Project Aim

This project aims to support Saudi Arabia’s participation in, and engagement with, domestic and international carbon markets. It seeks to contribute to increasing awareness and strengthening understanding of carbon markets in Saudi Arabia and the broader Gulf Cooperation Council (GCC) region through empirical, evidence-based, policy-oriented research and analysis.

Carbon markets can support both private sector and governments’ efforts to reduce – avoid or remove – greenhouse gas (GHG) emissions and contribute to reaching the goals of the Paris Agreement in an effective way while providing various benefits to multiple stakeholders. Among other things, well-functioning carbon markets can lower the costs of GHG emissions reductions, support the transfer of clean technologies and finance, and unlock higher mitigation ambition over time.

Interest in both compliance and voluntary carbon markets is rising rapidly worldwide. Many countries in the Gulf region, including Saudi Arabia, have expressed in their Paris Agreement nationally determined contributions (NDCs) an interest in participating in voluntary international carbon market cooperation under Article 6 of the agreement. Leveraging the full potential of international carbon markets will require establishing new, and considerably strengthening existing, domestic institutional mechanisms, processes, and capacity. It will also require a robust understanding of related options, risks, and opportunities.

In parallel, with a growing number of companies adopting net-zero emission targets, the demand for offset credits is expected to rise significantly in the coming years. Article 6 interacts with, and influences, both compliance and voluntary carbon markets and related mechanisms worldwide. Alignment with Article 6 rules and quality criteria is currently seen as crucial for ensuring the credibility of credits issued.

 

Key questions

  • Lessons learned: What lessons can be learned from Saudi Arabia’s and the Gulf region’s past experience with carbon markets that are helpful for the post-2020 era?
  • Evolution of the global landscape: How is the international carbon market landscape shaping up, including with relation to voluntary carbon markets and other mechanisms linking to Article 6, and what are the related challenges and opportunities?
  • Domestic carbon markets: What can Saudi Arabia do to reap the most benefits from voluntary carbon market approaches and instruments? Which design options best suit Saudi Arabia’s priorities and goals?

Researchers

Mari Luomi

Mari Luomi

Research Fellow

Anwar Gasim

Anwar Gasim

Research Fellow

Zlata Sergeeva

Zlata Sergeeva

Senior Research Analyst

AlJawhara Al Quayid

AlJawhara Al Quayid

Research Associate

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