The transition to sustainable energy has a cost attached for sure, it’s just whether that will be paid now or in decades to come, and what the final price will ultimately be
As the United Nation’s 26th Climate Change Conference (COP26) continues, countries were asked to come to the event with innovative plans that address the growing threats around extreme weather events, economic instability, and climate refugees.
Many are skeptical about whether COP26 will have a meaningful impact; industrialised countries have come under heavy criticism for committing to broad and inefficient pledges that don’t rise to the seriousness of the occasion.
In order to mitigate the most serious impact of climate change, each country’s commitments must intentionally draw on their unique position and resources. As a group of wealthy, stable, investor-friendly economies, the GCC is uniquely positioned to lead, and needs to capitalise on the economic benefits of the sustainable energy industry and provide support for the wider region.
Renewable energy generation is becoming more cost effective and more popular, with renewable sector FDI into emerging regions having a 40 percent increase between 2014 and 2019.
Historically, a lack of urgency has delayed the region’s transition to sustainable energy, but with an annual 8 percent increase in electricity demand – meaning capacity needs to double every decade – the need to rapidly transition cannot be ignored. This opportunity can, and should, be seized by GCC countries, known for their hydrocarbon reservoirs and some of the highest solar exposures in the world, along with the large areas of flat land required for large-scale solar plants.
At the same time, ambitious diversification plans and real estate mega projects within the region could potentially contribute 17.5 percent of global greenhouse gas emissions, which has meant that GCC governments have had to look at adopting circular economy practices at the foundation of these plans.
Projects such as The Line, from Saudi Arabia’s Neom, and the Red Sea development, are expected to be powered 100 percent by clean energy, meanwhile FIFA World Cup stadiums in Qatar are being built to sustainable standards and are committed to achieving a minimum 4-star certification for design and construction management.
Closer to home, at Expo 2020 Dubai, renewable energy systems have been installed on permanent buildings and 90 percent of materials were procured in line with sustainable materials guidelines.
The Sustainability Pavilion at Expo 2020 Dubai.
It was interesting to see leaders from the region come together last month for the Middle East Green Initiative summit, clearly showing what an impact strong regional alliances can have in this area in terms of knowledge share, driving green investment, and fostering climate diplomacy.
Working together has clear advantages for green employment opportunities and R&D investment. The GCC’s renewable energy targets could create an average of 140,000 direct green jobs annually and for these giga-projects to succeed, there will be increased demand for skilled labour.
In addition, intensive investment in R&D can be disseminated across the wider Middle East and can act as a blueprint to address region-specific challenges for countries not able to invest in similar R&D funding.
What is apparent, however, is that the region needs to act fast as carbon emissions are rising, and the cost of inaction is too great to be ignored. Not only are these valuable opportunities ripe for the taking, but there is too much at stake if the GCC doesn’t act soon.
The global impact of climate change has some concerning consequences for the region, including water scarcity – key for countries that rely on energy-intensive desalination plants for their water supplies and have rapidly increasing populations. And it’s not just water, we don’t have significant enough control over food sources in the region either, and rely heavily on imports. Achieving food security is built into national priorities, but the challenge will not get easier as climate change impacts crop production worldwide.
The GCC’s renewable energy targets could create an average of 140,000 direct green jobs annually.
Looking at it from an economic perspective, this could also affect potential investment as companies are increasingly basing their investment decisions on sustainability. BlackRock, the world’s biggest asset manager with more than $7 trillion under management, has already announced it will exit all investments considered to have a “high sustainability risk”, and we can only imagine that more will follow their lead.
Moving forward, the transition to sustainable energy has a cost attached for sure, it’s just whether that will be paid now or in decades to come, and what the final price will ultimately be.
Government entities in the GCC are already demonstrating remarkable growth, capitalising on their unique position to secure a strong and sustainable future, not only for themselves, but also for their neighbours in the wider Middle East.
Noha Aldhahri, consultant, OCO Global.
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By Noha Aldhahri
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The GCC’s role in climate change equation
The transition to sustainable energy has a cost attached for sure, it’s just whether that will be paid now or in decades to come, and what the final price will ultimately be
Noha Aldhahri, consultant, OCO Global.
As the United Nation’s 26th Climate Change Conference (COP26) continues, countries were asked to come to the event with innovative plans that address the growing threats around extreme weather events, economic instability, and climate refugees.
Many are skeptical about whether COP26 will have a meaningful impact; industrialised countries have come under heavy criticism for committing to broad and inefficient pledges that don’t rise to the seriousness of the occasion.
In order to mitigate the most serious impact of climate change, each country’s commitments must intentionally draw on their unique position and resources. As a group of wealthy, stable, investor-friendly economies, the GCC is uniquely positioned to lead, and needs to capitalise on the economic benefits of the sustainable energy industry and provide support for the wider region.
Renewable energy generation is becoming more cost effective and more popular, with renewable sector FDI into emerging regions having a 40 percent increase between 2014 and 2019.
Historically, a lack of urgency has delayed the region’s transition to sustainable energy, but with an annual 8 percent increase in electricity demand – meaning capacity needs to double every decade – the need to rapidly transition cannot be ignored. This opportunity can, and should, be seized by GCC countries, known for their hydrocarbon reservoirs and some of the highest solar exposures in the world, along with the large areas of flat land required for large-scale solar plants.
At the same time, ambitious diversification plans and real estate mega projects within the region could potentially contribute 17.5 percent of global greenhouse gas emissions, which has meant that GCC governments have had to look at adopting circular economy practices at the foundation of these plans.
Projects such as The Line, from Saudi Arabia’s Neom, and the Red Sea development, are expected to be powered 100 percent by clean energy, meanwhile FIFA World Cup stadiums in Qatar are being built to sustainable standards and are committed to achieving a minimum 4-star certification for design and construction management.
Closer to home, at Expo 2020 Dubai, renewable energy systems have been installed on permanent buildings and 90 percent of materials were procured in line with sustainable materials guidelines.
It was interesting to see leaders from the region come together last month for the Middle East Green Initiative summit, clearly showing what an impact strong regional alliances can have in this area in terms of knowledge share, driving green investment, and fostering climate diplomacy.
Working together has clear advantages for green employment opportunities and R&D investment. The GCC’s renewable energy targets could create an average of 140,000 direct green jobs annually and for these giga-projects to succeed, there will be increased demand for skilled labour.
In addition, intensive investment in R&D can be disseminated across the wider Middle East and can act as a blueprint to address region-specific challenges for countries not able to invest in similar R&D funding.
What is apparent, however, is that the region needs to act fast as carbon emissions are rising, and the cost of inaction is too great to be ignored. Not only are these valuable opportunities ripe for the taking, but there is too much at stake if the GCC doesn’t act soon.
The global impact of climate change has some concerning consequences for the region, including water scarcity – key for countries that rely on energy-intensive desalination plants for their water supplies and have rapidly increasing populations. And it’s not just water, we don’t have significant enough control over food sources in the region either, and rely heavily on imports. Achieving food security is built into national priorities, but the challenge will not get easier as climate change impacts crop production worldwide.
Looking at it from an economic perspective, this could also affect potential investment as companies are increasingly basing their investment decisions on sustainability. BlackRock, the world’s biggest asset manager with more than $7 trillion under management, has already announced it will exit all investments considered to have a “high sustainability risk”, and we can only imagine that more will follow their lead.
Moving forward, the transition to sustainable energy has a cost attached for sure, it’s just whether that will be paid now or in decades to come, and what the final price will ultimately be.
Government entities in the GCC are already demonstrating remarkable growth, capitalising on their unique position to secure a strong and sustainable future, not only for themselves, but also for their neighbours in the wider Middle East.
Noha Aldhahri, consultant, OCO Global.
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