9 GOVERNANCE AMID THE TRANSITION TO RENEWABLE …
249
depending on the scarcity of surface areas available for renewables, recent
trends in solar auctions in the Middle East suggest a remarkable high
level of pricing transparency. In sum, lower rents will, somewhat paradoxically, improve overall governance in the region by improving incentives
for fiscal responsibility and accountable institutions.
The second differing characteristic to note is the diffuse structure
of renewable energy systems. In contrast to oil, revenue generation
from renewable energy is not geographically or vertically limited to
points of extraction. 44 Governments can garner tax revenues across
the value chain: taxing power generators, distributors, storage facilities, and retail providers; electric vehicle manufacturers and retailers;
and end-use consumers in residential, commercial, industrial, and transportation segments. Within the utilities sector specifically, value can be
created (and taxed) across six segments, from planning all the way to
decommissioning. Planning, installation, and grid connection all entail
short-term value and highly-skilled job creation, while manufacturing,
operation, and maintenance offer long-term value creation and opportunities for sustained employment. 45 This decentralized system contains
both capital- and labor-intensive segments, such that a decarbonized, electrified system—much like Mitchell’s (2011) vision of the coal industry in
nineteenth-century England and the US—fosters working-class organizations that press leaders for accountable government. This is especially
the case if the system is not just decarbonized but also distributed and
peer-to-peer. 46
Third, there is a gained advantage of greater energy security not only
in MENA oil-exporting states but especially for the MENA oil-importing
states. 47 Given the latter states’ abundance of wind and sunshine in
contrast to their lack of fossil fuel resources, the oil-importing MENA
states have a clear incentive to develop renewable energy as a solution to threats of possible conventional energy scarcity in the future. 48
Additionally, the increasing volatility of conventional energy prices has
resulted in unpredictable energy bills for these importing countries—
a trend which will be amplified in a future oil-constrained world until
reaching a low-price equilibrium for fossil fuels. The prospect of secure
renewable resource assets is also relevant for oil-exporting states, whose
conventional oil and gas assets tend to be concentrated and vulnerable
to outside threats. The drone attack on Saudi oil processing facilities in
September 2019, for example, exposed a key vulnerability that knocked
249
depending on the scarcity of surface areas available for renewables, recent
trends in solar auctions in the Middle East suggest a remarkable high
level of pricing transparency. In sum, lower rents will, somewhat paradoxically, improve overall governance in the region by improving incentives
for fiscal responsibility and accountable institutions.
The second differing characteristic to note is the diffuse structure
of renewable energy systems. In contrast to oil, revenue generation
from renewable energy is not geographically or vertically limited to
points of extraction. 44 Governments can garner tax revenues across
the value chain: taxing power generators, distributors, storage facilities, and retail providers; electric vehicle manufacturers and retailers;
and end-use consumers in residential, commercial, industrial, and transportation segments. Within the utilities sector specifically, value can be
created (and taxed) across six segments, from planning all the way to
decommissioning. Planning, installation, and grid connection all entail
short-term value and highly-skilled job creation, while manufacturing,
operation, and maintenance offer long-term value creation and opportunities for sustained employment. 45 This decentralized system contains
both capital- and labor-intensive segments, such that a decarbonized, electrified system—much like Mitchell’s (2011) vision of the coal industry in
nineteenth-century England and the US—fosters working-class organizations that press leaders for accountable government. This is especially
the case if the system is not just decarbonized but also distributed and
peer-to-peer. 46
Third, there is a gained advantage of greater energy security not only
in MENA oil-exporting states but especially for the MENA oil-importing
states. 47 Given the latter states’ abundance of wind and sunshine in
contrast to their lack of fossil fuel resources, the oil-importing MENA
states have a clear incentive to develop renewable energy as a solution to threats of possible conventional energy scarcity in the future. 48
Additionally, the increasing volatility of conventional energy prices has
resulted in unpredictable energy bills for these importing countries—
a trend which will be amplified in a future oil-constrained world until
reaching a low-price equilibrium for fossil fuels. The prospect of secure
renewable resource assets is also relevant for oil-exporting states, whose
conventional oil and gas assets tend to be concentrated and vulnerable
to outside threats. The drone attack on Saudi oil processing facilities in
September 2019, for example, exposed a key vulnerability that knocked