In Saudi Arabia, the tension between economic development and climate mitigation helps explain why mitigation has fluctuated as a national policy priority.

 

Saudi Arabia’s economic development flagship program is Vision 2030. The initiative seeks to diversify the economy away from oil through mega construction projects like the futuristic city NEOM and soft-power initiatives like hosting the football World Cup. It also aims to decarbonize electricity to reduce the country’s enormous domestic oil use and to increase the share of renewables in powering its electric grid. However, it seeks to achieve these goals and finance these costly projects by selling more oil to fund its transition from a petrostate to a green country. Moreover, the Saudi government also pushes the idea of a “carbon circular economy,” which holds that oil is not the problem. Still, it has been heavily investing in carbon capture and storage (CCS) technologies, ostensibly to reduce emissions while continuing its fossil fuel sales. Yet the nascent stage of CCS technology cannot meet any substantial share of the emissions reductions needed. Pursuing these policies means the Kingdom has consistently blocked global efforts to transition away from fossil fuels, which are crucial to achieving the 1.5 °C climate scenario. In fact, Saudi Arabia’s economic priorities hinge on maintaining steady demand for its oil and gas in Africa and elsewhere and on driving up the use of fossil-fuel-powered cars, buses, and planes, with dire consequences for the people in the desert kingdom and the whole world.

In Saudi Arabia, the tension between economic development and climate mitigation helps explain why mitigation has fluctuated as a national policy priority. For decades, growth depended heavily on oil revenues, making aggressive emissions reductions appear to conflict with fiscal stability, industrial competitiveness, and employment. As a result, mitigation was often framed as a constraint rather than a driver of development. Under Vision 2030, this framing has begun to shift. However, mitigation still competes with short-term priorities such as energy affordability, industrial expansion, and export revenues, which can slow policy ambition or implementation.

Bridging these barriers is increasingly feasible when mitigation is aligned with diversification, industrial upgrading, and long-term revenue resilience. One example is large-scale renewable energy deployment, such as the Sakaka solar project, which supports emissions reduction while creating local jobs, lowering domestic fuel use, and freeing oil for export. A second example is the development of low-carbon hydrogen, particularly blue and green hydrogen, which leverages Saudi Arabia’s energy advantages to create new export markets aligned with global decarbonization trends. Together, these approaches reframe climate mitigation as a tool for economic transformation rather than a competing objective.

This Post was submitted by Climate Scorecard Saudi Arabia Country Managers, Abeer Abdulkareem and Amgad Ellaboudy.