MEC Friday Webinar Series -Environment Discounted: Energy and Economic Diversification Plans in the Gulf


The combination of oil price volatility and the accelerated energy transitions away from hydrocarbons to meet climate change mitigation measures have presented existential threats to the economies of hydrocarbon-dependent welfare states of the Gulf Cooperation Council (GCC).  These state rely on oil and gas not only in their exports to fund welfare distributive measures, but also domestically for highly-subsidized energy and water consumption.  In response, each GCC state announced economic development plans presented as avant-garde “Visions”—one tailored to each of the six GCC states— reflecting a future target of transformation away from oil and gas through energy and economic diversification and reform.  In a fundamental policy shift, GCC states implemented energy subsidy reform following the 2014 oil price declines, with varying degrees of success.  In another fundamental policy shift in October 2020, in preparation for COP26 in Glasgow, the UAE, Saudi Arabia, and Bahrain pledged to reach net-zero emissions by 2050 or 2060.  Beyond the economic pressures, GCC states also face environmental challenges owing to their highly subsidized energy and water consumption and emissions in an already-constrained environment owing to climate change.  This talk summarizes the state of the environment in the Gulf states and examines the role of the environment in the economic and energy diversification plans of their Visions.  It argues that the environment has had a limited role in the Visions, despite the state of the environment in the region, offering a striking difference with other regions.  The talk concludes with implications on the region’s long-term sustainability and success of proposed reforms.

Biography of presenter:

Dr. Manal Shehabi is an applied economist with expertise in economic, energy, resource sustainability & policy making in resource-dependent economies, focusing on the Middle East and Gulf regions.  She publishes in academic journals, books, and policy reports. Using economy-wide modeling and political economy, her research made important contributions to the analysis of economic and energy diversification, economic adjustments, decarbonization and hydrogen, and policy alternatives in Gulf hydrocarbon economies following the energy transition and oil price volatility.  Her research also impacted policy making, for example she constructed an economic model for policymaking in Kuwait, led or co-authored various policy reports (such as to the UNFCCC, KISR, the IPCC, and G20’s T20 Italy), and conducted capacity building for economic and climate policymakers in Gulf countries and beyond.  A polyglot, regularly advises policymakers & firms.