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Sustainability and carbon management practices in the Kingdom of Saudi Arabia a

M. Anaam Hashmi & Mohammed Al-Habib

a

a

King Abdul Aziz University , Jeddah , Saudi Arabia Published online: 10 May 2012.

To cite this article: M. Anaam Hashmi & Mohammed Al-Habib (2013) Sustainability and carbon management practices in the Kingdom of Saudi Arabia, Journal of Environmental Planning and Management, 56:1, 140-157, DOI: 10.1080/09640568.2012.654849 To link to this article: http://dx.doi.org/10.1080/09640568.2012.654849

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Journal of Environmental Planning and Management Vol. 56, No. 1, January 2013, 140–157

Sustainability and carbon management practices in the Kingdom of Saudi Arabia M. Anaam Hashmi* and Mohammed Al-Habib King Abdul Aziz University, Jeddah, Saudi Arabia

Downloaded by [41.67.21.28] at 22:06 24 November 2014

(Received 19 June 2011; final version received 2 January 2012) Sustainable and carbon management practices are becoming prominent considerations in international business, particularly in developing economies that are still forming their economic foundations. Saudi Arabia is one such an economy and is pivotal because of its key position in international petroleum production. This study analysed secondary and primary data pertaining to sustainability and carbon management practices in Saudi Arabia and its business enterprises. A questionnaire was distributed to approximately 150 Saudi Arabian middle-managers. Surveyed Saudi enterprise managers reported a desire to see the Saudi government take an active role and establish well-defined carbon management policies in the country. The Saudi Arabian government has been serious in tackling the environmental problems, but the current governmental position is based on a distributive justice philosophy and pursuit of national interest. Primary data revealed private sector enterprises were better prepared to deal with sustainability and carbon management problems compared to public sector enterprises. Surveyed Saudi mangers reported hope that their employers would start rewarding positive carbon management actions and focus on educating managers about carbon management practices. Findings from this study can assist Saudi Arabian policy makers and leadership of public and private sector enterprises to formulate future sustainability and carbon management policies. Keywords: sustainability; carbon management; Saudi Arabia; Saudi managers; private sector; public sector; distributive justice; greenhouse gases

1.

Introduction

The purpose of this study is to analyse sustainability and carbon management practices in Saudi Arabia. This study summarises sustainability concepts, investigates the current status of Saudi carbon emissions, and analyses the Saudi Arabian government’s position with respect to global and domestic carbon management policies. Primary data collected through a survey of Saudi managers in public and private sectors are analysed to shed light on the current status of relevant practices in Saudi Arabia. The most popular definition of sustainability can be traced to a 1987 UN conference. It defined sustainable developments as those that ‘‘meet present needs without compromising the ability of future generations to meet their needs’’

*Corresponding author. Email: [email protected] ISSN 0964-0568 print/ISSN 1360-0559 online Ó 2013 University of Newcastle upon Tyne http://dx.doi.org/10.1080/09640568.2012.654849 http://www.tandfonline.com


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(Pezzey and Toman 2002, p. 11). Organisations can develop a sustainability strategy that can help them enhance revenue and brand value, promote innovation, reduce costs and manage risk. Sustainability is also explained as using methods, systems and materials that will not deplete resources or harm natural cycles; therefore, carbon emissions reduction has become a major component of achieving sustainability. Carbon management is often described as a mechanism to reduce all six greenhouse gases, including carbon dioxide (CO2), the leading source of environmental damage. Some of the carbon management practices are improving fuel efficiency, fuel switching, innovation in resource allocation and waste reduction. Carbon management is often considered a costly, burdensome requirement, when in reality it can become a growth opportunity for business enterprises when approached proactively. Sustainability and carbon management practices are gaining attention in the formulation of business strategies within most public and private sector enterprises in Saudi Arabia and across the globe. The main catalysts of this trend include legislative pressures in many countries and the Kyoto Protocol to the United Nation Framework Convention on Climate Change (UNFCCC). The Kyoto Protocol – an international agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC) – was adopted in Kyoto, Japan on 11 December 1997 and came into force on 16 February 2005 (UNFCC 2011). The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialised countries and the European Union (EU) for reducing greenhouse gas (GHG) emissions. Recognising that developed countries are principally responsible for current high levels of GHG emissions in the atmosphere, as a result of more than 150 years of industrial activity, the Protocol places a heavier burden on developed nations under the principle of ‘common but differentiated responsibilities’. Developed countries are classified as Annex I countries, while developing countries and economies in transition (former Soviet bloc countries) are classified as non-Annex I countries (UNFCCC 2011). Saudi Arabia is considered to be a non-Annex I country. Saudi Arabia is a signatory of the Kyoto Protocol document. Saudi Arabia ratified the Kyoto Protocol in May 2005, and in September 2006 it held its first regional Clean Development Mechanism (CDM) conference in Riyadh. In addition, Saudi Arabia was instrumental in establishing the Bali Roadmap in December 2007 and the nation also participated in UNFCCC conferences in Poznan in 2008, Copenhagen in 2009 and Cancun in 2010 (Al-Meshari 2010). It is worth noting that Saudi Arabia is among the top per capita carbon dioxide (CO2) producing countries. In 2009 the country produced an average of 13.6 tons of CO2 per person, accounting for approximately 1.1% of global emissions despite representing only 0.4% of the world’s population. Besides participating in global environmental forums and emphasising sustainability issues at home, there has been criticism of various Saudi government positions. Depledge (2008) criticised the Saudi Arabian position in global environmental treaty negotiations by categorising the Saudi Arabian role to be obstructionist. Depledge (2008) asserted Saudi Arabia is not serious in any global treaty mandating GHG emissions reduction because the Saudi government believes a reduction in GHG emissions will lead to lower demand for petroleum, which will thus lead to lost revenue for oil exporting countries. Depledge concluded Saudi


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M. Anaam Hashmi and M. Al-Habib

Arabia and other oil exporters only joined the Kyoto Protocol once it became clear the document was going to become a reality – and therefore able to fully influence global environmental treaties. Barnett (2008) also suggested the Organisation of Petroleum Exporting Countries (OPEC) member nations – led by Saudi Arabia – has not been helpful in global climate negotiations; and OPEC members are co-ordinating their opposition through the Group of 77 (G-77) developing countries. Saudi Arabian oil revenue constitutes more than 70% of the nation’s budget, and a $10 rise in the price of a barrel of oil results in a 14% rise in Gross Domestic Product. OPEC oil exporters consider GHG emissions reduction policies, and carbon taxation in developed countries, to be a mechanism for transferring wealth from oil producing countries to governments in oil consuming developed countries. Barnett (2008) considered OPEC and Saudi Arabian government roles to be obstructionist in reaching a global environmental treaty. Swazo (2010) defended the Saudi Arabian government’s position regarding global environmental treaties and explained in detail the moral and practical nature of the Saudi Arabian position. Swazo (2010) explained the Saudi Arabian position in light of distributive justice and pursuit of national interest. Distributive justice is defined as fair disbursement of common advantages and common burdens by a community to its members. In the carbon management debate, it has been argued that countries polluting the environment for a longer period must take a bigger responsibility; and emissions reduction goals should not be detrimental to any country’s economic survival. Swazo (2010) explained that all countries are seeking to advance national interests, as they may have concerns about the global environmental policies, and that is why distributive justice is a necessary component of global environmental negotiations. A substantial portion of Saudi Arabian government’s revenue source is the export of fossil fuels. The Saudi Arabian government views a reduction of fossil fuel use to be detrimental to their economic prosperity and social development; therefore, they wish to be compensated as a result of any environmental treaty. No such compensation has been offered to Saudi Arabia and other oil exporting countries. Swazo (2010, p. 24) contradicted the opinions of Depledge (2008) and Barnett (2008), by concluding, ‘‘. . .the Saudi position is defensible and reasonable. It cannot fairly be said that the Saudis are merely negotiating for ‘no’ and seeking to obstruct progress’’. Swazo (2010) also considered the Saudi Arabian position to be consistent with that of other developing countries currently governing international law and international norms of morality. One of the secondary objectives of the current study is to investigate criticisms posed by Depledge (2008) and Barnett (2008). This study is timely, because developed countries in Europe, North America and Asia are focusing on sustainability and carbon management policies and looking forward to a global post-Kyoto 2012 treaty. Saudi Arabia and its public and private sector entities will be left behind if they do not take these issues seriously. The next phase of the Kyoto Protocol carbon emissions reduction agreement starts in January 2013 and may include Saudi Arabia in the list of countries required to drastically reduce GHG emissions. This study is one of the first examining the carbon management practices in the Saudi public and private sectors. The results of this project can be useful for Saudi Arabian policy makers as well.

Journal of Environmental Planning and Management 2.


2.1.

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Literature review Sustainability and carbon management efforts across the globe

There is no single authoritative definition of sustainability or sustainable enterprise. Some early work regarding modern environmentalism began with Carson’s controversial publication of Silent Spring in 1962, which highlighted the dangers of indiscriminate use of pesticides in the United States and around the world, and helped to start an era of environmental regulations and socially responsible environmental policies. The idea of social responsibility and environmental ethics issues goes back to Carson’s study (Carson 1962). The Brundtland thesis in 1987 introduced the de facto standard definition of sustainability: ‘‘Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs’’ (Pezzey and Toman 2002, p. 11). Each of these key studies contributed to the development of a growing movement of environmental concern, preparing the groundwork for modern sustainability theories and their definitions. Essentially, a sustainable enterprise is an initiative to provide for the present without limiting resources or the ability of future generations to provide and survive indefinitely. According to a recent report from the American Management Association (AMA): ‘‘The primary goal of sustainability is ensuring that whole systems remain healthy so that people – as individuals, societies, and organisations – improve their overall chances of well being’’ (American Management Association [AMA] 2007, v). Carroll (1979) possibly shaped one of the first models for social-responsibilityfocused decision making. Carroll advocated managers should be provided with a clear concept of social responsibility and a list of reasons justifying its existence. Hawken (1993) not only identified sustainability problems, but also discussed business-related solutions, which he asserted could transform both companies and the economy, and possibly improve profitability. McDonough and Braungart (2002) laid out a strong argument in support of the vital interrelationship of society’s needs and resource availability, and argued that efficient use of resources is the key to enjoying these resources in the future. Elkington (1998) introduced the widely used term ‘triple bottom line’ to define sustainability, referring to the economic bottom line (profit), the social bottom line (people), and the environmental bottom line (planet). Large global corporations have recently begun emphasising sustainability and carbon management practices, largely due to pressure from sustainability advocates and institutional investors around the world, entities that are requesting leading corporations should disclose their GHG emissions reduction practices. Among large global corporations, several have volunteered to share their sustainability efforts with the Carbon Disclosure Project (CDP), a multi-national co-operative and the leading entity demanding global companies disclose their sustainability policies (Carbon Disclosure Project [CDP], 2010). The CDP is a coalition of approximately 385 institutional investors that manage $57 trillion in global investments. The project periodically surveys companies and publishes these results, which are available to all stakeholders, including consumers, financial institutions and governmental agencies. Publication of corporate carbon emissions reduction policies has encouraged large companies to take further steps and reduce their GHG emissions (CDP 2010). The CDP has made requests to the largest multinationals to disclose their GHG


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emissions reduction programmes. While the CDP has surveyed over 3500 global corporations, hardly any responding corporations are based in the Middle East. One recent attempt to quantify and rank large United States and international corporations was made by the Corporate Knights Research Group, a Toronto-based media company, which collected data on 3000 global public corporations and evaluated them according to 11 different metrics. As a result of this research, the ranking of the world’s 100 most sustainable corporations was made available by Forbes magazine in January 2011 (Coster 2011). The corporations were assessed against 10 equally weighted environmental, social and governance key performance indicators, and a transparency indicator. The sum of all 11 scores was normalised to a scale of 0 to 100 and the corporations were ranked on the basis of this score (Coster 2011). Out of the top 100 sustainable corporations, 13 corporations are based in the United States and less than 10 in Australia or Canada. Most of the corporations on the list are European corporations, and over 60 are based in European Union member countries. None of the top 100 sustainable corporations are from Saudi Arabia or the Middle East. European governments have embarked upon a series of measures, including the ratification of the Kyoto Protocol, and such measures have forced European corporations to be efficient with their resources. Along with international corporations, Saudi Arabian business enterprises would be wise to also be concerned about their sustainability ranking within the country and the region. Idowu and Filho (2010) provided a perspective on the sustainability debate in several countries, including Egypt and Turkey. Idowu and Filho emphasised innovative ways to reform business organisations, and suggested country specific realities should be taken into account to formulate successful sustainability policies. Eastin et al. (2010) compared the 1970s ‘slow growth’ movement with the 2000s carbon emissions reduction debate. Eastin et al. (2010) concluded that doomsday scenarios play a key role in both debates, and suggested there should be less emphasis on emissions reduction and more emphasis on socio-political issues. It was further argued that market-forces alone cannot tackle this mammoth problem and that developing a solution requires aggressive governmental involvement and a post2012 Kyoto-like global agreement (Eastin et al. 2010). A combination of grassroots involvement, government mandates and new technologies are needed to avoid a doomsday scenario. The common theme of the above two studies is that the carbon management policies may have a unique focus in each country, and active governmental involvement is a necessary component to implement these policies. 2.2.

Sustainability and carbon management efforts in Saudi Arabia

The first ever large-scale symposium emphasising carbon management and mitigation policies in Saudi Arabia was held in May 2006. The symposium was hosted by Saudi Aramco in the city of Dammam, and an estimated 400 participants representing over 100 institutes and companies from 24 countries attended, with the common goal of finding ways to meet the world’s growing energy demands while reducing emissions. The Ministry of Petroleum and Mineral Resources also played a pivotal role in early awareness of carbon management. Participants discussed regulatory, environmental and economic aspects of carbon management, the latest advances in technologies targeting CO2 capture from fixed and mobile sources, and CO2 sequestration (Saudi Aramco 2006). However, it is unclear what has been



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accomplished by Saudi Aramco and other Saudi business enterprises since this historic event. In Saudi Arabia, the environmental policy debate is linked to future petroleum demand and price. It is assumed that a reduction in greenhouse gas emissions will lower global demand and the price of petroleum, which will probably hamper Saudi economic growth and scarify prosperity. Doyle and Wynn (2011) reported an interesting dispute between Saudi Arabia and poor developing countries. In February 2011, Saudi Arabia along with many poor developing countries, applied for monies to develop renewable energy and decrease dependence on fossil fuels. The application was to a $100 billion fund created in December 2010 at the end of a global climate conference in Cancun, Mexico. The purpose of the fund is to assist developing countries with implementing climate-related measures and protect tropical forests. The fund will disburse $100 billion annually, starting in 2020. The Saudi Arabian government has argued the need to develop solar power and requested financial aid to diversify its energy sector, as it was ‘among the most vulnerable economies’ heavily dependent on oil exports whose use may be curbed under a future international climate deal, or the next phase of the Kyoto Protocol starting in 2013. Saudi Arabia wishes to be compensated as a result of any future environmental treaty. In contradiction to the Saudi request for financial assistance, Parker (2010) argued that Gulf Cooperation Council (GCC) member countries, including Saudi Arabia, could not be casual observers of global carbon management and trading mechanisms. GCC countries have some of the highest carbon emissions per capita, and these nations hope to be compensated whenever the world moves away from fossil fuel-based economies. Parker (2010) did not support the GCC countries’ request for compensation from the global climate fund; instead arguing that a GCCfocused carbon trading platform could be developed, where low-carbon producing enterprises would be financially rewarded by selling generated carbon credits. Henriques and Sardorsky (2010) and Sari and Soytas (2009) attempted to understand the relationship between fossil fuel consumption, income and carbon emissions. Henriques and Sardorsky (2010) highlighted the importance of sustainability practices by linking them with energy price risk. Henriques and Sardorsky (2010) developed a model of a company’s energy price exposure and presented evidence of an inverse relationship between environmental sustainability policies and energy price exposure. One of the implications of the Henriques and Sardorsky study is that increased sustainability practices by global corporations might reduce the demand for Saudi oil and gas, thus the Saudi government should consider devising other sources of revenue, or adopt a gradual carbon emissions reduction policy. An opposing argument was presented by Sari and Soytas (2009). Sari and Soytas studied select OPEC member countries over the period of 1971–2002, and analysed the relationship between carbon emissions, income and total employment. Their overall conclusion was that none of the countries studied needed to sacrifice economic growth to decrease their carbon emissions levels. For Saudi Arabia, the long-term forcing variables for income were determined to be employment and energy consumption (Sari and Soytas 2009). This suggests that reducing energy consumption might reduce the Saudi government’s income, unless the country finds ways to improve energy efficiency by employing new technologies. In another attempt to investigate carbon emissions, Narayan and Narayan (2010) empirically tested 43 countries’ CO2 emissions data and their relationship with


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income level of the nation’s citizens. The study calculated short-term and long-term income elasticity of the selected countries. In the Middle Eastern region, the study found income had a statistically significant positive effect on CO2 emissions in the short-term for Iraq, Jordan, Kuwait, Qatar and Saudi Arabia. Short-term income elasticity ranged from 0.33 for Iraq to 0.40 for Saudi Arabia. Another method for judging whether countries have reduced CO2 emissions over time (as incomes have risen) is by comparing the long-term impact of income on emissions with the shortterm impact. If the long-term income elasticity is less than the short term, then this implies that, over time, as income increased CO2 emissions have fallen. This turns out to be the case for Jordan, Kuwait and Qatar. For the United Arab Emirates (UAE), in both short- and long-term scenarios, income has a statistically insignificant effect on emissions. The income elasticity of Saudi Arabia stayed the same in the short- and long-term, implying CO2 emissions increased as a result of increased income in the country, in the short term and long term. Narayan and Narayan concluded that a long-term positive relationship exists between income and CO2 emissions. This is a disturbing finding since Saudi Arabian income is expected to increase in the near future. Expected income growth in Saudi Arabia (the oil price hovered over $100 per barrel of crude in 2011) will increase GHG emissions, unless meaningful steps are taken. Reiche (2010) studied renewable energy policies of all six member countries of the Gulf Cooperation Council (GCC) and suggested transitioning from a twentieth century carbon-based economy into a twenty-first century sustainable economy. Reiche described the role of the carbon-neutral Masdar City in the Abu Dhabi emirate of the UAE, and implied the emergence of similar cities in other GCC member countries. Reiche (2010) considered the experience of Masdar city to be likely to be relevant to other GCC countries, including Saudi Arabia, as one of the mechanisms for pursuing sustainability goals. Saudi Arabian government and international organisations are promoting research and the study of environmental challenges facing the kingdom. In order to bring Saudi Arabia and the region up to global sustainability standards, the Center of Excellence for Climate Change Research (CECCR) at the King Abdul Aziz University, Jeddah, has been commissioned by the World Bank to study and work on climate change in the Arab world. CECCR is also working on compiling detailed climate data for Saudi Arabia that can be used for policy formation in the future (Khan 2010). Some of the other newly established institutions charged with reducing carbon emissions are the King Abdullah Petroleum Studies and Research Center (KAPSARC) and King Abdullah City for Atomic and Renewable Energy (K.A.CARE). KAPSARC is a research and policy centre committed to energy and environmental exploration in Saudi Arabia. The main focus of the centre is to ensure sustainable energy resources, with a special focus on fossil fuels. On the other hand K.A.CARE, created in April 2010, is contributing to a sustainable future for Saudi Arabia by developing alternative energy capacity and renewable fuels from indigenous sources (A New Era of Sustainable Energy 2011, KAPSARC 2011). Saudi Arabia has already created their Designated National Authority (DNA) to certify Clean Development Mechanism (CDM) projects – low-carbon projects in a developing country (such as Saudi Arabia) designed to generate carbon credits that can be traded on a global climate exchange. Saudi CDM projects must be certified by the DNA before carbon credits can be traded through a global exchange. The Saudi Arabian DNA is called the National Committee for the Clean Development


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Mechanism, and it is presided over by a representative of the Ministry of Petroleum and Mineral Resources and the membership of the following Saudi Arabian ministries and governmental entities (Clean Development Mechanism 2011): . . . . . . . . . . . .

Ministry of Municipal and Rural Affairs Ministry of Commerce and Industry Ministry of Health Ministry of Water and Electricity Ministry of Agriculture Meteorology and Environmental Protection Presidency Royal Commission for Jubail and Yanbu Saline Water Conversion Corporation Saudi Aramco Saudi Arabian Basic Industries Corporation (SABIC) Saudi Electricity Company King Abdulaziz City for Science and Technology.

Currently there is only one CDM project (Madinah Landfill Gas Capture Project) under review by the Saudi Arabian DNA. The project’s design document (PDD) was approved in June 2010, but no decision has been made on carbon credit generation. The progress on the creation and approval of CDM projects in Saudi Arabia is slow compared to other developing countries (CDM 2011). Another attempt by Saudi government to reduce carbon emissions is the creation of a new entity, the National Energy Efficiency Programme (NEEP), an organisation targeting the electric power generation and transmission sectors. NEEP works closely with Saudi ministries, industries and the commerce sector to help achieve a cleaner environment and more reliable and affordable energy systems (National Energy Efficiency Program [NEEP], 2011). Alyousef and Varnham (2010) commented on the role of NEEP, which is striving to promote energy efficiency measures and increase the use of energy efficient products. NEEP has taken the lead in overseeing a Saudi energy audit, formulating electrical equipment standards, offering sustainability training and providing education programmes. Alyousef and Varnham (2010) suggested a need for an even more powerful agency and financing mechanism to make further progress in reducing Saudi reliance on fossil fuels. In conclusion, the available literature offers general information about the Saudi Arabian government’s efforts in sustainability/carbon management, but the literature does not provide concrete details regarding Saudi Arabian public and private sector entities’ involvement in sustainability/carbon management practices. In order for Saudi Arabia and its domestic enterprises to fully engage with the global movement toward sustainability and carbon management, there is a need to understand the Saudi Arabian position as it relates to existing and potential global environmental treaties, as discussed by Depledge (2008) and Swazo (2010). The following research questions and hypothesis are devised to better understand the current status of Saudi Arabia’s readiness to tackle carbon- and sustainabilityrelated issues, and the desires of Saudi Arabian managers. Research Question 1: What is the nature of recent sustainability and carbon management practices in Saudi Arabia? Research Question 2: What is the awareness level of public and private sector business entities’ managers regarding sustainability and carbon management policies?

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Research Question 3: Do Saudi Arabian managers support aggressive roles for their governmental organisations regarding the management of carbon emissions? Research Hypothesis: Private sector entities in Saudi Arabia are better prepared to deal with sustainability and carbon management problems compared to public sector entities.


3.

Research methods and data collection

A number of secondary and primary sources were consulted to analyse the official Saudi Arabian position regarding carbon emissions data and carbon management practices. Secondary sources provided Saudi Arabian carbon emissions data in comparison with other major carbon emitting countries. After personal interviews with about 10 middle-level and senior Saudi Arabian managers, a questionnaire was designed to assess their opinions about their employers’ practices related to these topics. The questionnaire included questions pertaining to personal beliefs and official policies of the surveyed Saudi business enterprises. Business enterprise is an entity where the primary purpose is profit generation, and these entities may have different ownership and organisational structures. In this study, an enterprise includes all governmental, semi-government and private Saudi Arabian entities, along with Saudi subsidiaries of multinational corporations. A 7-point Likert scale was used, wherein 1 indicated ‘strongly disagree’ and 7 indicated ‘strongly agree’. The last section of the questionnaire covered demographic and corporation-specific information. The study sample was based on 150 randomly selected, mid-level managers primarily in the Jeddah, Riyadh and Al-Qaseem metropolitan regions of Saudi Arabia. Middle-level managers were selected because all of them were college graduates, proficient in English language, and they were sharing opinions without much hesitation. The senior managers and government officials were excluded from this study because, in the personal interview phase, their responses were found to be diplomatic and aligned with official government policies. It is culturally impolite for senior managers and government officials to criticise their own policies. A total of 127 completed questionnaires were collected from participating managers, over a period of two months. Of these, 117 questionnaires were usable and were included for data analysis. The age of surveyed managers varies from 30 to 42 years. The data were analysed by tabulating mean importance scores and using t-tests. SPSS-15 software was used for analysis. 3.1.

Secondary data analyses

Carbon dioxide (CO2) emissions data for Saudi Arabia in recent years are presented in Table 1. Over the 20-year period (1990–2009), total CO2 emissions have increased from 160 to 370 million tons (131%). The increase of CO2 emissions is gradual, but the upward trend appears continuous and unstoppable. This increase in CO2 emissions is greater than most countries, with the exception of China and India, but both of those nations began with very low emission levels and support particularly large populations. Some possible reasons for increases in Saudi Arabian emissions are population growth, prosperity and lack of coherent carbon management policies.


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Table 1. Total Saudi Arabian CO2 emissions (1990–2009) (million tons CO2). Year

Saudi CO2 emissions

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

160 170 180 190 200 210 220 220 240 240 250 260 280 290 300 320 340 360 380 370

Source: Olivier and Peters (2011).

To better understand CO2 emissions levels in Saudi Arabia, per capita data were calculated and compared with per capita CO2 emissions levels of the top 10 CO2 emitters among the Kyoto Protocol classified Annex I (developed) countries and non-Annex I (developing) countries. The CO2 emissions data from the top 10 emitters from Annex I and non-Annex I countries are summarised in Tables 2 and 3, where the data presented give insight into emissions from these countries over a 20year period. Per capita emissions are a widely used measure of a nation’s carbon management policies, and an analysis of per capita emissions from 2000 to 2009 revealed several interesting facts. Saudi Arabia is one of the top 10 emitters from the non-Annex I countries. Among Annex I countries, only seven countries have ratified the Kyoto Protocol. The United States, Russian Federation and Australia were not subject to binding emissions reduction targets set by the Protocol. The Russian Federation and Australia were the only two countries where per capita emissions slightly increased over the 10-year period. All Annex I countries subjected to Kyoto mandatory cuts reported 6–12% reductions in their emissions. The United States reported a 16% reduction in emissions during 2000–2009, the highest among the top 10 Annex I emitters, indicating that while the United States has not ratified the Kyoto Protocols, the country is committed to emissions reduction. Saudi Arabia ranked ninth among the top 10 non-Annex I countries (Table 3), with emissions in 2009 reaching 370 million tons. China and India were by far the two highest emitters in this category; however, based on per capita emissions data in 1990, 2000 and 2009, Saudi Arabia was the most polluting nation among the nonAnnex I countries. In 2009, Saudi per capita emissions were 13.6 million tons, much more than China (6.1 million tons) and India (1.4 million tons). The United States,


5310 1570 1180 770 540 490 410 400 370 310

Total emissions 2009 19.5 15.7 9.4 12.9 16.2 10.3 7.5 16.2 6.8 5.8

Per capita emissions 1990 20.5 10.8 10.0 10.5 18.0 9.3 7.9 18.7 6.8 7.5

Per capita emissions 2000

Top 10 Annex I country emissions (million tons CO2).

United States Russian Federation Japan Germany Canada United Kingdom Italy Australia France Spain

Country

Table 2.

17.2 11.2 9.2 9.3 16.3 8.1 7.0 18.8 6.0 7.1


Per capita emissions change 2000–2009


716% 3% 78% 711% 79% 714% 712% 1% 712% 76%

Per capita emissions % change 2000–2009

150 M. Anaam Hashmi and M. Al-Habib


8060 1670 570 560 470 440 380 380 370 260

Total emissions 2009 2.2 0.8 3.6 5.9 3.7 0.9 1.5 7.3 9.8 6.3


Per capita emissions 2000

Top 10 non-Annex I country emissions (million tons CO2).

China India Iran S. Korea Mexico Indonesia Brazil South Africa Saudi Arabia Taiwan

Country

Table 3.

6.1 1.4 7.7 11.5 4.2 1.9 1.9 8.0 13.6 10.7


Per capita emissions change 2000–2009


113% 38% 48% 18% 8% 36% 71% 18% 16% 6%

Per capita emissions% change 2000–2009

Journal of Environmental Planning and Management 151


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Canada and Australia (from Annex I) reported higher per capita emissions, but unlike Saudi Arabia they have been able to drastically reduce their emissions in recent years. Saudi policy makers may take a serious look at per capita emissions data before becoming involved in global climate treaties. At the same time, it is important to acknowledge that Saudi Arabian authorities have done a commendable job slowing down the growth of per capita emissions. From 2000–2009 Saudi Arabian per capita emissions increased by only 16% while Chinese emissions increased by 113%. Iran, India and Indonesia also witnessed notable emissions increases of 48%, 38% and 36%, respectively. At the same time, Saudi Arabian authorities could be wise to consider competing with Brazil, Taiwan and Mexico, where per capita emissions were checked while the economy grew at a modest rate. Such an aggressive carbon management policy will not only improve the lives of the citizens, but also prepare Saudi Arabia for any future emissions reduction mandate set by global environmental treaties. 3.2.

Primary data analyses

Mean importance scores of Saudi Arabian managers’ assessment of their employers’ sustainability and carbon management practices are summarised in Table 4. All six employers’ related questions received fairly low mean scores. The mean scores varied from 2.82 to 3.78 on a seven-point scale. Standard deviation for all the six questions is close to 2.0 and considered to be high, indicating much variation in the importance ranking by the surveyed managers. Few managers seem to ‘strongly agree’ and few others ‘strongly disagree’ with the questions. The two relatively high mean scores are associated with the questions about welldefined sustainability/carbon management policies, and active implementation of these policies (mean score 3.78 and 3.61). The satisfaction level with employers’ policies received a comparable score of 3.68. One of the possible explanations of low scores is the effectiveness of an internal reward system implemented by the surveyed Saudi enterprises. The question, ‘My employer rewards sustainability-related activities’, received a low score of 2.97, indicating lack of positive reinforcement Table 4. Mean importance score of sustainability and carbon management strategies within Saudi enterprises.

1 2 3 4 5 6 7

Sustainability/carbon management questions

Mean score

S.D.

My employer has a well-defined sustainability and carbon management policy/strategy I am satisfied with my employer’s carbon management policies My employer rewards sustainability-related activities My employer is actively pursuing low-carbon practices Most of the managers in my organisation understand carbon management and sustainability issues My employer is under pressure from other stakeholders (consumers, suppliers, employees) to reduce emissions Saudi Arabia should adopt a clear carbon management policy forcing corporations to reduce their carbon emissions

3.78

2.022

3.67 2.97 3.61 2.82

1.974 1.807 1.881 1.777

3.52

1.848

5.54

1.636

Notes: Mean scores are derived from a 7-point Likert scale where 1 ¼ strongly disagree and 7 ¼ strongly agree. N ¼ 117.



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by business enterprises in Saudi Arabia. Managers appear not to be supported and appreciated if they try to pursue sustainability and carbon management policies, despite the fact these policies are officially supported by their employers. The results indicate a lack of commitment to environmental issues by top management within these enterprises. The findings of the first four questions (Table 4), and the analysis of secondary data, answer Research Question 1, and shed light on the current status of carbon management policies. In summary, Saudi Arabian enterprises have embarked on the path of sustainability / carbon management, but there are some inconsistencies in policy implementations. Another possible explanation for lack of coherent sustainability and carbon management policies is a relatively low score of 2.82 to the question, ‘Most of the managers in my organisation understand carbon management and sustainability issues’. Saudi managers need to be educated about environmental challenges related to their enterprises. Managers also need guidance in formulating strategies to lower their corporations’ carbon emissions and move toward a path of sustainability. Saudi enterprises can organise educational seminars and courses for their managers. Low-carbon strategies cannot be implemented unless they bring all mangers to the same level of awareness. The findings of this question help to illuminate issues raised in Research Question 2. Survey results appear to indicate that the surveyed Saudi business enterprises are also under no great pressure from other stakeholders in the country to reduce carbon emissions and pursue sustainable goals (mean score of 3.52). The final question received a score of 5.54, suggesting surveyed managers’ desired to see an active and decisive role from their governmental bodies regarding domestic environmental policies and international agreements. Responses to these two questions are invitations for a proactive role by the government and citizens in changing the behavior of Saudi business enterprises. The findings of these two questions respond to Research Question 3. For hypothesis testing, data were grouped into public and private sector categories. It is hypothesised that private sector enterprises are better prepared to manage their carbon emissions, because public sector enterprises are usually managed by a national government, and the Saudi government has not fully embraced sustainability and low-carbon policies. On the other hand, private sector enterprises are responsive to international developments, the economic bottom line, and they may often be dealing with environmentally-conscious multinational corporations. An independent-sample t-test was employed to test the difference in mean scores of both groups. The t-test results and mean importance scores of both groups are presented in Table 5. Private sector managers ranked their employer higher in all questions presented to them. Private sector business enterprises are influenced by global market forces and they are willing to deviate from the official government policies. Private sector managers, along with public sector managers, believed ‘most of the managers in my organisation’ did not understand enough about sustainability and carbon management issues. The first four questions were directly related to the hypothesis. The t-test results for the first four questions are statistically significant, supporting the null hypothesis. Some private sector enterprises may be subsidiaries or affiliates of a multinational corporation; therefore, their attitudes about environmental issues are more in line with trends among global corporations. The Saudi Arabian private sector is more flexible and better adapts itself to new realities.

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Table 5. Mean importance score of sustainability and carbon management strategies in public and private sector enterprises.

1

2 3


4 5

6

7

Sustainability/carbon management questions

Mean for public sector

Mean for private sector

t-value

p-value

My employer has a welldefined sustainability and carbon management policy/ strategy I am satisfied with my employer’s carbon management policies My employer rewards sustainability-related activities My employer is actively pursuing low-carbon practices Most of the managers in my organisation understand carbon management and sustainability issues My employer is under pressure from other stakeholders (consumers, suppliers, employees) to reduce emissions Saudi Arabia should adopt a clear carbon management policy, forcing corporations to reduce their carbon emissions

3.07

4.81

5.054

0.000

3.09

4.52

4.137

0.000

2.61

3.48

2.596

0.011

3.19

4.23

3.064

0.003

2.71

2.98

0.793

0.430

3.39

3.71

0.949

0.345

5.41

5.73

1.046

0.298

Note: Mean scores are derived from a 7-point Likert scale, where 1 ¼ strongly disagree and 7 ¼ strongly agree. N for public sector ¼ 70 and for private sector ¼ 48.

Private sector managers believed their employer had a well-defined sustainability and carbon management policy/strategy. Private sector managers were considerably more satisfied with carbon management policies and believed their employer to be pursuing low-carbon strategies, compared to their public sector counterparts. Private sector managers also believed their employer rewarded sustainability-related activities comparatively more than public sector managers; however, the scores were relatively low in both private and public sector enterprises. The findings indicate the lack of a reward mechanism across most Saudi Arabian enterprises regarding the pursuit of low-carbon and environmentally-friendly measures, even when these measures are in alignment with the organisation’s stated policies. A possible explanation for low emphasis on sustainability and carbon management policies among Saudi enterprises probably lies within responses to the sixth question (‘My employer is under pressure from other stakeholders . . . ’). The mean agreement scores for public and private sectors were 3.39 and 3.71, and the differences were not statistically significant. Low mean scores indicate a lack of pressure from citizens, government, consumers and suppliers. Citizens and government can demand that Saudi enterprises adopt more environmentally-friendly policies. The findings of the last question (‘Saudi Arabia should adopt a clear carbon


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management policy, forcing corporations to reduce their carbon emissions’) received relatively high scores of 5.41 and 5.73 for the public and private sectors, but the difference was not statistically significant. The findings of the primary data indicate Saudi managers’ desire for their government to play a leading role in carbon management policies.


4.

Limitations of the study

Secondary sources of information are generally not updated in Saudi Arabia; thus, some of the available information presented in this report may not be as current as sources available in developed countries. In primary research and hypothesis testing, the selection of the representative sample proved somewhat challenging. Most of the surveyed managers were from urban areas (Jeddah, Riyadh and Al-Qaseem) but the findings have been generalised for the entire Kingdom of Saudi Arabia, which may or may not be fully represented by the sample. In addition, there may be contradictions between the middle-level and senior managers’ perceptions about Saudi Arabian business enterprises. 5. Conclusions and implications The results of this study shed new light on the current status of sustainability and carbon management practices of the Saudi Arabian government, business enterprises and perceptions of Saudi managers. The findings highlight subtle differences between the Saudi Arabian enterprises’ stated goals and perceptions of managers within these enterprises. There also seemed to be a dichotomy between the Saudi government’s position relating to the international treaties, domestic environmental legislations and Saudi managers’ expectations. Surveyed managers reported a desire for their government to play a decisive and proactive role in dealing with sustainability and carbon management policies. The Saudi Arabian government may not have an aggressive carbon emissions reduction policy at home and abroad, but careful reviews of literature and data do not support the opinion of many critics (Barnett 2008, Depledge 2008) that the Saudi Arabian government has not been positive in their engagement with global and domestic environmental issues. The Saudi Arabian government is trying to balance their carbon management goals with their desire to maintain their fossil fuel export income. The Saudi Arabian position in global environmental treaties, however, appears consistent with most of the non-Annex I developing countries, adhering to the principles of distributive justice and pursuit of national interests. Such a response to the national and global environmental challenges is consistent with the explanations presented by Swazo (2010). Primary research data indicate Saudi business enterprises are at least trying to implement sustainability and carbon management policies, but overall perception scores are somewhat low, suggesting the surveyed managers were not satisfied enough with their employers’ practices. Participating mangers believed there is a need for comprehensive educational programmes for all managers in their enterprises. Saudi enterprises may consider making efforts to redesign reward mechanisms in accordance with their publicly stated carbon management policies. The present reward systems do not appear to effectively support enterprises’ stated carbon management policies, and may be a hindrance to meaningful policy implementations.

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In general, Saudi Arabian enterprises need to focus more on their sustainability and carbon management practices. There is noticeable progress but these issues have not received full attention from senior management and the Saudi Arabian government. Public sector enterprises must devote more resources to this goal due to what appears to be a weaker position in this arena, since mean importance scores of all research questions were low in public sector enterprises, compared with private sector enterprises. Overall low scores to all research questions in Saudi enterprises, and particularly lower scores in public sector enterprises, pose future challenges for Saudi Arabian enterprises and government. Findings of this study can also be useful for the Gulf Cooperation council (GCC) member countries and other Oil and Petroleum Exporting Countries (OPEC), because those countries are also going through the same debate between the use of fossil fuel and the level of carbon emissions reduction.

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