The Prospects of The Green Transition in The Arab Region: State-Society Actors, Power Relations, Interests and Coordination

This paper investigates how the comparative power of various state and society actors and their collective utilities from the green transition—as reflected in their perceived losses or gains from the transition—affect the prospects of the energy transition in the Arab region. The paper begins with a theoretical discussion that maps out the important actors related to the green transition and their comparative power, identifying them as the state, labor, big business tycoons, and small and medium enterprise (SME) entrepreneurs. Then, the various actors’ utilities from the green transition are considered, where the sources of the different utilities are derived from the effect of industrial policies that impact the green transition. The main focus here is on the development of linkages, structural transformation, and energy subsidization policies. This discussion leads to the formulation of a theoretical mathematical model, from which several hypotheses are derived. After the theoretical model is translated into a regression model, the paper discusses the results and how they compare to the hypotheses, followed by a brief analysis of some case studies to better understand the results. The paper concludes that in countries with a more dominant state and weaker social actors, the green transition is more likely to primarily follow the interests of the state regardless of social actors’ interests. In more balanced state-society relations, however, the higher the interests of the various social actors, the more likely the green transition will proceed. In these settings, the green transition should be supported by tycoons and entrepreneurs through more innovation-fostering policies, labor through better structural transformation policies, and both tycoons and labor through lower energy subsidies.