This contribution is the result of a collective work led by a group of experts of the Executive MSc Sustainable Finance and Fintech (Dubai Campus) and professors from SKEMA Business School. Dhafer Saïdane, SKEMA Publika contributor on the topic of sustainable finance, coordinated this paper.
It is in a world polarized between deregulated capitalism and ecological dogmatism that SKEMA Publika aims to embody a third way: a transition towards realistic and pragmatic sustainable finance promoting growth that is compatible with sustainability. This work is part of that ambition.
Introduction
As illustrated by this quote from an article published in The Nation in December 2023, there is a common misconception that Gulf countries engage in greenwashing. However, the aim of this note is to challenge this idea by demonstrating that the climate action taken by the Gulf Cooperation Council (GCC) countries is not greenwashing. This assertion is based on an analysis grounded in local realities and observations that highlight the urgency of the climate transition in the GCC countries. Through this note, we also aim to challenge persistent clichés and forms of ethnocentrism that hinder effective international cooperation.
The GCC consists of six countries from the Gulf region: Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates (UAE). Their economies are younger compared to their counterparts in advanced economies (that often are Western economies). Notwithstanding, they face expectations to match the environmental standards of industrialized countries. The GCC is an economic alliance founded in 1981 with the goal to rapidly industrialize the Gulf region. It was initially inspired by other regional integration experiences such as the European Union. The paradox is that the GCC has only existed for four decades, and they are expected to rapidly industrialize while adapting to contemporary environmental standards. In comparison European and North American Economies have had generations to industrialize and evolve. In this regard the objective of the GCC is to promote industrialisation in the Gulf countries while aligning national trajectories with today’s environmental standards.
In reality, the Gulf’s aggregate contribution to global emissions remains comparatively modest, around 2 to 3% of global CO₂, compared with roughly 7% for the European Union. Saudi Arabia, the region’s largest emitter, represents about 1.6% of global fossil-fuel emissions. Yet, despite this share, the Gulf is moving faster than most other regions in redefining its economic and environmental model.
In addition, what makes the Gulf’s trajectory so distinctive is its accelerated pace. Countries like the UAE have transitioned from modest trading hubs into global economic centers within 50 years. Dubai International Airport, for instance, now ranks among the busiest in the world and is a major contributor to the emirate’s gross domestic product (GDP). This accelerated development has resulted in a dual imperative: to continue building resilient, diversified economies while urgently adapting them for climate transition and sustainability. This is a dual challenge no Western economy has faced at similar scales and timelines. Since the older Western economies first industrialized before facing the challenges of climate transition.
Consequently, several questions arise:
Is the image of the Middle East as a polluter consistent with reality? How are countries in this region managing to reconcile economic growth with sustainable development?
In the first part we will see that the need to adapt to climate change is a matter of survival for the Gulf countries. In the second part, we will highlight that the GCC countries have been more successful than European countries in adapting to the energy transition. The third part will emphasize the role of abundant capital in the success of this transition. In the fourth part, we will assess the rapid growth of ESG (environmental, social and governance) regulation. Finally, the last part will suggest several recommendations for the future.
