The less oil we purchase, the more we have to pay for it. It sounds crazy but it is exactly what Saudi Arabians are proposing for December's Framework Convention on Climate Change in Copenhagen.
When oil prices peaked last summer at nearly $150 per barrel, the Saudi Arabian government made a spectacular profit. Their revenue surged by 38 percent to an estimated 281 billion dollars for 2008 alone. Now that oil prices are lower, the Saudis want to drive them up, whatever the cost.
So when the industrialized and developed nations of the world meet in Copenhagen this December to try and tackle global warming, the Saudis plan to try to force a subsidy plan into whatever treaty results would force America and Europe to pay them for the oil that we wouldn't buy.
Does this make any sense? Today more than 9.8 percent of Americans, eligible for work, are unemployed and 5.4 million Americans have been unable to find a job for more than six months. And if this is not enough, last September America saw another 263,000 jobs disappear. Clearly we cannot afford to prop up oil prices for Saudi Arabia. But even if we could, it wouldn't be reasonable. No other nation receives a "heads they win, tails we lose" trade agreement and even if they did it would not be moral for the Saudis to ask for one given that the Framework Convention is designed to help combat climate change, an environmental issue that affects us all.
There are many economies that are dependent on the price of a particular raw material. Chile is dependent on metal exports. Their economy is dependent on the price of copper and no one has ever suggested we sign a treaty with them that stipulates that if we stop using copper we still have to pay them. Nor are we insulated against falling demand for our own products. If other nations bought their goods from China rather than us, there is nothing we could do.
The Saudis suggest, though, that what is at issue is the standard of living of the Saudi Arabian people. They suggest that if the price of oil fell then the Saudis would suffer the consequences. This is certainly true. But where were the Saudis when the formation of OPEC drove up the price of oil and hit developing countries the hardest? Where were they when the poor of Africa and Asia suffered?
The fact of the matter is that there are nations far poorer than Saudi Arabia, Kuwait and the other oil producers. Saudi Arabia has a higher GDP per capita than Russia, Poland and Argentina. At $20,500 per year its GDP per capita is more than seven times that of Nicaragua and 29 times that of Niger and Afghanistan. It is our duty to help the least fortunate first, not to subsidize a wealthy nation like Saudi Arabia, perfectly capable of supporting itself.
But even if Saudi Arabia were in a position to demand subsidies, it would be immoral for them to attempt to block the Framework Convention on Climate Change. It would be immoral for them to block what may be the most significant environmental agreement in a decade. If they accept that industrialized nations must reduce their environmental footprint in order to avoid catastrophe, then it is unacceptable that they oppose such efforts.
If the industrial nations fail to reduce their impact on the atmosphere then the effects might range from starvation in developing nations to war between them in competition for scarce resources. This April climate change could have a devastating effect on crop yields in developing nations due to a decrease in annual precipitation according to a report released by in the International Food Policy and Research Institution. Less available water would create an additional strain on swiftly growing populations that might lead to political turmoil or even war in and between developing nations in Africa and South-Eastern Asia.
Thus it is a moral imperative for even moderately developed nations like Saudi Arabia to prevent climate change and not to obstruct attempts to remedy it. Saudi Arabia's demands are unacceptable and America should take notice. We must be willing to use our influence in the region to put the Saudis back in line not only because their demands are unreasonable, but because they are dangerous to the continued peace and prosperity of all nations.



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