Saudi Crown Prince Mohammed bin Salman’s ambitious Vision 2030 projects have plunged the country into a significant financial crisis. However, this financial strain is not the only challenge threatening these initiatives. Many projects located in the desert have been halted, and others have been downsized due to insufficient financial resources to sustain what some have called reckless investments.
From the beginning, analysts cautioned Bin Salman against launching these grand projects without thorough feasibility studies that consider costs, potential harms, benefits, and future implications. Nevertheless, the Crown Prince dismissed expert advice and pursued his ambitious vision. Now, the very issues he was warned about have come to fruition.
A recent report from the Stratfor Center highlights a new challenge to the Crown Prince’s vision: climate change. As temperatures rise, Saudi Arabia faces escalating cooling costs to create suitable environments for these projects. The Kingdom’s summer climate is extremely hot, and doubling the cooling expenses could further strain the nation’s budget.
These exorbitant costs have forced the government to reconsider its social contract, shifting the financial burden of living services like electricity and water to the private sector. Observers note that Saudi citizens are already feeling the impact. During the 2024 Hajj season, over 1,300 pilgrims tragically died from heat exhaustion as temperatures soared to 125 degrees Fahrenheit (50 degrees Celsius).
Economists and specialists view this incident as a warning sign. The state must prepare for more intense heat waves and erratic weather patterns in the coming years, with the Gulf region projected to experience higher temperature increases due to climate change.
Addressing these climatic challenges necessitates costly measures, making the economic impact of climate change one of the most significant hurdles to Saudi Arabia’s post-oil economic transformation. The question remains: who will bear the financial burden of this impending reality?
Currently, the likely answer is the Saudi state, which will ultimately pass these costs onto its citizens, potentially leading to political instability. Although Saudi Arabia is largely a hot desert, temperatures are not uniformly high year-round. From autumn to spring, many regions enjoy moderate weather, attracting tourists to its natural landscapes. However, destructive floods, a recurring issue, continue to ravage cities like Jeddah and Riyadh, causing significant damage to properties.
The Kingdom’s financial burden is further exacerbated by the need for technological solutions and robust infrastructure to combat these environmental challenges. These solutions are expensive, consuming billions, which will be explored in the second part of this report.
