A Saudi royal is predicting an end to the oil era and is preparing the realm’s economic shift to a post-fossil fuel age. It may sound like the subplot of a sci-fi novel set in a not-too distant apocalyptic future, but this is exactly what deputy crown prince Mohammed bin Salman indicated was happening during an interview with Saudi TV channel Al Arabiya. ‘We have a case of addiction to oil in the Kingdom of Saudi Arabia’, said the 31-year-old. Since the Arab country’s budget is much too dependent on crude revenues, the economy has to be reformed. For different, yet coincidental reasons, it is what many other economies of the world are also having to do.
The Paris Agreement dictates a systemic energy revolution in order to hold ‘the increase in the global average temperature to well below 2°C above pre-industrial levels’. This translates into the bold actions needed to enter the post-oil era, well before the last drop of oil is gone. Not that we are completely off-track: according to the World Resources Institute, 21 countries – including the UK – have decoupled their economic growth from carbon emissions in the last decade and a half. It is good news, even though it is mostly due to the shrinking industrial sector’s share of its respective national economies. In the US, it was largely propelled by the shift from coal to shale gas in electricity generation.
“If our economies were to price fossil fuels correctly, solar and wind energy would be competitive overnight”
The Paris treaty’s ambitious climate goals demand radically new economic policies. While it’s indeed possible for the markets’ invisible hands to push clean-tech investments forward, the gateway to a post-oil era is made of laws, regulations and, well, common sense.
Since you can’t have your cake and eat it, why keep on subsidising the fossil fuel industry to the tune of $550billion a year, four times the money spent on sustaining renewables? If even Prince Mohammed vows to reduce subsidies, why is the US squandering $20billion a year in tax breaks and incentives to oil, coal and gas?
If humankind is serious about fighting climate change, why wait on putting a price on carbon emissions? Nowadays, oil is ultra-cheap as its price doesn’t include the collateral damages it provokes. If our economies were to price fossil fuels correctly, solar and wind energy would be competitive overnight.
This was published in the June 2016 edition of Geographical magazine.