Energy policy pathways to inform climate policy in Saudi Arabia

Abstract

In 2022, Saudi Arabia's anthropogenic greenhouse gas emissions amounted to 810 million tons of CO2e. The country has pledged to cut its emissions by 278 million tons of CO2e per year by 2030. This paper contributes a modeling view on the climate-related effects of various energy policies on the Saudi energy system. We use an energy system model designed to represent seven sectors in the Saudi economy. In addition to a baseline, which entails the continuation of current domestic policies, we look at a scenario that incorporates some of the plans announced by the Saudi government. We also examine the baseline scenario with a cap on total CO2 emissions equal to those exhibited with the announced plans. The model then makes the necessary decisions to abate CO2. We find that the energy system contributes 130 million tons of CO2e to the nationally determined contribution amount in 2030. Also, a non-prescriptive scenario that caps energy-system CO2 emissions produces the same emissions reductions as the announced plans while lowering the present cost by 2030 by $70 billion. The corresponding implicit marginal abatement cost of CO2 approaches 35 $/tonCO2 by 2045. This cost would displace around half of crude and fuel oil use in the Saudi energy system.