Dundee university 12 11 burning oil to keep cool the

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Unformatted text preview: n trends and inhibiting measures to correct them. Internationally, this issue is receiving increasing attention, with several multilateral bodies calling for the elimination of fossil fuel subsidies. Saudi Arabia is a member of some of these bodies, including the G20 and the World Trade Organization. In 1992 it was one of the signatories of the UN’s Agenda 21, which committed countries to developing policies to address unsustainable patterns of consumption, including energy. It is also among the members of the G20, all of which committed themselves to phasing out ‘inefficient fossil fuel subsidies’ in the medium term in September 2009. Yet Saudi Arabia does not have an overarching policy on energy consumption and claims it has no inefficient fossil fuel subsidies. This report argues that there are compelling domestic reasons for Saudi Arabia to act on both energy consumption and price. These include the looming constraint on oil export capacity, the need to develop a post-oil economy, and threats to the health of inhabitants resulting from power outages and from increasing industrial and traffic pollution. The report examines the Saudi government’s current approach and demonstrates that this will not be enough to head off an economic crisis in the kingdom. So far, the focus has been on adding new energy supply. Chatham House simulations show that adding renewable and nuclear power based on current estimates will only delay the onset of an intractable fiscal deficit by a couple of years. An ambitious effort to increase energy efficiency is also essential. Our simulations show that this could buy the government more time in which to lower the economy’s dependence on income from oil exports. Ideally, efficiency drives would be supported by higher prices for energy. 225 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Energy Efficiency Solves 226 Oil DDW 2012 1 International help on energy efficiency is key to prevent domestic overconsumption Lahn, Research Fellow for Energy and Development at Chatham House and Stevens, Senior Research Fellow for Energy at Chatham House and Emeritus Professor at Dundee University, 11 Glada Lahn, Research Fellow for Energy and Development at Chatham House and Paul Stevens, Senior Research Fellow for Energy at Chatham House and Emeritus Professor at Dundee University, 12-11, [“Burning Oil to Keep Cool The Hidden Energy Crisis in Saudi Arabia,” The Royal Institute of International Affairs, Chatham House, www.chathamhouse.org/publications/papers/view/180825] E. Liu 1. Early action is critical given the lead times necessary for economic diversification and the introduction of new technology. As a guide, our simulation showed that a national energy intensity improvement goal of a 3% reduction year on year between 2010 and 2020 and a 2% reduction between 2021 and 2030 could buy an extra five years to enable the transition to lower dependence on oil exports. International experience can offer help and guidance to the government in pursuit of ambitious but practical targets for individual sectors. 227 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Energy Intensity Now 228 Oil DDW 2012 1 Saudia Arabia and Southwest Asia are rapidly becoming more energy inefficient Lahn, Research Fellow for Energy and Development at Chatham House and Stevens, Senior Research Fellow for Energy at Chatham House and Emeritus Professor at Dundee University, 11 Glada Lahn, Research Fellow for Energy and Development at Ch...
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