Is the GCC serious about averting climate catastrophe?

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Is the GCC serious about averting climate catastrophe?

Is the GCC serious about averting climate catastrophe?GCC members have talked a good game when it comes to combatting climate change, but are they willing to restrict oil exports to achieve these goals? (Photo by Yasser /AFP via Getty Images)

The wealth of the countries of the Gulf Cooperation Council (GCC) was built on the exploitation of hydrocarbons. Despite stated efforts by the governments of the GCC to diversify their economies, they remain reliant on the production and sale of oil and gas.

According to rating agency Moody’s, oil and gas production accounted for 45% of Kuwait’s GDP in 2019. In Qatar and Oman, it was approximately 35%, roughly 25% in the United Arab Emirates (UAE) and Saudi Arabia, and just under 15% in Bahrain. Moody’s predicted in June 2021 that the GCC countries will remain heavily dependent on hydrocarbons for at least another ten years.

This is bad news for the rest of the world, which recognises the need to wean itself off fossil fuels to avert climate catastrophe. It also brings into question efforts made by the GCC countries to reduce domestic carbon emissions, which are predominantly produced by the energy sector.

Revenues from hydrocarbons underpin the social contract in GCC countries: lower taxes attract talent and subsidies bring in other industries. Those subsidies will be needed to fund the growth of alternative industrial sectors in the face of global competition.

The introduction of a corporate tax in the UAE is part of efforts to raise government revenues in other ways, but changing the fundamentals of these economies will take time.

How much though are the GCC countries really trying to combat climate change?

A look at the targets they have set and the progress they have made since the Paris Agreement at the UN’s COP21 meeting in 2015 suggests climate policy is far from a priority for the region’s governments.

Global temperatures could be prevented from rising more than 2°C, according to new research published in Nature in April 2021, if all of the latest commitments by governments to reduce carbon emissions are met.

It would require all the conditional and unconditional pledges stated in countries’ nationally determined contributions (NDCs) to be delivered. To limit global warming to under 1.5 °C, the ultimate goal of the Paris Agreement, countries must go even further than their existing commitments, however.

The findings show that the system of NDCs, established as part of the Paris Agreement in 2015, which require countries to update their climate action plans every five years, has had some success in pushing countries to be increasingly ambitious with emissions reductions.

Yet NDCs remain hugely varied in their level of commitment, with many countries applying conditions to their plans and steering clear of binding obligations.

NDCs covering the six GCC countries have been characterised by a lack of detail and quantitative targets. Yet GCC governments increasingly want to be seen as part of the solution.

Saudi Arabia updated its NDC in October 2021, just in advance of COP26 in Glasgow. It aimed to make headlines with its pledge to meet net-zero carbon emissions by 2060, reduce or avoid greenhouse gas (GHG) emissions by 278 million tonnes of CO2 equivalent a year by 2030 and invest $187bn (SR701.31bn) in ‘climate action’.

Yet there was no mention of reducing oil exports, and in fact the country makes its climate commitments conditional on being able to continue to sell oil. According to the International Energy Agency (IEA), Saudi Arabia is the biggest net exporter of crude oil in the world and produced 12.3% of the world total in 2019.

With Russian’s invasion of Ukraine set to increase demand for oil and gas from the Gulf, governments of the region have a free hand to meet this rising demand by not tying themselves down with any commitments to limit production.

In a research paper on the impact of Covid-19 on climate policy in the GCC, Dr Mari Luomi argues Gulf countries have changed their perception of climate change over the past two decades, with it “no longer seen purely as a threat to future oil revenue or narrowly as an adaptation challenge. However, climate change is yet to become a defining issue on the regional agenda.”

One of the key metrics used to measure climate policy is emissions per capita and this paints the GCC in a particularly dim light. Based on meeting the targets set in NDCs submitted to date, only Trinidad and Tobago and Brunei rank higher for estimated per capita emissions in 2030 than Qatar. Kuwait, Oman, Bahrain and the UAE all follow closely behind.

Saudi Arabia is the only GCC country not ranked in the top ten for highest per capita emissions by 2030, yet it still ranks 15th out of 196 countries.

Gulf countries have long argued that measuring emissions per capita exaggerates the contribution of the region to climate change, given its relatively recent industrialisation, comparatively small populations, and outsized, energy-intensive economies.

Furthermore, Saudi Arabia and the UAE are set to reduce their emissions per capita by more than 30% by 2030, based on NDCs, which is a greater reduction than that planned by several major European economies, including Italy, Poland, Spain and Sweden.

Yet, by 2030, Saudi Arabia is still set to account for 1% of global emissions, the 18th highest in the world, and the GCC region will account for 3.2% of global emissions, with only China, India, the US and Russia contributing more.

In addition, new research has called into doubt the accuracy of national reporting in the region. Data from the European Space Agency (ESA), first published by Climate Home News, shows that methane emissions from the fossil fuel sector in Gulf states is likely many times higher than reported in national GHG inventories.

ESA satellite measurements of atmospheric carbon dioxide and methane and in-situ measurements of nitrous oxide were used to calculate emissions and compare them against those reported by states.

While reported methane emissions in 2016 totalled just 0.84 teragrams of methane (TgMH4), the satellite data estimates that as much as 9TgMH4 was produced by GCC countries that year. While reported emissions were trending downwards towards the end of the last decade, the satellite data suggests they were rising.

Saudi Arabia is the only GCC nation to have submitted a second NDC and although it has increased its targets for emissions reductions, the country was strongly criticised for not committing to any reduction in oil production.

The UAE and Saudi Arabia have both set net-zero targets for 2050 and 2060, respectively, but independent research group Climate Action Tracker argues that their plans “lack critical details on scope, target architecture and transparency”.

All the GCC nations say in their NDCs that they support the UN Framework on Climate Change but are also keen to highlight their economic reliance on hydrocarbons. Climate policy is framed as part of a wider economic transformation, and both climate change and efforts to limit it are characterised as a threat to their countries.

All the GCC countries except Oman mention serious domestic environmental threats posed by climate change in their NDC submissions, yet these potential impacts appear overstated. The Global Climate Risk Index compiled by research organisation Germanwatch shows Oman is the only GCC country that ranks in the top 100 for countries most at risk from climate change. Qatar ranks 180th.

Almost all of the GCC countries have included bold renewable energy targets as part of their plans to reduce emissions, yet the UAE, or more specifically Dubai, is the only location in the region to have built any significant renewable energy capacity to date.

Saudi Arabia plans to be the regional leader for renewables, with 58.7GW operational by 2030, but its national programme is only now moving forward after a couple of false starts.

None of the region’s national oil companies have invested heavily in renewable energy, however, unlike private oil majors such as BP and Total, which have accelerated their exposure to non-oil and gas assets in recent years.

The activities of the GCC oil companies remain the elephant in the room. While GCC countries have made efforts to embrace renewable energy and other low-carbon technologies such as hydrogen production, they continue to export around the world the root cause of climate change.

Qatar is second only to Russia in net exports of natural gas, with a total of 127 billion cubic metres, according to the IEA, and has been expanding its capacity to produce liquefied natural gas in recent years.

While the Russian invasion of Ukraine may have increased global demand for oil and gas from the GCC, over the medium term it may also have accelerated a global move away from hydrocarbons, as the dangers of dependence on imported energy have been brutally exposed.

This makes the GCC’s partial participation in climate action seem even more unwise. The need for economic diversification may become less of a long-term goal and increasingly an urgent necessity.