Projecting Saudi Arabia’s CO₂ dynamic baselines to 2060: a multivariate approach

We use an econometric model to generate scenario projections of CO₂ emissions under different sets of assumptions on the underlying drivers. These drivers include GDP, energy prices, economic structure, and the underlying emissions trend (UET), which captures the combined effect of exogenous factors such as consumer behavior and energy efficiency.

Our baseline scenario projects that Saudi CO₂ emissions will rise from 540 Mt in 2019 to 621 Mt in 2030 and 878 Mt in 2060.

In addition to our baseline scenario, we generate CO₂ emissions projections across 10 different scenarios, illustrating how each underlying driver, such as GDP, separately influences future CO₂ emissions in Saudi Arabia. Given the emphasis that the Saudi nationally determined contribution (NDC) places on economic growth and development, we show that in a high-GDP-growth scenario, CO₂ emissions would grow to 635 Mt in 2030 and 985 Mt in 2060. In contrast, in a low-GDP-growth scenario, CO₂ emissions would grow to 607 Mt in 2030 and 781 Mt in 2060.

Given the emphasis that the Saudi NDC also places on the economic structure, we show that in an economic diversification scenario, CO₂ emissions would grow to 602 Mt in 2030 and 769 Mt in 2060. In contrast, in a heavy-industrialization scenario, CO₂ emissions would grow to 646 Mt in 2030 and 1096 Mt in 2060. The two scenarios differ by 46 Mt for 2030 and 327 Mt for 2060, underscoring the important impact of economic structure.

In our highest-emissions scenario, in which GDP grows fastest, the economy becomes more heavily industrialized, and energy prices decline in real terms, CO₂ emissions grow to 666 Mt in 2030 and 1,391 Mt by 2060. On the other hand, in our lowest-emissions scenario, in which GDP grows slowest, energy prices are reformed, and the economy diversifies, CO₂ emissions decline to 516 Mt in 2030 and 465 Mt by 2060. Even in the latter scenario, further efforts would be needed to meet the net-zero objective.