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Middle East and Central Asia > Saudi Arabia

You are looking at 1 - 9 of 9 items for :

  • Type: Journal Issue x
  • Energy: Government Policy x
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Cover Staff Climate Notes
Key Challenges Faced by Fossil Fuel Exporters during the Energy Transition
Diego Mesa Puyo
,
Augustus J Panton
,
Tarun Sridhar
,
Martin Stuermer
,
Christoph Ungerer
, and
Alice Tianbo Zhang
The global energy transition is affecting fossil fuel exporters from multiple angles. It is adding to longstanding uncertainties on relative movements of fossil fuel demand and supply—which impact fossil fuel-related exports, fiscal flows, investment and subsequently external and fiscal accounts, economic growth, and employment. While policymakers are very familiar with these challenges, they now also face expectations of a permanent decline in the long-run global demand for fossil fuels. Key factors that could determine country-level impacts include (i) the type of fossil fuel a country exports (ii) extraction costs and (iii) country characteristics. The monitoring and mitigation of fiscal risks will need to be stepped up. Fiscal policy also has a role in reducing domestic emissions, encouraging adoption of low-carbon technologies, and helping those most vulnerable to changes from the transition. Broader macroeconomic risks can be reduced by accelerating ongoing structural reforms that support alternative engines of growth. Low- or zero-carbon emission energy industries could offer new avenues that build on existing fossil fuel knowledge and infrastructure. Concurrently, improved financial regulation and supervision could reduce financial sector exposures. Finally, international coordination on the design and implementation of climate policy as well as international transfer schemes (financing and capacity development) could reduce uncertainties surrounding the transition path and associated adverse economic consequences.
Keywords:
Macroeconomic policy; climate change; energy transition; fossil fuel exporters; commodity market; climate mitigation; economic diversification; international coordination; IMF staff Climate note; IMF staff Climate Note 2024/001; fossil fuel exporter; building financial asset buffer; cost exporter; Non-renewable resources; Exports; Oil; Renewable energy; Global
Cover Staff Discussion Notes
Structural Reforms to Accelerate Growth, Ease Policy Trade-offs, and Support the Green Transition in Emerging Market and Developing Economies
Mrs. Nina Budina
,
Mr. Christian H Ebeke
,
Ms. Florence Jaumotte
,
Andrea Medici
,
Augustus J Panton
,
Marina M. Tavares
, and
Bella Yao
In the aftermath of the COVID-19 pandemic, emerging market and developing economies are grappling with economic scarring, social tension, and reduced policy space. Policy actions are already urgently needed to boost growth in the near term and support the ongoing green transition. At the same time, high public debt and persistently high inflation have constrained policy space, posing difficult policy trade-offs. This Staff Discussion Note focuses on emerging market and developing economies and proposes a framework for prioritization, packaging, and sequencing of macrostructural reforms to accelerate growth, alleviate policy trade-offs, and support the green transition. The note shows that prioritizing the removal of the most binding constraints on economic activity, bundling reforms (governance, business deregulation, and external sector reforms), and appropriate sequencing of other reforms (such as labor market and credit sector reforms) can help front-load reform gains. In emerging market and developing economies with large initial structural gaps, the estimated output effects of such a major reform package are sizable—about 4 percent in two years and 8 percent in four years. Achieving higher growth and lower absolute carbon emissions over time requires a well-designed strategy that includes both macrostructural and green reforms.
Keywords:
policy trade-off; climate policy stringency; policy space; policy action; developing economy; Emerging and frontier financial markets; Structural reforms; Climate policy; Greenhouse gas emissions; Global; Caribbean
Cover IMF Staff Country Reports
United Arab Emirates: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
The Selected Issues paper discusses United Arab Emirates’ (UAE) focus on reforms for productive and greener growth. This paper aims to quantify the potential long-term growth and productivity gains from ongoing structural reform efforts. Facilitating green and sustainable private finance would reduce the direct fiscal burdens of investment needs and help promote a smooth transition to a lower carbon future. The UAE has recently signed or started negotiations for Comprehensive Economic Partnership Agreements with eleven countries. Depending on the UAE’s ability to further attract foreign direct investment, the reduction of tariffs, especially on intermediate inputs, can significantly lift long-term growth through stronger competition, access to a higher number of varieties and quality of inputs, and transfer of technology. Developing and scaling up private green and sustainable finance, as well as creating an enabling environment for smooth energy transition, would reduce direct fiscal costs, increase efficiency of green investments, and preserve public financial wealth while delivering on growth and Net Zero ambitions.
Keywords:
UAE government; ICT investment outcome; FDI restrictiveness index; quantifying gains from trade liberalization; productivity gain; Climate finance; Digital economy; Foreign direct investment; Sustainable growth; Global
Cover IMF Working Papers
Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies
Ian W.H. Parry
,
Mr. Simon Black
, and
Nate Vernon
This paper provides a comprehensive global, regional, and country-level update of: (i) efficient fossil fuel prices to reflect their full private and social costs; and (ii) subsidies implied by mispricing fuels. The methodology improves over previous IMF analyses through more sophisticated estimation of costs and impacts of reform. Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Efficient fuel pricing in 2025 would reduce global carbon dioxide emissions 36 percent below baseline levels, which is in line with keeping global warming to 1.5 degrees, while raising revenues worth 3.8 percent of global GDP and preventing 0.9 million local air pollution deaths. Accompanying spreadsheets provide detailed results for 191 countries.
Keywords:
fossil fuel subsidies; efficient fuel prices; supply costs; climate change; local air pollution mortality; revenue gains; spreadsheet tools.; fossil fuel subsidy; supply cost; price reform; fossil fuel; fuel user price; Non-renewable resources; Fuel prices; Energy subsidies; Greenhouse gas emissions; Global
Cover Departmental Papers
The Future of Oil and Fiscal Sustainability in the GCC Region
Mr. Tokhir N Mirzoev
,
Ling Zhu
,
Yang Yang
,
Ms. Tian Zhang
,
Mr. Erik Roos
,
Mr. Andrea Pescatori
, and
Mr. Akito Matsumoto
The oil market is undergoing fundamental change. New technologies are increasing the supply of oil from old and new sources, while rising concerns over the environment are seeing the world gradually moving away from oil. This spells a significant challenge for oil-exporting countries, including those of the Gulf Cooperation Council (GCC) who account for a fifth of the world’s oil production. The GCC countries have recognized the need to reduce their reliance on oil and are all implementing reforms to diversify their economies as well as fiscal and external revenues. Nevertheless, as global oil demand is expected to peak in the next two decades, the associated fiscal imperative could be both larger and more urgent than implied by the GCC countries’ existing plans.
Keywords:
DPPP; DP; price; demand; GCC country; GCC region; oil demand; hydrocarbon GDP; market share; price assumption; GCC government; Oil prices; Oil consumption; Oil; Fiscal consolidation; Fiscal stance; Global; data IMF Library; research department; Energy conservation; Middle East and Central Asia
Cover IMF Working Papers
Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries
Ian W.H. Parry
,
Victor Mylonas
, and
Nate Vernon
Following submission of greenhouse gas (GHG) mitigation commitments or pledges (by 190 countries) for the 2015 Paris Agreement, policymakers are considering specific actions for their implementation. To help guide policy, it is helpful to have a quantitative framework for understanding: i) the main impacts (on GHGs, fiscal balances, the domestic environment, economic welfare, and distributional incidence) of emissions pricing; ii) trade-offs between pricing and other (commonly used) mitigation instruments; and iii) why/to what extent needed policies and their impacts differ across countries. This paper provides an illustrative sense of this information for G20 member countries (which account for about 80 percent of global emissions) under plausible (though inevitably uncertain) projections for future fuel use and price responsiveness. Quantitative results underscore the generally strong case for (comprehensive) pricing over other instruments, its small net costs or often net benefits (when domestic environmental gains are considered), but also the potentially wide dispersion (and hence inefficiency) in emissions prices implied by countries’ mitigation commitments.
Keywords:
WP; co; electricity Co; tons Co; percent Co; road fuel price elasticity; Paris Agreement; carbon pricing; G20 countries; instrument choice; air pollution mortality; tax incidence; welfare effects; climate mitigation; fuel price elasticity; fuel price responsiveness; cost increase; monopoly price distortion; welfare cost; responsiveness of emission; countries flexibility; fuel price response; price change; price projection; Carbon tax; Greenhouse gas emissions; Non-renewable resources; Fuel prices; Fuel tax; Africa; Global
Cover IMF Working Papers
How Much Carbon Pricing is in Countries’ Own Interests? The Critical Role of Co-Benefits
Ian W.H. Parry
,
Mr. Chandara Veung
, and
Mr. Dirk Heine
This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits (leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of CO2 (for year 2010), reflecting primarily health co-benefits from reduced air pollution at coal plants and, in some cases, reductions in automobile externalities (net of fuel taxes/subsidies). Pricing co-benefits reduces CO2 emissions from the top twenty emitters by 13.5 percent (a 10.8 percent reduction in global emissions). However, co-benefits vary dramatically across countries (e.g., with population exposure to pollution) and differentiated pricing of CO2 emissions therefore yields higher net benefits (by 23 percent) than uniform pricing. Importantly, the efficiency case for pricing carbon’s co-benefits hinges critically on (i) weak prospects for internalizing other externalities through other pricing instruments and (ii) productive use of carbon pricing revenues.
Keywords:
WP; price; net; pricing; carbon pricing; co-benefits; air pollution; fuel taxes; top twenty emitters; fuel price elasticity; uniform price; price responsiveness; welfare cost; cross-price effect; price-gap concept; net benefit; responsiveness of fuel use; mitigation cost; countries price carbon; Carbon tax; Greenhouse gas emissions; Non-renewable resources; Public expenditure review; Fuel prices; Global; Africa
Cover IMF Working Papers
Economic Growth and Government Spending in Saudi Arabia: an Empirical Investigation
Mr. Saad A. Alshahrani
and
Mr. Ali J Al-Sadiq
This paper empirically examines the effects of different types of government expenditures, on economic growth in Saudi Arabia. We use different econometric techniques to estimate the short- and long-run effects of these expenditures on growth and employ annual data over the period 1969-2010. Our findings indicate that while private domestic and public investments, as well as healthcare expenditure, stimulate growth in the long-run, openness to trade and spending in the housing sector can also boost short-run production. These findings draw some policy implications for Saudi policymakers on maximizing the returns of the government spending on economic growth.
Keywords:
WP; government expenditure; government spending; growth rate; government consumption expenditure; Economic Growth; Oil Exporting Economy; Saudi Arabia; housing expenditure shock; financing investment; consumption activity; Total expenditures; Capital spending; Current spending; Health care spending; Global; Middle East; North Africa; East Africa; Africa
Cover IMF Working Papers
Issues in Domestic Petroleum Pricing in Oil-Producing Countries
Mr. Sanjeev Gupta
,
Mr. Benedict J. Clements
,
Mr. Kevin Fletcher
, and
Ms. Gabriela Inchauste
This paper discusses issues relating to the domestic pricing of petroleum in oil-producing countries. It finds that in most major oil-exporting countries, government policies keep domestic prices below free-market levels, resulting in implicit subsidies that equaled 3.0 percent of GDP, on average, in 1999. Moreover, the paper argues, these petroleum subsidies are inefficient and inequitable-entailing substantial opportunity costs in terms of forgone revenue or productive spending-and also procyclical, complicating macroeconomic management. Nonetheless, the elimination of petroleum subsidies is often politically difficult, although countervailing measures and publicity campaigns can help engender support for reform.
Keywords:
WP; price; country; subsidy; government; Oil; petroleum; subsidies; domestic prices; excises; fiscal policy; incidence; subsidy reform; max-min price stabilization law; world oil prices increase; transfer program; free market price; petroleum product price; reference price; Oil prices; Consumption; Energy subsidies; Fuel prices; Global