It’s not surprising that green economy is under serious discussion in Saudi Arabia nowadays, as the national development plan, Vision 2030, includes all the elements of a sustainable economy, based on investing the returns of natural resources and products, without depleting capital. But for a Saudi oil company to look into means of transitioning to a green economy is unprecedented, attesting to a deep shift in outlook.
"Green Growth Pathways for Saudi Arabia" was the subject of a workshop recently hosted by the King Abdullah Center for Petroleum Studies and Research in Riyadh. The meeting was attended by foreign experts, but most of the participants were Saudi ministry officials, heads of companies and university professors, under the age of 40. Whereas some may have expected that official enthusiasm for green growth to be limited to the Ministry of Economy and Planning, they were surprised that the enthusiasm of officials from ministries and companies responsible for energy, oil and industry sectors was no less. After all, the center hosting the event is primarily concerned with petroleum studies, and its officials understand that research into green growth is necessary to continue to benefit from oil, in the best possible way and for as long as possible. Young oil industry leaders stressed the need to invest oil income to build knowledge and technology, and diversify the economy.
The world is changing, and we have to change with it. When capitals such as Amsterdam, Paris and London announce that they will close their streets to fuel-powered cars in no more than 20 years, to protect people from air pollution, oil-producing countries must take that seriously. It is certain that this phenomenon could spread throughout the world before 2050 and that it will increase with the increasing pace of measures to reduce carbon emissions that cause climate change.
The change will not happen overnight and oil will remain a major component of the energy mix for decades to come, not only for cars, but also for aircrafts and giant ships, which need more time to develop new hydrogen-based engines, for example. Oil will also always have significant uses outside the energy sector, to produce boundless useful materials. Accordingly, is there better than a center specialized in petroleum studies to discuss these challenges?
"Vision 2030" highlights the need to diversify the economy so it doesn’t stay dependent on commodities with low-added-value which are vulnerable to global market volatility, while also noting supporting factors to make the diversification process a success, mainly by developing local manpower, encouraging innovation in a knowledge-based society, and the efficient use of natural resources.
The meeting in Riyadh was not aimed at convincing anyone of the importance of adopting green growth principles. These have already been adopted in Vision 2030, and the Kingdom has presented an ambitious list of specific national commitments to implement the sustainable development goals and to comply with the Paris agreement to reduce carbon emissions. In addition to diversifying the energy mix by introducing renewable energies in force, Saudi Arabia has begun serious measures to rationalize consumption. The national efficiency program was launched and the subsidy of electricity, fuel and water prices began to be phased out, with incentives for the less wealthy consumers. The figures presented at the meeting showed that energy consumption had fallen by 16 percent since the introduction of the efficiency program and new pricing policies. Saudi Arabia had set strict emission control standards for car engines as well as the consumption of household appliances. During the past year, some appliance shipments have been returned to their sources for lack of conformity. The opening of the metro soon in Riyadh will be a quantum leap on the road to reducing emissions from private cars.
In the area of improved water management and conservation of the remaining strategic groundwater reserves, measures have been adopted to reduce water-intensive agriculture, such as wheat and fodder. Transition to measures to rehabilitate depleted groundwater reserves may be required by pumping treated water into wells. Every single drop of water must also be treated for repeated use.
While the work on development goals was in progress, Saudi Arabia was not merely a spectator, but played a key role in putting energy poverty on the international agenda. Suleiman Al-Herbish, the Saudi who headed OPEC Fund for International Development (OFID) for 15 years, was the first to champion the right of all people to access modern and safe energy sources. The recent meeting in Riyadh agreed that technological developments in recent years have made it possible to deliver energy to all, from clean sources, whether renewable or conventional. Pollution under the guise of helping the poor, is no longer acceptable.
Green economy directs investments towards the sustainable management of natural resources, in order to increase their economic returns, create jobs and deliver benefits to all, while preserving the environment and ensuring the continuity of natural resources regeneration. Green growth requires necessary transformations in the Arab region, in four areas especially: energy transformation, where energy is produced cleanly and used efficiently, while also reducing its negative impact on health and climate problems, locally and globally. This is done in concurrence with an economic transformation that ensures sustainable growth that benefits all. There also has to be a shift in the perception of resources, by depending on the "income" of nature and the cessation of the depletion of the "natural" capital. Finally, the demographic transition, leading to population stability, and relying on local forces trained in the labor market.
The Arab region should strengthen its scientific and technological capacity and enhance the knowledge capabilities of its population, to effectively compete in the global economy and to avoid unrest. Today, the region faces one of two economic options: the traditional "brown" economy generates short-term growth in GDP, in parallel with the reduction of social and environmental "equity" stocks. Whereas the "green" economy provides long-term sustainable growth, based on stimulating economic development in parallel with improving social and environmental conditions.
Investing in a green economy provides balanced growth and the conditions for social stability and environmental sustainability, as well as economic prosperity. The Riyadh meeting indicates that Saudi Arabia has the intention, the plan and the ability to move in this direction. When the G20 meets in Riyadh in November 2020, Saudi Arabia will have much to offer, beyond just hosting.
Najib Saab is secretary-general of the Arab Forum for Environment and Development and editor-in-chief of Environment and Development magazine (www.afedmag.com).