Book

Towards EU-MENA Shared Prosperity

Endowed with half of the world’s known oil and gas reserves, the Middle East and North Africa (MENA) region has become a cornerstone of the global ene

Publishing date
17 August 2017

This book was prepared in collaboration with OCP Policy Centre

Endowed with half of the world’s known oil and gas reserves, the Middle East and North Africa (MENA) region became – particularly during the second half of the twentieth century – a cornerstone of the global energy architecture (Yergin, 1991, 2011; Maugeri, 2006). This architecture is currently undergoing a structural transformation, prompted by two different forces: decarbonisation policies and technological developments.

The adoption and quick entry into force of the Paris Agreement (UNFCCC, 2015) marked a major step forward in global efforts to address global warming (IEA, 2016a). For the first time, developed and developing countries committed to act in order to limit global average temperature increase to well below 2°C, and to pursue efforts to further limit this to 1.5°C above pre-industrial levels. This should reinforce strong decarbonisation measures already being undertaken in different parts of the world, such as in Europe.

Meanwhile, technological advancements have significantly increased the cost-competitiveness of low-carbon technologies such as solar and wind power generation, power storage technologies and electric vehicles (IEA, 2016b; IRENA, 2017). This has already started to reshape the global energy system, notably by giving a greater role to solar and wind in the power generation mix. Global energy outlooks (BP, 2017; EIA, 2017; IEA, 2016a) generally see these trends as continuing in the future. Some outlooks even see these trends further accelerating, leading to a peak in global oil demand in the 2020s (BNEF, 2016; Carbon Tracker, 2017; WEC, 2016).

By transforming the global energy architecture, international decarbonisation policies and technological advancements could have an impact on the world’s key oil and gas producing regions, such as the MENA.

Surprisingly, the energy literature presents no comprehensive analysis of the potential impact of the global energy transformation on this region. This paper seeks to fill this gap by investigating the following research question: are MENA oil-exporting countries equipped to prosper in times of global decarbonisation?

We begin with an analysis of the macroeconomic context of the MENA region, showing the persistent over-reliance of MENA oil exporters on the oil rent. The political economy factors standing behind the lack of economic diversification in these countries are then analysed, particularly through the analytical lens of the Rentier State Theory (RST).

By proposing a scenario-based analysis, we then illustrate the potential impact of global decarbonisation on MENA oil exporters. This allows us to illustrate the incompatibility of current MENA oil exporters’ macroeconomic models with a global decarbonisation pathway consistent with the Paris Agreement. Finally, we argue that MENA oil exporters should consider economic diversification as a structural pathway to be pursued in order to ensure their future economic and political stability, even in a decarbonising world.

About the authors

  • Simone Tagliapietra

    Simone Tagliapietra is a Senior fellow at Bruegel. He is also Adjunct professor of Energy, Climate and Environmental Policy at the Università Cattolica del Sacro Cuore and at The Johns Hopkins University - School of Advanced International Studies (SAIS) Europe.

    His research focuses on the European Union climate and energy policy and on the political economy of global decarbonisation. With a record of numerous policy and scientific publications, he is the author of Global Energy Fundamentals (Cambridge University Press, 2020), L’Energia del Mondo (Il Mulino, 2020) and Energy Relations in the Euro-Mediterranean (Palgrave, 2017).

    His columns and policy work are published and cited in leading international media such as the Financial Times, The New York Times, The Guardian, The Wall Street Journal, Le Monde, Die Zeit, Corriere della Sera, Il Sole 24 Ore and others.

    Simone holds a PhD in Institutions and Policies from Università Cattolica del Sacro Cuore. Born in the Dolomites in 1988, he speaks Italian, English and French.

  • Yassine Msadfa

    Researcher at the OCP Policy Center, Yassine Msadfa graduated from Hassan II University with a master degree in Applied Econometrics. Before joining the Moroccan think tank, his research focused on the analysis of the short and long-term dynamics of real estate market in Morocco with an error correction model. Currently his research interest ranges from Commodities market to Trade and industrialization in African countries.

  • Marion Jansen

    Marion is the Chief Economist of ITC and in this position responsible for the ITC flagship publication “SME Competitiveness Outlook”. She previously held senior positions in the World Trade Organization (WTO) and the International Labor Office (ILO).

    Her publications in the field of international trade and global governance include numerous articles on the role of standards and regulations in international trade and notably cover the areas of financial, environmental, food safety and labour market regulation. She was also the co-editor of two ILO-WTO volumes on trade and labour.

    Marion holds a PhD in economics from the Universitat Pompeu Fabra (Barcelona, Spain) and has lectured in different academic institutions on international economics, managerial economics and on the socio-economic impacts of globalization. She is an associate editor of International Economics and chairs the supervisory committee of PRONTO, a pan-European research network on Non-Tariff Measures.

  • Abdelhak Bassou

    Abdelhak Bassou occupied several offices within the Directorate General of the Moroccan National Security where he was Borders’ Division Chief from 1978 to 1993. He was the former Director of the Royal Institute of Police in 1998. He also served as the Chief of Regional Security (Errachidia 1999-2003, Sidi Kacem 2003-2005) and was also Head of the Central General Intelligence from 2006 to 2009. He also contributed to the output of several international organizations endeavors including the Council of Arab Interior Ministers from 1986 to 1992, where he represented the Directorate General of National Security in several meetings. Abdelhak Bassou holds a Master’s Degree in Political Science and International Studies from the Faculty of Law, Economics and Social Sciences of Agdal in Rabat.

  • Mario Filadoro

  • Larabi Jaidi

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