Oil exporters to lose big with climate treaty

Saudi Arabia has long played the role of victim in the climate change policy debate, arguing that spillover effects of efforts to wean the world off fossil fuels will harm its economy in the same way that changing weather patterns could reduce crop yields or worsen droughts.

The Saudi argument, long derided by international climate experts, may have a point, fresh estimates show.

International climate change policies will likely reduce OPEC countries' GDP by 15 per cent in coming years, according to Dr Adnan Shihab-Eldin, who was formerly secretary general of OPEC and has served in a number of roles in international organisations.

The forecast resembles predictions by the International Energy Agency (IEA) that in a scenario in which the world reduces fossil fuel emissions by a significant but realistic level, OPEC nations would see 16 per cent less export revenues by 2030 than in a scenario in which no action were taken.

But the IEA added that export revenues would still be four times higher in the period between 2008 and 2030 than in the prior 23 years.

Dr Shihab-Eldin also told reporters in Jeddah yesterday that he expects world oil demand to peak at between 100 and 105 million barrels per day (bpd), which is on the higher end of forecasts offered by OPEC, the IEA and the US Energy Information Agency.