172CONCLUSION: THE CLIMATE HEDGEother than in Dubai, has never overcome the monarchical institutions
arrayed against it. Rentier states, with their two- track economies with
separate rules for foreigners and citizens, with their quasi- functional rule
of law and property rights, and the siphons of wealth to ruling- family
accounts, have been unable to scrap the damaging vestiges of monar-
chical governance. Doing so would undermine the opaque institutions
and discriminatory practices that keep the ruling families in power.
The sustainability of the Gulf economy and environment cannot be
assured unless the demand conundrum is tackled by reforming energy
subsidies. A country’s political and economic systems cannot be perma-
nently arrayed against one another. The subsidies that buttress political
stability are undermining economic stability based on oil and gas
exports. Ultimately, the rentier promise is a pyramid scheme.
The lapsing of the Arab Spring into protracted chaos has allowed
unprecedented reforms to break ground in all six Gulf monarchies. The
Arab Spring provided a trial by fire for the region’s ruling families, long
dismissed as fragile institutions. By and large, the monarchies passed the
test. This bodes well for the next phase in their evolution. The stream-
lined social contract that was emerging appeared to provide regimes
with more flexibility in policy making, perhaps restoring some of the
families’ elusive autonomy in governance. Flexibility will certainly be
needed as these tribal autocracies and the enigmatic personalities who
govern them prepare for another period of chaotic change: the post-
oil age.