Saudi Arabia to seek compensation for climate pact oil losses

Saudi Arabia and other oil-producing nations stake claim to projected $19bn losses if oil production declines due to global climate deal
John Vidal guardian.co.uk 4 Aug 10;

Saudi Arabia, which has the world's largest oil reserves and earned nearly $300bn in fossil fuel exports last year, will seek financial compensation for any loss it incurs if and when production declines after a new climate change agreement is reached.

The move, which was confirmed by UN officials at the UN climate talks in Bonn this week, matches demands made by the world's poorest countries for money to adapt to climate change.

Saudi Arabia and some other Opec oil-producing countries claim that they will have to adapt their economies to a world which uses less oil and say they could lose as much as $19bn a year if countries are forced to cut fossil fuel use. Their argument is that they have only oil and sand as resources and it would be unfair to penalise them. Saudi Arabia first raised the idea of compensation for lost oil revenues at climate talks in Bangkok last year, in the run-up to the Copenhagen climate summit.

The principle of compensation for countries economically or socially affected by climate change has been established in the UN talks, but there is deep unease that the country which first denied man-made climate change and has long fought a new climate agreement should benefit from money intended to help poor countries.

Delegates from Aosis, the Alliance of Small Island States, this week said that it was "absurd" to allow Saudi Arabia to claim adaptation money.

"It goes against the spirit of the talks, which is to help the poor adapt to something they did not cause," said one diplomat who asked not to be named.

"Besides, the small pot of money expected to be made available [by rich countries] would be seriously diminished if countries like Saudi Arabia are allowed to claim," he said.

Saudi Arabia's plan to claim money is also questioned following a major study by the International Energy Agency last year which found that oil-producing countries would not lose money for many years. This was strongly disputed by the Saudi delegation.