Energy transition and climate-related policies : A changing environment and its implications for OPEC countries

Abstract

Since its formation in 1960, the Organization of the Petroleum Exporting Countries (OPEC) has played a vital role in the global oil market. It consists of 12 nations that produce oil in Africa, the Middle East and Latin America. OPEC holds immense political and economic influence due to its oil supply capacity, which represents a significant share of world oil production. This power to control the global oil market has given OPEC significant influence over the global economy A key objective of this thesis is to examine the challenges OPEC has faced in recent years, including climate change, alternative energy sources, and energy transition. Oil's role in future energy systems has been challenged by the increased focus on renewable energy sources and pledges from major oil-consuming nations, especially in the developed world, to reduce emissions to zero ((Mehrara, ‘Energy consumption: The case of oil exporting countries’, 2007). The first part of the study will examine economic trends of each OPEC member nation, focusing on oil sales revenues, oil demand patterns, and crude oil flows. Second, the author explores the importance of reducing emissions associated with oil production and consumption by OPEC members (Chontanawat, ‘Relationship between energy consumption...’ 2020). It is important to emphasize that technology, finance and resilience remain key to reducing emissions in accordance with the Paris climate agreement pledged by OPEC countries. A just and inclusive transition from oil and gas to renewable energy remains a big challenge for these oil-dependent countries. In addition to reducing CO2 emissions and greenhouse gases (GHG), the analysis indicates that societies also demand energy services. Although oil and gas producing countries provide fuels for the world's energy system, they must now determine how they can contribute quickly to climate change solutions while also ensuring energy security (Alshehry et al, ‘Energy consumption...’, 2015). This study found that energy consumption, economic growth, and greenhouse gas (GHG) emissions, also known as CO2 emissions, are all related to OPEC countries' energy consumption. In addition, the results highlight the critical innovative policies OPEC countries are adopting to reduce GHG emissions and diversify their energy sources, particularly those derived from fossil fuels, to further reduce GHG emissions.