In 2015, global leaders celebrated a landmark moment: the Paris Agreement set the world on a path to limit warming to well under 2 °C, and ideally 1.5 °C. But the more recent assessment is sobering: while progress has been made, the pace is far from what is required. The planet’s annual temperature has already risen ~0.46 °C since 2015.
This sobering global reality has very different implications for countries depending on their primary energy-and-export profiles. Let’s explore what it means for Saudi Arabia and South Africa.
Saudi Arabia: Navigating oil-world reality and the transition – The challenge
Saudi Arabia is deeply embedded in the global oil economy. For decades it has played a central role in supplying crude, fueling the world’s energy-system, and building wealth around that extractive business. The global push to decarbonise threatens to erode the long-term value of oil reserves and the stability of oil-centric economies.
According to the global assessment, fossil-fuel burning (coal, oil, natural gas) continues to emit large volumes of CO₂ and methane, and the reduction in those emissions is too slow. For Saudi Arabia this means: the transition isn’t just about replacing one fuel with another — it’s about re-thinking the role of oil in the future economy, and how the country adapts and transforms.
Opportunities
- Saudi Arabia has the resources (sunlight, land, technical capacity) to accelerate renewable-energy deployment, hydrogen development, carbon capture and storage (CCS). Because the oil economy built up institutional capacity, infrastructure and export networks, the country is relatively well placed to pivot.
- The global move toward cheaper renewables is also a tailwind: renewables are now cheaper than many fossil fuels in many places.
- By strategically linking its oil industry to new low-carbon value chains (for example green hydrogen, petro-chemical feedstocks, or export of low-carbon fuels) Saudi Arabia can turn a potential risk (declining oil demand) into an opportunity.
Risks & key strategic questions
- What happens if global oil demand declines faster than anticipated, leaving stranded assets? The country will need to manage that risk, re-align fiscal strategies and diversify.
- How fast can Saudi Arabia reduce methane and CO₂ emissions in its oil and gas operations, and move toward zero-flaring, improved efficiency, CCS?
- How to balance domestic development (jobs, social services, diversification) with decarbonisation imperatives?
- How to manage the reputational risk: an oil country signalling global leadership on climate while still exporting fossil fuels.
What success could look like
- A clear national roadmap that transitions from “oil-exporter” to “energy-value-creator”, where oil revenues bridge to renewables, hydrogen and new technologies.
- Incremental reduction in upstream emissions, flaring, methane leaks, and increasing capture of CO₂.
- International partnerships (technology, finance) and export of low-carbon hydrogen, for example attracting investment globally.
- A domestic energy transition that ensures jobs, local content and social stability even as oil’s dominance wanes.
South Africa: The coal-legacy economy facing transition
The challenge
South Africa has long depended on coal — for electricity generation, for export, for employment in mining and associated industries. As the world moves away from coal (which is the highest-carbon fossil fuel) the implications for South Africa are profound.
The global data shows emissions are still growing in many regions, and though renewables are growing fast, the world remains off pace for the 1.5 °C goal. For South Africa this means coal-based infrastructure, jobs and export markets face disruption.
Opportunities
- The country has abundant renewable resources (solar, wind), and potential to become a renewable hub for the continent — leveraging sunshine, skilled workforce and existing grid/infrastructure in some cases.
- Transitioning away from coal offers an opportunity for job creation in new sectors (renewables manufacturing, services, grid upgrades) if managed well and with investment.
- International financing (climate finance, green funds) may support the transition, offering South Africa a chance to leapfrog into cleaner energy systems rather than just incremental adjustments.
Risks & key strategic questions
- Social and employment risk: many communities and workers are tied to coal mining and coal power. Mis-managed transition could cause major social disruption.
- Energy security risk: the grid has already had stability issues; shifting away from coal must ensure reliable supply.
- Export risk: if global demand for coal weakens, export revenues drop — investors may run, and stranded asset risk looms.
- Investment risk: South Africa must ensure it attracts sufficient public and private financing, establishes regulatory certainty, modernises governance and grid frameworks.
What success could look like
- A gradual but decisive shift away from coal-fired power, with a phased retirement or repurposing of coal plants, while ramping up renewables, storage and grid modernisation.
- Up-skilling and transition programmes in coal-dependent regions so workers migrate into renewables, grid services and energy-efficiency sectors.
- Secure funding (international and domestic) for the transition with equity, not just debt, to ensure sustainability.
- A national climate strategy aligning with the 1.5–2 °C goals, embedding justice (just transition) and inclusive growth.
Shared themes & cross-cutting insights
- Both oil-rich and coal-reliant countries must recognise that achieving the goals of the Paris Agreement will require speed, scale and systemic change — more than incremental adjustments. The global assessment says the world is off pace. Share Google
- Transition is not just about technology; it’s about policy, finance, institutions, social dimensions (jobs, communities, governance).
- Export-dependent fossil-fuel economies face stranded-asset risk and must plan diversification now, not later.
- Renewable energy is no longer just a future ideal — it is competitive now. That gives all countries an opening to act.
- Equity and justice matter: the transition must embed fairness, especially in places with vulnerable workers and communities reliant on fossil-fuel sectors.
Why time matters
The decade since 2015 offered hope, but the warning signs are clear: the planet is warming faster than the transition is proceeding. For Saudi Arabia and South Africa (and, by extension, all fossil-fuel economies) the message is urgent. The transition window is narrowing.
Getting ahead of the curve — via strong national strategy, investment in clean energy, sound regulation, social planning and global partnerships — is no longer optional. It’s essential.
As one commentator said:
“We’re sort of sawing the branch on which we are sitting.”
For Saudi Arabia, that means leveraging its oil legacy to power a clean-energy future. For South Africa, it means leaving coal behind — not with disruption but with a roadmap of opportunity. The world may be slipping behind the 1.5 °C goal, but the sooner action is taken, the better chance these countries have to thrive in the new global energy era.
