Policy Research Reports
The Political Economy of Energy Transitions in MENA
No.
PRR 60
Publisher
ERF
Date
March, 2025
The combustion of fossil fuels for energy is responsible for over 80% of anthropogenic (human-caused) greenhouse gas emissions, meaning that there is no viable pathway to limiting global warming without a fundamental, rapid and deep transformation of the way societies across the world produce and consume energy. The narrative regarding the impact of energy transitions in the prominent oil producing countries in the MENA region has focused on the potentially adverse effect on economies posed by lower revenues. However, the region’s vulnerability to the impacts of climate change means that it has a significant stake in mitigating the rise in greenhouse gas emissions. Oil producing countries in the MENA region have for long embraced the rentier system whereby oil revenues have been distributed to citizens in return for no political representation.
The production of hydrocarbons is thus deeply intertwined with politics in this region. This is why these countries face enormous challenges to keep pace with the energy transition worldwide. Sizable energy subsidies in the region constitute the one of the main obstacles facing the transition to clean energy in the region. Gradual removal of these subsidies along with campaigns to inform the public about the benefits of moving away from fossil fuels were successful in mitigating any potential political unrest in several countries in the region. The energy transition is underway in the region albeit the pace is slow. Many countries have set Nationally Determined Contributions as well as targets to generate energy from renewables. The essential question that MENA regimes face is whether energy transition can potentially disrupt the existing status-quo or create new economic opportunities that can be usefully harnessed to maintain economic---and therefore, political---stability.
The prospects for transition will therefore be inherently viewed through the prism of what these might mean for regime survival and durability. MENA regimes are likely to cherry pick from the transition menu to ensure that it delivers new political mileage—or, at least, is less politically disruptive. The political economy logic of reform is therefore central to appreciate the direction, pace, and nature of energy transition currently underway in MENA states. In assessing the political economy of energy transition, it is important to recognize that the consequent challenges and opportunities posed by such a transition are likely to vary across different MENA states.
Research Fellows
Abeer Elshennawy
Professor of Economics, American University in Cairo
Senior Associates
Adeel Malik
Globe Fellow in the Economies of Muslim...