CONCLUSION: THE CLIMATE HEDGE165CLIMATE CHANGE AND DEPLETION STRATEGYYet another threat to oil export looms, one far more ominous than creep-
ing domestic demand: the changing climate. Climate change represents
a potential catastrophe for all of humanity, but the Gulf monarchies play
starring roles as both major perpetrators and early victims.
The problem is simple, the solution fiendishly hard. The burning
of coal, oil, and natural gas is responsible for about two- thirds of the
greenhouse gas emissions— mainly carbon dioxide— that are altering
the climate and warming the Earth. Reducing those emissions is there-
fore necessary. Doing so represents the mother of all collective- action
problems, because fossil fuels are so energy dense and selling them so
profitable.
For the Gulf monarchies, it must be frustrating. Just as they are enjoy-
ing some success demolishing longstanding energy subsidies— and
rearranging the social contract with their citizens— ruling families must
confront a new and even more complex challenge. The magical fluid that
dragged them from poverty and isolation just a few short generations
ago now threatens to render their already intense climate intolerable.
Foreign elites are suddenly less interested in trying to exploit their oil
than in forcing them to keep it underground.
A growing consensus of research concludes that about two- thirds of
remaining fossil fuel reserves must remain unburned if humanity is to
have a reasonable chance of weakening the advance of climate change.
Of course, rendering carbon “unburnable” endangers commercial activ-
ity based on fossil fuels. In the line of fire are some of the world’s largest
firms (table 10.1), along with two dozen countries where exports of coal,
oil, or gas comprise more than 20 percent of GDP.^8
The Gulf monarchies sit at the top of the list of carbon- dependent
economies. For them, climate action looks like a zero- sum game: the cli-
mate’s gain is their loss, and vice versa. While subsidies threaten to dam-
age exports from the supply side, climate action is a demand- side threat.
And it is global. Climate change undermines consumers’ willingness to