Climate change is a global phenomenon and requires coordinated global responses. It is extremely important that all nations, including major Gulf Arab oil producers, participate in the effort and implement policies to contain greenhouse gas (GHG) emissions.

At the same time, all realistic scenarios of global energy supplies point to the continuing use of fossil fuels. It may already be a huge challenge to contain the use of coal - the worst emitter of CO2 unless coupled with carbon capture and sequestration (CCS) - and this is probably only achievable with greater reliance on oil and, especially, gas. Thus the Gulf countries will be called to continue exporting fossil fuels and/or various products derived from the same.

The countries of the Gulf Cooperation Council (GCC) and other producers thus face a dilemma between continuing development and use of their fossil fuel endowments and increasing reliance on low carbon sources, such as nuclear, solar or wind. This collection of essays explores various facets of this dilemma.

In the first chapter, Giacomo Luciani proposes a political economy analysis of energy prices and policy motivations in the Gulf. He argues that energy prices are in most cases not “subsidized”, and the opportunity cost of domestic consumption of hydrocarbons should not be measured by the difference between domestic and international prices. The economic case for substituting low carbon sources for the domestic consumption of hydrocarbons is not as cogent as frequently maintained in the short run, although extrapolating current trends into the future leads to unacceptable outcomes. He also argues that different low carbon technologies are differently adapted to the prevailing decision-making processes in the region and public-private sector relations.

In Chapter 2, Bianca Sarbu asks: Why have oil producer countries in the Middle East's Gulf region pursued different policies in the upstream sector since the era of oil nationalizations? She explores various possible explanations of differing policy approaches, from the geologic-technological, to the economic and politicoinstitutional.