Poised on the cusp between economic and climate disaster, and an amazing commercial opportunity, Gulf-based petroleum giants realize today that the golden age of oil is about to end, Dan Rabinowitz
Lee Yaron Feb. 11, 2021
Dan Rabinowitz did not set out to write an optimistic book. One of Israel’s leading researchers of the environment, he’s familiar with all the gloomy analyses and forecasts about the climate crisis. His work was going to be a depressing study of the particularly nasty future that awaits the Middle East in the decades ahead, featuring extreme climatic conditions, weak political regimes and inequality that will generate wars and the collapse of states: “The Middle East as an especially bleak microcosmos under the influence of the impact of climate change on the world,” as he puts it.
The dark predictions are there (and constitute a hefty part of the book that resulted), but as Prof. Rabinowitz progressed in his writing, the possibility of a different outcome also loomed. Moreover, if it materializes, it will boost not only the Middle East but also the global effort to cope with climate change.
“I look at the future very apprehensively and with a great deal of pessimism,” he tells Haaretz in an interview. “But when I see slivers of optimism I’m drawn to them like a moth to a flame.”
To explain the surprising source for that optimism, he goes back 150 years, to the story of William Durant, who was born into an affluent Massachusetts family in 1861. At 25, he established a carriage company; a year before he celebrated his 30th birthday it was already the largest manufacturer of horse-drawn vehicles in the United States. Confident of his fortune and status, Durant was skeptical when automobiles appeared on the scene in the 1890s. He was turned off by the noise, revolted by the smell and predicted a future replete with accidents. So profound was his revulsion from the new invention that he forbade his daughter to travel in an automobile.
But within a few years Durant realized that cars weren’t going to go away, and decided to switch course. In 1904, he bought the Buick Motor Company, joined forces with Louis Chevrolet, and together they founded General Motors. Most carriage makers in Europe and North America didn’t survive the transportation revolution, but Durant mustered the infrastructure, reputation and experience he’d accumulated and rode the new wave.
Today a small number of people are facing a similar choice: Among them are the leaders of the Persian Gulf states who have amassed legendary fortunes in the oil-producing era of the past decades. They can choose whether to set the world on a path to end the era of “black gold” or to battle over their dwindling profits in a dying industry. Rabinowitz is convinced that there are good reasons for thinking these men will choose the first option. The difference between them and Durant is clear: Not only their private fortunes and the lives of their own citizens, but the lives of billions of humans, and of animals and plants too, across the planet, depend on their decisions.
That scenario forms the heart of his new book, “The Power of Deserts: Climate Change, the Middle East, and the Promise of a Post-Oil Era” (Stanford University Press). Formerly head of Tel Aviv University’s Porter School of Environmental Studies and chairman of Greenpeace Mediterranean, Rabinowitz is a professor of sociology and anthropology at the university.
He himself was surprised at the optimistic potential he has witnessed in the past year. “Before coronavirus, the notion that 200 conservative, despotic Arab men could play an active role in stopping climate change was as counterintuitive as was the view, in early 1989, that [Mikhail] Gorbachev would undo the Soviet Union or that [Nelson] Mandela would emerge from prison to nullify apartheid and reinvent South Africa. Yet here we are…,” he writes in the hope-filled lines that conclude the book.
Outbreak of idealism
Rabinowitz’s fantastic scenario doesn’t assume that Gulf leaders will be driven by an outbreak of idealism or by a profound concern about Earth’s future. On the contrary, the reasons are appallingly materialistic. The six wealthy states – Saudi Arabia, United Arab Emirates, Kuwait, Bahrain, Oman and Qatar – that between them produce 30 percent of the world’s oil, are likely to face economic collapse in the future.
With the ongoing decline in the price of petroleum in recent years, it’s clear even to the petroleum giants that the golden age of oil is about to end. In February 2020, well before the dramatic consequences of the coronavirus pandemic were known, the International Monetary Fund warned that the Gulf principalities were risking a loss of $2 trillion within 15 years owing to the decline in the demand for oil.
The pandemic has only accelerated this process. Last year was one of the most difficult in the history of the oil industry. On April 20, 2020, the price of oil stood at zero, and for the first time ever even dipped below that. The decline into the red was due to the fact that the petroleum reserves were almost full, and purchasers had no room to store any more of it. In their desperation, the suppliers were ready to pay anyone who would take the oil off their hands.
The price subsequently recovered to a degree, but the doomsday feeling lingered. According to official estimates put out by Saudi Arabia itself, the crisis cost the country $80 billion in lost revenues last year. Industry players – from the United States via Norway all the way to China – slashed their investment forecasts by billions of dollars. The updated prognosis of BP stated explicitly that 2019 was the turning point year. “The world may never recover its thirst for oil,” CNN headlined.
In addition to the fear of economic turmoil, the Gulf states face concrete social and environmental perils. In much of their territory temperatures are liable to rise within decades to a level unsuitable for human habitation. Researchers anticipate that in 2060 the temperature in locales such as Doha, Dubai and Abu Dhabi will stand permanently above 35 degrees Celsius (95 degrees Fahrenheit). The heat stress index will be so high that it will be difficult to support life in these regions, a situation predicted to be especially acute in Kuwait, where the average daily temperature in the capital, Kuwait City, is expected to rise during the next four decades to 43 degrees (109 degrees F.). That figure, in which the cooler night hours are already factored in, means that in the summer months the temperature at midday will hit 50 degrees (122 degrees F.).
However, for the Gulf states, the flip side of a bleak economic and climate-related future is a potential economic and environmental opportunity. For, to their great good fortune, they are blessed not only with “black” gold but also with a “yellow” gold that is both clean and environmentally friendly. These states all enjoy more than 300 days of sunshine annually, with levels of radiation twice as high as the global average, as well as abundant unused land on which solar power stations can be built. They also possess vast financial resources for potential investment. Together, these elements create an extraordinary solar potential that European countries can only dream of.
Thus Gulf leaders are striding in a new direction today, because they realize they have no other choice. Already in 2016, Saudi Crown Prince Mohammed bin Salman announced “Saudi Vision 2030,” a central aim of which is to shatter his country’s dependence on oil. In January, bin Salman announced a follow-up plan: establishment of a desert-based city, without cars, roads or harmful emissions. This 170-kilometer long project, known as “The Line,” is part of a plan originally declared in 2017 for the city of Neom, due to cover over 26,000 square kilometers (more than 10,000 square miles) in the country’s northwest.
Leaders of Persian Gulf states who made fortunes in oil are facing a dilemma: To set the world on a path to end the era of “black gold,” or to battle over their dwindling profits in a dying industry.
“Why should we sacrifice nature for the sake of development?” bin Salman said last month, citing the rises in sea levels and in carbon emissions that threaten the future of the whole planet. In addition, the Saudis are building another city on the Red Sea, which is planned to have an immense facility to produce hydrogen (a green fuel) from solar energy.
Like Saudi Arabia, the Emirates have also been investing billions in recent years to develop renewable energy sources. The UAE is actively seeking to diversify its sources of revenue by pivoting away from oil. Its aim is to become a global center of the green economy and of green technologies, as well as of policy making relating to sustainable energy, agriculture, transportation and other fields. The goal of the emirate’s energy strategy is to increase the proportion of clean energy it produces from 25 percent to 50 percent by 2050, and to reduce its carbon footprint by 70 percent. Last year the world’s largest single-site solar project, Noor Abu Dhabi, became operational; it’s expected to supply electric power to about 200,000 homes and to offset seven million tons of carbon emissions a year.
But the Gulf states are engaged in more than the development of renewable energy within their own borders. Understanding that the transition to a green economy can generate business opportunities worth billions of dollars, their investment funds have already begun to put money in environmentally progressive enterprises in other countries. In the past few weeks alone, for example, an Abu Dhabi-based fund has decided for the first time to invest hundreds of millions of dollars in the establishment of solar fields in Israel.
Complete stop
On the cusp between economic and climate disaster, on the one hand, and unprecedented business possibilities, Rabinowitz delineates in his book a three-part window of opportunity for the leaders of the Gulf states. In the first stage, they need to expedite the transition of their own energy economies to renewable sources, particularly in the form of solar stations to produce electric power. Though all the Gulf states have begun to move in this direction, they are progressing slowly (with the exception of the UAE). Second, these countries need to shift their large oil and natural gas market in the direction of renewable energy and thereby become key players in that field. And then, at the right moment, when they hold a significant slice of the global renewable energy market, they need to bring local oil and natural gas production to an almost complete stop. That dramatic move will drive up the price of those commodities worldwide and will testify definitively to the superiority of cheap, renewable energies – and thus actively bring about the end of the era of black gold.
Why would the wealthy oil-producing states take such a dramatic step? Because it will pay them to do so. Says Rabinowitz: “The ability of these leaders to determine when to yank 30 percent of the world’s oil from the market affords them a major economic advantage. The decision to precipitate the collapse of the oil industry is still a long way off. If they opt for that course, it will only happen, of course, after a number of years in which they have entrenched their status in the renewable-energy market through massive investments around the world, and then they will profit from the upheaval they themselves will orchestrate. No other country or group of countries holds a large enough slice of the oil market to allow them to determine the date, scale and pace of a global development worth trillions.”
Thus, instead of placing obstacles in the way of the energy revolution, the Gulf states might actually spearhead it. They have the capability to translate their strength in the fading oil market into a similarly powerful force in the burgeoning market of renewable energy sources. “Although a thrust to accelerate the current energy revolution, which has already begun, will be implemented for their own selfish reasons,” Rabinowitz explains, “it could benefit all of humanity.”
We are already deep into the climate crisis. Even if the oil barons put an end to the oil era themselves, how dramatic will its influence be?
“In the race against time we’re now in, every year is important. Even every month. With each year they move up the renewable energy revolution, the leaders of the Gulf states can save millions of lives across the globe and gain precious time for all of us. They are such major players that they can completely transform the game. Only people who are sitting on such large percentages of the oil market can foment a development on that scale.”
Extreme inequality
Rabinbowitz shifts uneasily when confronted with questions that he knows his book will raise: Are countries that exploit millions of people and are characterized by extreme inequality supposed to do the work in which the liberal democracies have so far failed? Are we to pin our hopes for the salvation of human civilization on greedy despots who want to preserve their vast fortunes?
Greta Thunberg represents the correct solution achieved by democratic, transparent and egalitarian means. But that solution is not materializing. Perhaps we need to be helped by people who espouse completely different values and with whom we are very uneasy.Rabinowitz
“The strategy I am proposing here gives a tailwind to a very problematic set of values,” he admits. “I welcome this discussion.”
What you’re suggestion is that we need to change tack and look to tyrants for the solutions?
“Greta Thunberg and Mohammed bin Salman embody two tracks for rescuing the world from climate chaos. Greta represents what the environmental movement has stood for over the past 30 years: the correct solution achieved by democratic, transparent and egalitarian means. Greta is the logical conclusion, she is the embodiment of everything I’ve believed in all my life and still believe in. But the years are passing, and in the meantime our environmental vision – that we will achieve the desired solution by democratic means and with heightened equality – is not materializing. Accordingly, I say, cautiously, that perhaps we need to be helped – but not rely on them totally – by certain breakthroughs that will come from people who espouse completely different values and with whom we are very uneasy.
“It’s a real dilemma,” Rabinowitz continues. “It gives rise to a trenchant moral debate, of which I am a part. I am not saying, ‘Let’s postpone the philosophical considerations, first of all save the world and afterward argue about people whose personal fortunes are in the trillions and who live in countries where many people lack human rights.’ This is exactly the issue: Are we in such a desperate situation, in which time is so decidedly against us, that we must now grasp at every straw? If the house is burning and everyone in the neighborhood comes running with pails, and the most disliked guy in the neighborhood also shows up and has a hose hooked up to a large supply of water, and he can save everyone – do we set aside our criticism of him during this emergency situation in order to extinguish the fire?
“We need to understand that there are situations in which precisely the capabilities of totalitarian rulers, and the freedom of action they are afforded, might transform them into agents who can also assist in the global project we want to advance, with all the problems this entails. I don’t want to sweep this issue under the rug. Because of the specific circumstances of the six countries in question, they might be able to untie the Gordian knot that the global system has failed to loosen. We must not lose sight of the fact that we are facing a challenge that we as a human species have never come up against.”
From the perspective of Rabinowitz, curing the ills of capitalism is a luxury we can’t afford at the present.
“In a world where the clock is not ticking toward collapse, it would be logical to first overturn economic thinking so that the models by which the economists calculate the world would also take into account the natural system – but there’s no time for that,” he asserts. “Thus, I am prepared temporarily to make use of capitalist impulses in their most unbridled form as catalysts.”
At the same time, Rabinowitz admits that it’s crucial to rethink the entire economic system around us. “If we succeed in stabilizing the climate but leave capitalism intact, we will only be inviting the next incarnation of the crisis.”
From this point of view, reliance on the Gulf states is not essentially different from reliance on the United States: All act of out selfish considerations and on the basis of cold capitalist thinking. This is in fact one of the reasons Rabinowitz is also optimistic about the new U.S. president.
“Biden understands that the United States is very vulnerable energy-wise in an era of plunging oil prices,” he notes. “He too wants the country he leads to continue to maintain its energy independence, and for that it has to move to renewable energy sources. The United States lost the most critical years under Trump. It has the ability to fill in the gaps – and it will do so for totally egotistical reasons. But even though Biden works within the neoliberal paradigm, he and [Vice President Kamala] Harris are still the first truly optimistic development in this sphere in a very long time.”
The crisis is here
There are situations in which the capabilities of totalitarian rulers might transform them into agents who can assist in the global project we want to advance. We must not lose sight of the fact that we are facing a challenge that we as a human species have never come up against.Rabinowitz
But even if bin Salman, Thunberg and Biden come together in an unprecedented effort and succeed in bringing about a reduction in greenhouse gas emissions into the atmosphere, it should be obvious to all that the world is already in the throes of a dire emergency. The tremendous population growth in some of the most vulnerable countries], the disappearance of tens of thousands of species of plants and animals, the destruction of their habitats and of the natural regions that sustain them (half of the world’s rain forests have already been decimated) – all are already faits accomplis.
Rabinowitz: “I would venture an opinion that we are at a historic Archimedean point, from which it’s possible to say that we are already victims of the climate crisis.
Amid the turmoil that looms over the entire planet, Rabinowitz’s point of departure is that the Middle East, in its broadest geographical definition, can be expected to suffer particularly extreme climate changes. From Iran in the east to Morocco in the west, from Turkey in the north to Yemen in the south, 24 countries – Israel among them –
should be very worried.
The estimates are that by August 2080 the average daily temperature in Israel too will stand at 40 degrees Celsius (104 degrees F.), and precipitation will be 25 percent less than it is today. The rains that do fall will be far stronger and more concentrated (something we have already begun to see here in the past few winters). On balance, however, Israel will suffer a prolonged drought. In 2050 snow in the northern hills and in Jerusalem will be an even rarer occurrence that it is today.
But the grass in the neighboring countries is likely to be a lot browner. “Already today the Middle East is one of the hottest and driest regions in the world, and is characterized by a combination of conditions that should be of great concern,” Rabinowitz warns. “We are used to thinking that we live in a rough neighborhood in security terms, but now we need to understand that it’s going to be an even rougher neighborhood in environmental terms. Very extensive populations are going to be hurt; what will be on the agenda of many is survival at the most basic physical level.”
In your perception, are the issues that occupy the Middle East so profoundly today – national identity, religion, military and security supremacy – as good as historical footnotes?
“The committee charged with decorating the Titanic was terribly important when they set sail,” Rabinowitz says sarcastically. “I’m not saying that addressing questions of national identity or religion isn’t important, but that it’s possible that we’ll look back and realize that we were engaged in the wrong struggles, that we concentrated our efforts in the wrong places. This conversation is relevant to the whole world. Until now in modern history, wars were not fought over existential resources. They revolved around the desire for power, rule, territories, freedom. The coming wars will probably not be fought over identity or religion – they will be wars for survival, for water. Stronger states will survive, weaker ones less so.”
In countries that suffer inherently from domestic ills, such as corruption and inequality, the gathering crisis is like a match that could ignite them from the foundation. Examples in Israel’s neighborhood are already apparent.
“The climate changes were in large measure a central trigger for the collapse of Syria,” Rabinowitz explains. “Five consecutive years of drought caused the country’s breadbasket to dry up, and inhabitants of rural areas streamed to the poor parts of urban centers, which were unprepared to take them in. The fact that the country had a despotic ruler, a corrupt government and hapless management of the water system is of course part of this vicious circle. Exactly the same thing can be said about Sudan and Darfur – regions that were very seriously affected by years of drought, leading to the collapse we now see. Climate change is the ultimate multiplier of existing problems and tensions.”
In that situation, Israel’s advantage won’t necessarily be its salvation, he continues: “Israel, thanks to its technological and economic capabilities, and its effective coping with national crises, will likely survive the climate crisis as such. But there aren’t many countries like that in the Middle East, and their collapse will have a dire effect on us, too. Our ability to survive as an air-conditioned villa in the desert, when the situation all around is becoming increasingly desperate, will become ever more complex.”
In other words Syria and Sudan are only the beginning, and more countries around us will collapse?
“The tragic cases of Sudan and Syria are liable to become the new normal in the decades ahead. There’s a problematic connection between climate change and national security. Agricultural debacles in various areas of the Middle East will bring about large-scale pressures of migration from the agricultural periphery to the cities, within each country and beyond its borders. In the past few decades, the cases of Sudan, Darfur and Syria exemplified the fact that ‘climate migration’ to poor cities that aren’t deployed to absorb it leads to heightened ethnic tension, political instability, civil wars and waves of refugees. If we look at Yemen, Jordan, Egypt, Morocco, Algeria – there are many countries in the Middle East with very clear climatic vulnerability, growing poverty and low governance, which are liable to collapse as the climate crisis intensifies.”
In this situation, the asylum seekers from Sudan who entered Israel will be only the tip of the iceberg among future climate refugees. “It’s completely reasonable to think of the Middle East as a region in which there will be millions or tens of millions of environmental refugees and climate refugees” in the coming decades, Rabinowitz says. “The climate changes are likely to expose millions to a shortage of water in the near future. According to one estimate, by 2050 the amount of available water per capita in this region will be half what it is today. People in rural regions will need to downsize their property, sell livestock, take children out of school so that their work will increase the household revenues, lease their land or, when all is said and done, leave.”
Unfair divisions
The countries that will fall apart first are not, of course, the major polluters. The inegalitarian and unfair divisions between strong and weak are actually felt acutely in the Middle East, where inequality is deep and innate. The world’s most polluting citizens live in Kuwait. Each of them accounts for 55 tons of carbon dioxide emissions a year; the Sudanese, on the other hand, are in 183rd place with a per-capita emission of 0.13 tons annually. Israel is in 29th place on this list, with a per-capita emission of 10.8 tons a year, although even within its borders clear differences exist between rich and poor. To take the example of household electricity consumption: The carbon emissions of those in the highest income decile are 24 times as high as those in the bottom decile.
The paradox is that the wealthier the population, the higher its standard of living and the more hothouse gases it emits – but also the better equipped it is to cope with the crisis and adjust to the changes it will cause.
“Even though they pollute more, stronger countries and stronger populations will be able to survive the climate crisis,” Rabinowitz observes. But he’s far less optimistic in regard to countries suffering from economic inequality.
“Some population groups might tell themselves that they will survive the crisis, that they can withstand an increase of dozens of percent in the price of food – so we will see strong states surrounding themselves with walls, and alongside them weak states collapsing,” he says. “In Russia, for example, the ethos is that the climate crisis will benefit them, and that because it won’t harm them they needn’t take action against it. It’s possible that in another 30 years countries like Canada and Russia, as well as Alaska and the northernmost regions in China will emerge better off, because instead of joining the international struggle they were aloof and deployed intensively to open their arctic regions to agriculture and other development.
Despite the glimmers of optimism at the start of our conversation, Rabinowitz now dwells on the routine of hard life that looms in the decades ahead for much of humanity, which more closely resembles life in the period of the coronavirus pandemic than anything we were familiar with previously.
“We are liable to be in a situation where the graph of human existence will undergo what happened to other species that multiplied dramatically: They reached a period of abundance – and then collapsed,” he sums up pessimistically. “There are many indications that we are very close to the peak of abundance. Within 200 years, we have become too populous, we have become far more efficient carriers of epidemics and diseases, and therefore it’s likely that we will suffer from additional epidemics in the years ahead even if we have learned many lessons from the coronavirus.
“What lies in store for us in the post-normal climatic world around the corner is a series of crises of different sorts, relating to medicine, food security, droughts, waves of refugees and so on. We are entering a future of food crises of a form we haven’t yet known. For too long we deluded ourselves into thinking that we had full control over the world of nature – and now it’s beginning to come back at us with compound interest.”