It’s Time for a Climate OPEC

Many developments are converging to make climate policy an urgent priority in the Gulf, but the most recent crisis, the U.S.-Israeli war with Iran, risks delaying the very action that has made it more necessary. Climate-induced heat and extreme weather events are becoming a regular feature. Catastrophic rainfall submerged Dubai in April 2024 and struck the UAE again in March 2026, flooding roads and communities from Sharjah to Abu Dhabi. In both cases, precipitation that usually accumulates in a year occurred within 24 hours. Meanwhile, the mixed progress of Gulf gigaprojects suggests that post-oil diversification strategies have further to travel than media announcements imply. The war on Iran and the ensuing unprecedented disruption to shipping through the Strait of Hormuz simultaneously expose the fragility of the hydrocarbon lifeline and give global consumers a sharp new incentive to seek alternatives.

The war also carries a second, less visible cost: it consumes the political bandwidth, fiscal resources, and institutional capacity that climate action urgently requires. As defense budgets surge, sovereign wealth funds absorb revenue losses, and policymakers focus on managing an immediate security crisis, the medium- and long-term threat of climate change risks being quietly displaced from the agenda. Current crises can therefore crowd out slower-moving challenges, even when the latter may prove more consequential over time.

Exposure to Climate Change is Deepening

Climate action ranks among the high-profile policy commitments of the Gulf, alongside security and economic diversification. The region’s engagement with the climate agenda is substantive and longstanding: Abu Dhabi hosts the headquarters of the International Renewable Energy Agency (IRENA); the Gulf Cooperation Council (GCC) has twice hosted the UN Climate Conference, in Doha in 2012 and Dubai in 2023; and flagship projects such as the Mohammed bin Rashid Al Maktoum Solar Park, Masdar City, and Saudi Arabia’s Green Initiative have enhanced the region’s visibility in the global energy transition. These are not marginal or performative commitments.

Much of this engagement reflects an acute understanding that the Gulf is among the most physically exposed regions on earth. Temperatures are rising at roughly twice the global average rate (Figure 1). On the current trajectory, this trend threatens to render parts of the region inhospitable to human life by the end of the century. Even today, mounting cooling and public health costs, a shortened tourism season, growing agricultural stress, and rising restrictions on outdoor construction work are already reshaping Gulf economies. Independent projections suggest the Middle East region could forfeit up to 14 percent of GDP in the long term without serious climate action, a liability carried disproportionately by its most heat-exposed and rapidly urbanizing states.

A second driver of Gulf climate engagement is growing frustration with the West’s handling of the crisis. The Global North, historically the largest producer and consumer of fossil fuels, has so far failed to honor its responsibilities. The UN climate negotiation process, known as the Conference of the Parties (COP), has produced more declarations than decarbonization: global oil, gas, and coal production stand at or near historical records, with the United States responsible for the lion’s share of global increase, and greenhouse gas concentrations are not only rising but accelerating. U.S. President Donald Trump’s decision to withdraw the United States from the Paris Agreement, the UN Framework Convention on Climate Change, and the Green Climate Fund represents the most complete retreat from climate multilateralism in history.

The resulting question for Gulf policymakers is straightforward: why should the GCC states absorb the political and economic costs of climate action while the world’s largest contributor walks away from its commitments, all while hydrocarbon revenues remain essential for financing the diversification strategies on which the region’s economies depend? Yet this dependence continues to shape fiscal planning and investment priorities. Hydrocarbon exports remain high, even as the GCC’s overall trade balance has quietly deteriorated to levels last seen in 2006, indicating that oil revenues are masking a structural erosion that diversification has yet to reverse. The consequences are visible in investment patterns: the GCC devotes only 19 percent of energy capital spending to clean energy, less than a third of the global average. As a result, Saudi Arabia has fallen behind on some Vision 2030 energy targets, while the UAE has struggled to match its own post-COP28 ambitions.

However, this strategy may have an increasingly short shelf life, as economic, regulatory, and political pressures converge. On the demand side, recurring supply shocks are encouraging European and East Asian importers to reduce their dependence on Gulf hydrocarbons, threatening a structural erosion of future export revenues that will outlast any single crisis. On the regulatory side, the European Union’s Carbon Border Adjustment Mechanism (CBAM), which entered its full operational phase in January 2026, represents a qualitative shift. Carbon-intensive Gulf exports, particularly aluminum, are likely to face growing costs in European markets as carbon pricing mechanisms expand and free allocations are phased down to zero. These pressures will intensify as CBAM is extended to a broader range of manufactured goods, as proposed in December 2025. The carbon price is coming to Gulf exports regardless of what happens in multilateral climate forums. The question is whether the Gulf collects that revenue itself or remits it to Brussels.

The Case for Collective Climate Action

GCC countries can no longer afford to wait for the Global North to address a collective action problem it has so far shown little ability to resolve. However, climate governance is difficult for any single country to manage. Recent analysis has documented domestic governance gaps clearly: none of the region’s largest emitters has codified its climate targets into enforceable national legislation, monitoring and verification frameworks remain fragmented, and climate responsibilities are distributed across agencies without clear lines of coordination. These vulnerabilities will increasingly carry a direct financial cost as CBAM compliance requirements tighten. Bridging these gaps requires collective GCC action.

The GCC already has the institutional template it needs. The organization was founded precisely to coordinate shared interests across sovereign states, and its record demonstrates that collective action is achievable when political will exists and incentives are aligned. A reinvigorated GCC climate agenda, backed by a dedicated intergovernmental body, or a “Climate OPEC,” would coordinate and fund the region’s mitigation, adaptation, and climate justice efforts at the scale the challenge demands.

The most immediately tractable first step is a harmonized, region-wide framework for monitoring, reporting, and verifying emissions. Beyond its intrinsic governance value, a credible GCC-wide carbon accounting standard would allow member states to deduct domestically levied carbon costs from their CBAM liability—a financial incentive for cooperation built directly into the EU mechanism’s own design, and one the Gulf would be unwise to leave on the table. GCC-wide emissions trading markets, whose architecture other hydrocarbon-producing regions are already developing under Article 6 of the Paris Agreement, represent a natural and technically well-charted next step.

Over the medium term, a coordinated GCC renewable energy strategy would allow the region to treat its extraordinary solar endowment as a collective asset rather than a set of competing national programs, compressing transition timelines, reducing costs through scale, and presenting a coherent export proposition for green hydrogen to European and Asian markets. Green hydrogen will not be a near-term fix. High production costs, water scarcity, and the gap between global ambition and implementation mean it remains a medium- to long-term opportunity. But the GCC’s comparative advantages are striking, and, crucially, complementary across member states rather than duplicative. Saudi Arabia and Oman hold the best combination of solar irradiance and Red Sea coastline; the UAE’s nuclear capacity opens the door to low-carbon “pink hydrogen”; Qatar’s LNG infrastructure and blue hydrogen expertise fill a different part of the value chain. No single GCC state commands the full stack, but collectively they do. A strong regional institution is the mechanism that converts those complementary assets into a coherent export offer rather than a collection of competing national projects.

The longer-term horizon is more politically demanding: a coordinated, managed drawdown of hydrocarbon production, structured to extract maximum value from remaining reserves while systematically redirecting sovereign wealth and state capacity toward the post-carbon economy. The Gulf is better placed to execute a “leave it in the ground” strategy collectively rather than unilaterally, and a shared institution makes that commitment credible.

None of this requires the Gulf to accept the framing that it is the villain of the climate story, nor to pretend that the Global North’s failures are someone else’s problem. The region’s physical exposure, its institutional inheritance, and the mounting pressure of external carbon pricing mechanisms all provide motivations in the same direction. The current war has produced something that Gulf skeptics long doubted possible: genuine GCC solidarity in the face of a shared existential threat. Leaders who had been on opposing sides of a regional cold war found themselves in rapid coordination as long-dormant collective defense structures were dusted off and the logic of shared vulnerability overrode, however temporarily, the logic of national rivalry.

The same logic of shared vulnerability that has encouraged greater GCC coordination during the conflict should also guide the region’s response to climate change. The creation of a Climate OPEC would require exactly what the war has already demonstrated the GCC can mobilize: collective purpose, shared institutions, and the political will to confront a regional problem through regional action. The question for Gulf policymakers is not whether climate change will reshape the Gulf’s economic and physical landscape—it already is—but whether the GCC will seize this rare moment of collective agency and lead that transformation on its own terms or allow it to be dictated by external pressures.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.