Energy Productivity in the GCC: Evidence From an International Kuznets Curve Analysis

About the ProjectIncreasing energy productivity holds some of the greatest possibilities for enhancing the welfare countries get out of their energy systems. It also recasts energy efficiency in terms of boosting competitiveness and wealth, more powerfully conveying its profound benefits to society. KAPSARC and UNESCWA have initiated this project to explore the energy productivity potential of the Arab region, starting with the six GCC countries. Aimed at policymakers, the project aims to highlight the social gains from energy productivity investments, where countries are currently at, and articulate options for achieving improved performance in this area.Summary This paper explores energy productivity trends at a national level for the countries of the Gulf Cooperation Council (GCC) and puts them in an international context. This analysis can be used as part of an evidence base for setting nationally-appropriate energy productivity targets.The need for this research is motivated by recent volatility in oil markets, which has spurred an urgency among GCC policy makers to find a new growth model that reduces their dependence on oil and gas, currently accounting for between 60 to 90 percent of government revenue. Some effort has been made toward this goal, primarily through diversification and energy efficiency, but with low domestic energy prices a strong feature of GCC markets, whether meaningful progress is being achieved warrants closer attention. To assess this, energy productivity offers a useful metric and strong policy narrative. To support this process, this paper applies an energy productivity Kuznets curve analysis for the GCC and compares this with G-7 countries and Australia. The group of advanced economies investigated shows strong evidence of having successfully decoupled economic growth from per-capita energy consumption – even as per capita incomes rose. GCC countries exhibit this trait only very weakly, if at all. This highlights significant structural challenges the GCC region faces in decoupling per capita income from energy consumption in the context of low energy prices. This paper presents the detailed data and analysis behind its companion Paper Energy Productivity as a New Growth Model for the GCC (Dubey, et al. 2016). This work is part of a program of research being conducted by KAPSARC with the United Nations Economic and Social Commission for West Asia (UNESCWA), aimed at providing the evidence base, policy tools and institutional capacity to improve energy productivity in the Gulf region.

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URI https://datasource.kapsarc.org/api/v2/catalog/datasets/energy-productivity-in-the-gcc-evidence-from-an-international-kuznets-curve-anal
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harvest_source_title KAPSARC Energy Data Portal