With a goal of net zero emissions by 2050, the United Arab Emirates is taking the lead in the GCC with its plans to support zero-emission policies, including an expected investment of about US$ 163 billion in renewable energy over the next thirty years.
At the same time, the number of new enterprises focusing on renewable energy is growing. While existing companies are expanding their businesses by creating environmentally friendly strategies that cut costs and ensure the long-term viability of their offerings.
Yet, the UAE is still working to establish the necessary laws and regulations to bring the country to net-zero energy status. So, what sectors need to change? And what are the challenges?
While defining the required policy framework in the UAE, many changes will happen.
“The net-zero transition demands every sector to change. That includes power, industry, transport, waste, building stocks…” says Simon Birkebaek, Middle East Climate & Sustainability Topic Lead, Partner at Boston Consulting Group (BCG).
He added in an interview with TRENDS: “Actions are already being undertaken, the power sector will need to become fully renewable, transportation should be made electric, and buildings are required to shift towards high energy efficiency – and the materials used in these sectors need to be produced by a transformed industrial sector.”
Yet Birkebaek clarified that “we would also see adverse climate impacts, such as storms, floods, and droughts, which, no matter the stage of the net-zero transition, will grow in magnitude, causing starvation, migration, and economic damages.”
While reducing global energy demand is a step in the right direction, mitigating the worst effects of climate change without requiring dramatic changes in behavior is still possible.
Startups adopt sustainable strategies
Birkebaek considers that the most significant challenge entrepreneurs face while adopting sustainable strategies is the “lack of bankability” for projects, which is a result of the absence of regulations that drive the market or uncertainty in economics, or excessive risks due to immature technology.
He added: “this can lead to difficulties in receiving funding for early-stage technologies, which is why several countries are increasing their funds in disruptive technology to be more commercially ready.
On the contrary, startups can be an excellent asset for governments that aim to obtain sustainable solutions, primarily via the recent technologies they work on, the latest software, and the skilled talents they offer.
The proliferation of digital technologies has shattered established business hierarchies and ushered in an era of dominant new companies. A multi-trillion-dollar market for climate technologies is expected to reshape industries and redistribute value across the economy, spawning new success stories for green startups and nimble incumbents. Those willing to take risks can help their businesses thrive in the long run while contributing to the worldwide effort to combat climate change.
In this concept, Boston Consulting Group partnered with Emirates, Nature-WWF since 2012 and embarked on several projects to stop the earth’s natural environment degradation.
The latest project laid a new foundation for climate action by empowering the youth in the UAE through the innovative flagship and impact-driven Leaders of Change program, which comprised academic and skills training, dialogues engagement, solution ideation, and excursion and mission participation in nature.
Furthermore, in 2020 BCG announced a bold commitment to achieving net-zero climate impact by 2030 and, from there, to become climate favorable, as Birkebaek mentioned.
Currently, BCG follows a three-step Net-Zero Strategy to reduce, remove, engage, and contribute to society by massively investing in work with governments, industries, NGOs, and coalitions for climate impact.