This chapter examines the implications of Saudi Arabia’s net zero by 2060 goal for domestic politics and on the kingdom’s stature in the international community. The gargantuan task of decarbonizing Saudi Arabia is evident in its disproportionate oil use: The kingdom is the world’s No. 4 consumer of oil, despite overseeing the world’s 20th biggest economy and its 41st largest population. There are legitimate doubts about the credibility of Saudi commitment to net zero, given the regime’s track record of noncompliance with prior clean energy goals. A realistic net-zero undertaking would require an overhaul of a fossil fuel-driven society and economy in less than four decades. Sweeping changes would affect the consumption of energies and services, resulting in enormous shifts in ingrained behaviour and in consuming technologies. Difficulties aside, Saudi Arabia holds major advantages in decarbonization. These include unused land with copious solar radiation, as well as geological storage near carbon emissions clusters. Since the global transition could not happen without the kingdom’s cooperation, a documented achievement of decarbonization milestones would increase global goodwill and provide added credibility required to shape the energy transition in ways that could ensure long-term roles for hydrocarbons.

Our review of climate economics begins with the Kaya identity, which portrays our emissions pathway not as a smooth glideslope to net zero but as a tug of war between opposing forces. We then review the stunning impact that continued compounded economic growth could have on the ability of future generations to adapt to climate change, particularly in the Global South. The concepts of externalities and market failures are considered, along with the widely held view that a significant element in any climate solution will need to be some form of carbon tax. The recognition that mitigation comes at a cost leads to the question of climate cost/benefit analysis and the notion that the economically optimal quantum of further climate change that rational actors might prefer would not necessarily be zero. We close by pivoting to fat tails and the extent to which opting for some economically optimal amount of climate change may expose the future to small probabilities of utterly unacceptable outcomes and therefore unjustifiable risks.