Mapping Saudi Arabia's low emissions transition path by 2060: An input-output analysis

Abstract

This study analyzes Saudi Arabia's strategy to reduce emissions by 2060, as outlined in the Saudi Green Initiative framework (SGI). Using a two-stage Leontief input-output model, we analyze economic criteria for meeting the low emissions target and identify potential green project financing sources. The analysis focuses on Saudi Vision 2030's economic diversification initiatives and the transition to a net-zero carbon economy. We provide new estimates of key economic variables, including non-oil GDP, labor market size, and economic diversification metrics. The study quantifies financial needs for green projects, estimates the expected financial gap, and proposes suitable green financial instruments. Findings highlight the necessity of green bonds, projecting their market share to reach 15 % by 2030 and 30 % by 2060, representing approximately $14 billion and $39 billion, respectively. The study anticipates an annual GDP growth of 2.6 % until 2030 and 2 % until 2060, with over 23 million new jobs created. This research contributes a comprehensive framework for Saudi Arabia's economic transformation, emphasizing the critical role of green investments in driving sustainable development. Our findings offer insights for policymakers and stakeholders shaping Saudi Arabia's sustainable future and provide a model for other resource-dependent economies transitioning to low-carbon systems.