) approach during its G20 presidency in 2020, endorsed by all G20 countries. The CCE specifically promotes the “three Rs” of the circular economy concept: reduce, reuse, and recycle (carbon) and adds a novel, fourth R, remove (Al-Sarihi, 2021).The rest of the G20 countries adopted the CCE following Saudi Arabia’s G20 presidency.
Saudi Arabia’s NDC report has received criticism on its baseline Saudi Arabia’s Vision 2030 and its commitment to fulfilling the Paris Agreement. Like the previous version, the updated NDC mentions that the reduction target is contingent on international climate action under the Paris Agreement, not causing an “abnormal burden” on its economy (Targets, n.d.).This will be nowhere near the Paris Agreement set standards to reduce 45 percent of their emission by 2030 to keep global warming to a maximum of 1.5°C. The baseline has two scenarios. In the first scenario, Saudi Arabia will use hydrocarbon exports to contribute to its future projects. In the second scenario, Saudi Arabia will use the hydrocarbons domestically if global hydrocarbon exports decline. As Saudi Arabia has not yet communicated the business as usual (BAU) range for its NDC target, based on this BAU range, and due to the uncertainties around the contributions of emissions reductions from land use and forestry, it is projected Saudi Arabia’s NDC emissions level to be anywhere between 520–800 MtCO2e in 2030 (Targets, n.d.).More importantly, there needs to be more data available on the implementation of Vision Plan 2030 to assess whether it will be able to meet the Paris Agreement and SDGs successfully.
Is Saudi Vision an appropriate model for Middle Eastern states? What are its geopolitical implications in the Middle East?
Saudi Arabia is not the first country to become independent of oil reliance. Earlier, the UAE has also pursued this policy to make itself a technological and tourism hub in which Dubai is the most successful emirate to offset declining oil. However, Vision Plan 2030 will be closely watched as it is an ambitious plan with a large young Saudi population. The Kingdom of Saudi Arabia has embarked on comprehensive economic reforms with sustainability as one of its core pillars (Kingdom of Saudi Arabia / Updated Nationally Determined Contribution / 2021, 2021 ).The projects undertaken by Saudi Arabia require high investments, and many developing nations, such as Saudi Arabia, need to invest more assets. More importantly, under Vision 2030, Saudi Arabia has announced it aims to plant 450 million trees by 2030—with a long-term target of 10 billion trees and collaborative efforts to plant 50 billion trees in the Middle East. If Saudi Arabia plans to rely heavily on an increased forest sink, emissions in other sectors, such as energy and transport, could increase significantly. Thus, it is unclear whether it will achieve 27.3 GW and 57.8 GW of installed renewable electricity capacity by 2023 and 2030 set by the Paris Agreement pathways.
Moreover, despite its sizeable local talent pool, Saudi Arabia’s extensive use of consulting firms may prove problematic when the money runs out (Yousef, 2023). Therefore, the Saudi Vision Plan 2030 has been considered a mere plan to diversify its economy with expensive projects to save itself from the changing dynamics of the world rather than a plan to tackle climate change specifically. More importantly, this is clear from the fact that only oil-rich countries like Saudi Arabia, which can fund expensive projects akin to Saudi Arabia, have adopted the plan. At the same time, developing nations that comprise most of the world’s population have not.
Vision 2030 has important geo-implications, as it requires substantial foreign investment; thus, it brought peace in the Middle East, as the Iran-Saudi deal took place, giving a detente in their tense relations. Bashar Al-Assad’s Syria was welcomed back into the Arab League after more than a decade of isolation, and Yemen peace talks are ongoing between Saudi Arabia and Houthi rebels backed by Iran to maintain peace in the region for foreign investments. More importantly, the vision has invested vastly in other nations. The Kingdom additionally announced a first-of-its-kind investment fund to support two regional initiatives—clean fuel solutions for cooking and the Regional Investment Fund for CCE technology solutions. With an estimated investment of about SAR 39 billion (US$10.3 billion) in these two initiatives, the Kingdom will contribute to financing approximately 15 percent of it (KSA Business: Saudi Arabia Unveils Key Initiative to Fund Circular Carbon Economy, 2021).Vision 2030 has fostered a strong sense of nationalism and hope for a better future among the Saudi people, especially the youth (Al-Ahmad, 2023).
BIBLIOGRAPHY
Al-Ahmad, N. B. H. (2023, April 17). Saudi Vision 2030: the hope of Middle East nations. Arab News. https://arab.news/gs2j4
Al-Rashed, A. (2023, February 5). Saudi Arabia in the spotlight for its climate change focus. Arab News. https://arab.news/4esvc
Al-Sarihi. (2021, November). Saudi Arabia and the Paris Climate Agreement. King Faisal Center for Research and Islamic Studies. https://www.kfcris.com/en/view/post/363
KINGDOM OF SAUDI ARABIA / UPDATED NATIONALLY DETERMINED CONTRIBUTION / 2021. (2021). https://unfccc.int/sites/default/files/resource/202203111154—KSA%20NDC%202021.pdf[2]
KSA Business: Saudi Arabia unveils key initiative to fund circular carbon economy. (2021, October 25). https://www.gdnonline.com/Details/981246/Saudi-Arabia-unveils-key-initiative-to-fund-circular-carbon-economy
Saudi Arabia – High-level Segment Statement COP 26. (2021, November 11). https://unfccc.int/sites/default/files/resource/SAUDI_ARABIA_cop26cmp16cma3_HLS_EN.pdf[3]
Saudi Arabia presents 66 initiatives to tackle climate change at COP27 in Egypt. (2022, November 12). Arab News. https://arab.news/wgpym
Saudi Arabia stresses importance of tackling climate change. (2022, October 16). Arab News. https://arab.news/naz8g
Shaheer, A. (2023, May 27). Role of Renewable Energy in Mitigating Climate Change as part of Saudi Vision 2030. Modern Diplomacy. https://moderndiplomacy.eu/2023/05/28/role-of-renewable-energy-in-mitigating-climate-change-as-part-of-saudi-vision-2030/
Targets. (n.d.). https://climateactiontracker.org/countries/saudi-arabia/targets/
With Climate Crisis Generating Growing Threats to Global Peace, Security Council Must Ramp Up Efforts, Lessen Risk of Conflicts, Speakers Stress in Open Debate | UN Press. (2023, June 13). https://press.un.org/en/2023/sc15318.doc.html
Yousef, R. A. T. M. (2023, June 24). Saudi Arabia’s great transformation and its impact on Middle East. The Business Standard. https://www.tbsnews.net/thoughts/saudi-arabias-great-transformation-and-its-impact-middle-east-655294
The opinions expressed in this article are those of the author (s). They do not purport to reflect the opinions or views of the Jindal Centre for the Global South or its members.
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