The Green Rentier State: Explaining Low-Carbon Transition in Saudi Arabia

• In Event: Poster Session: Urban Politics & International Order, Environmental Issues, and IPE
  In Poster Session: Poster Session: International Order, Environmental Issues, and IPE

Abstract

Global decarbonization efforts are perhaps nowhere more paradoxical than in the Arabian Peninsula, where Gulf states are caught between two storylines. Higher temperatures could render uninhabitable much of the region’s already water-stressed and extremely hot terrain. Concurrently, the world cuts down on fossil fuel shaking the very foundation of their oil-based economies. Despite being the hub of global oil reserves and exceptional pressure on the region’s political economy, the Gulf is largely absent from contemporary climate change debates. What are the implications of climate change for political and economic structures in the Gulf? How are shifts in the world’s energy mix reshaping the regions’ place in global capitalism? This paper proposes a theoretical and empirical basis for understanding low-carbon transitions in resource-rich or ‘rentier’ states by examining one core mechanism: the consequential turn towards sovereign wealth funds (SWFs) – large state-owned investment funds – to re-articulate patterns of economic development. Through a close case study of Saudi Arabia’s Public Investment Fund, the paper argues that SWFs are rentier states’ adaptive responses to external pressures and, simultaneously, a path of least resistance around domestic political and economic constraints. This transformation is conceptualized as the Green Rentier State, an emerging paradigm where SWF-led diversification strategies have adapted to fit local institutional settings to maintain entrenched patterns of clientelism and state control. The turn to SWFs in low-carbon transitions demonstrates an elaborate effort to mould a financialized Green Rentier State within the reorganization of development interventions around market-based green infrastructures in partnership with global finance.

Author

• Alexis Montambault Trudelle, University of Edinburgh