Oil producers and the Sustainable Development Goals

Future-looking strategy
Ever since the UN Conference on Environment and Development in Rio de Janeiro in June 1992, the world was seized with issues of sustainable development with some urgency. But sustainable development became the central theme of the global development agenda when members of the international community threw their weight behind the Sustainable Development Goals (SDGs) in 2015 after it became abundantly clear that human progress could not proceed without a sustainable environment. The pursuit of sustainable development is a future-looking strategy that is intended to confront the consequences of past human conduct which is giving rise to global warming and climate change, and to stall what might be the inevitable without radical alterations in future human behaviour. This focus on agreed concerted action came at a time when the world was celebrating the achievements of the Millennium Development Goals (MDGs) and recognized that the elimination of poverty, malnutrition and hunger had to be coupled simultaneously with strong efforts to protect the planet. The linkage between the two imposed a challenge on the international community to act with both compassion and responsibility because of the shared risks of a fragile planet.  Countries that believe in the threat of climate change have committed themselves to achieving the 17 SDGs by 2030.

Global structure
The 2030 Agenda for Sustainable Development, adopted by the United Nations General Assembly, set a global structure for the establishment of global consensus for sustainable development over a 15-year period.  The SDGs, which are integral to realizing the ambitions of the global consensus, serve as a platform for all countries to participate in the dialogue and needed action to meet the critical global economic, environmental and social challenges. As Guyana readies itself to add oil to its production structure, it must grapple with the dichotomy of adding to carbon emissions and lowering its carbon footprint.  Guyana has a unique set of conditions that distinguish it from some major oil-producing countries.  Its substantial forest cover and many freshwater sources distinguish it from many well-known oil producers.  The country is committed to the Green State Development Strategy (GSDS) which will serve as a basis for achieving the SDGs.  Nonetheless, this article will look to point out what two oil-dependent countries are doing to meet the SDGs in order to emphasize the importance of Guyanese staying the course of the GSDS after oil is added to its production structure.

It is important to recognize the causal relationship between the energy sector and the achievement of sustainable development if only for the impact that the former has on the environment.  Oil, gas and coal are the main sources of energy that power the world economy.  Fossil fuels are at the centre of human existence and development.  Almost everything that mankind produces and consumes relies on fossil fuel and plenty of it comes from Saudi Arabia and the USA.  Collectively, oil, gas and coal account for more than 75 per cent of total energy supply. The operations of the oil and gas sector have both positive and negative impacts on a number of areas addressed under the SDGs framework.  Foremost are communities, ecosystems and economies that are part of the production sphere.  The positive impact that this sector has on the sustainable development includes the generation of jobs and the development of advanced technologies.  They offer scope also for increased investments in the social and economic aspects of communities and hold potential for government to earn substantial amounts of revenue.

Bringing pressure
But increasing public and private interests are bringing pressure to bear on producers of these energy products and the SDGs give them little room to ignore those demands. As a consequence, a major target of the SDGs is the reduction of dependence on fossil fuels.  It calls for increased use of clean and alternative energy. If not counterbalanced by strong government policy to reduce dependence on these high emissions products, they will pose major challenges to the sustainability of the global environmental system.

Among the countries that are taking action towards achieving sustainable development are Kazakhstan and Saudi Arabia. Saudi Arabia is the largest oil exporter while Kazakhstan ranks in the top 15 oil producers.  Kazakhstan is located in Central Asia while Saudi Arabia is in the Middle East.  Their area of focus in the sustainable development arena, renewable energy, is particularly interesting since it goes to the heart of their economic lifeline, energy.  There are goals like education, empowerment of women and industry, innovation and infrastructure that they could concentrate on as part of their contribution to sustainable development.   These two countries are not the only oil producers who have begun to make moves that seem to contradict economic logic.  Abu Dhabi and Kuwait also have massive alternative energy plans.  Thus, it is noteworthy that countries who are significant oil producers are moving in the direction of diversifying their energy sources.

Balance of development
Kazakhstan has committed itself to move away from a ‘brown’ to a ‘green’ economy.  The country aspires to become one of the top 30 competitive developed countries in the world by 2050 while gradually ‘greening’ key economic sectors. This transition to a ‘green’ economy was signalled by the development of the ‘Concept for Sustainable Development’ in 2006 and later by Kazakhstan’s Green Economy Concept policy in 2013 in a response to the Rio+ 20 Earth Summit of 2012.  The general goal of the Concept for Sustainable Development is “to achieve an economic, social, environmental, and political balance of the development” of Kazakhstan.  The policy focus is multi-sectoral and the government intends to use it as a base to improve the quality of life of the people.  It is also designed to position the country to compete effectively in the long term.  Clearly, Kazakhstan has a strategy that should result in the diversification of its economy and reduce its dependence on oil for its livelihood.  As a consequence, one should see the introduction of greater amounts of alternative, cleaner sources of energy that could help to reform its agricultural and industrial sectors.  If all goes well, the strategy could also help to spur scientific innovation and the use of advanced technologies. The success of the programme undoubtedly will depend on continued government commitment to the initiative.

Saudi Arabia is also moving ahead with investment in renewable energy, nuclear power and other alternatives to fossil fuels.  It is interesting that Saudi Arabia like Kazakhstan is concentrating in the sector that it knows best ‒ energy.  Saudi Arabia therefore intends to continue as a leader in the energy sector whether by fossil energy standards or renewable energy standards. Towards this end, Saudi Arabia has announced a budget of $109 billion that targets investments in renewable energy. According to some sources, Saudi Arabia is seeking to generate as much as a third of its energy demands, estimated at 54 GW, using renewable energy by 2032.  The energy mix is expected to be wide ranging and will include solar power, nuclear energy, geothermal energy, wind power and even biomass (waste to energy).  The strategy seems to rely less on oil for its economic survival and more on using it to produce other goods, such as plastics and polymers.  Saudi Arabia is reported to have claimed that oil was more precious to it underground than as a fuel source.  Such a statement underscores the commitment that the country has to the development of its alternative energy capacity.

Capture and storage
Saudi Arabia is even thinking of developing technologies that could enable it to use depleted oilfields for the capture and storage of compressed carbon dioxide.  The country sees the development of Carbon Capture and Storage (CCS) technology as something that calls for collaboration at the international level. The concept of sustainable development recognizes that growth must be both inclusive and environmentally sound to reduce poverty and build shared prosperity for today’s population and to continue to meet the needs of future generations. Within the framework of this concept, there is need for the efficient allocation of resources to ensure both immediate and long term benefits for the planet.  Efficiency is also needed to deliver the high quality of life that humans deserve to enjoy.

Temptation
For Guyana, the major concern would be the oceans and marine life in the domain of oil production. The temptation would be to go the easy route and use the product that was in abundant supply.  But Guyana has to remain conscious of the environmental imprint of fossil fuel production and emissions on biodiversity and climate change and the risks to the livelihood of communities that depend on the sea and land. The weighing of the opportunity costs between sustainable development and the development of the oil and gas sector is something that both Kazakhstan and Saudi Arabia have chosen to do.  The GSDS should help Guyana to do likewise.