DUBAI, UAE — The Middle East and North Africa (MENA) region, with its diverse landscapes ranging from arid deserts to coastal areas, has long been vulnerable to the impacts of climate change.
Countries in this region face numerous challenges, including water scarcity and extreme temperatures, making them particularly susceptible to the adverse effects of a changing climate.
Understanding the current state of climate change in the MENA region and examining the strategies adopted by different countries to cope with this pressing issue are crucial for sustainable development and environmental preservation.
Dharmendra Hiranandani, Senior Manager at Bain & Company, highlights the severity of the situation, noting that the region’s temperature is rising at twice the global average.
At A Glance MENA's Climate Vulnerability: The region faces challenges like water scarcity and extreme temperatures, heightening its susceptibility to climate change impacts. Temperature Rise Warning: Dharmendra Hiranandani notes that the MENA region's temperature is increasing at twice the global average, potentially leading to a 4-degree Celsius rise by 2050. Water Scarcity and Economic Impact: Dwindling water levels and extreme weather events are significantly affecting daily life and the region's economy. GCC vs. Non-GCC Countries: GCC countries have more resources to combat climate change, while non-GCC countries lack sufficient resources. Balancing Economic Growth and Sustainability: Managing climate change without compromising economic development is crucial for the MENA region. IPCC Report Findings: The MENA region faces increased heatwaves and reduced rainfall, threatening food security and biodiversity. Business Disruption Risks: Climate change could disrupt business continuity, potentially impacting up to 20% of the region's GDP by 2050. Consumer Awareness and Expectations: About half of the consumers in the region are aware of climate change, with 70% noticing increased heatwaves and air pollution. Corporate Climate Action: Companies like Saudi Aramco and Majid Al Futtaim are taking more aggressive climate actions than their governments. Decarbonization Strategies in MENA: The region's optimal decarbonization pathways are primarily technology-based, focusing on energy efficiency, renewable energy, and carbon removal.
If this trend continues, the MENA region will experience a temperature increase of 4 degrees Celsius by 2050, double the global average. This rise in temperature exacerbates other vulnerabilities like water scarcity and flooding.
Water levels have already dropped to one-seventh of international levels, amplifying the impact of climate emergencies. Extreme weather events significantly affect daily life, business continuity, and all aspects of the region’s economy.
Hiranandani describes the MENA region as not being a single entity. On one hand, the GCC countries, with higher emissions and GDP per capita, have greater emission intensity per capita and more resources to address climate issues.
On the other hand, non-GCC countries, characterized by lower emissions and GDP per capita, lack adequate resources to tackle these challenges. This distinction creates two subgroups with different needs, especially for non-GCC countries.
As the world grapples with a cost-of-living crisis that affects fiscal space, managing the climate transition without compromising economic development or poverty reduction becomes vital. Thus, governments in the MENA region must collaborate to address these issues effectively.
The region’s temperature is rising at twice the global average… by 2050, the MENA region will experience a temperature increase of 4 degrees Celsius.
Dharmendra Hiranandani, Senior Manager at Bain & Company
Key challenges
Climate change is exacerbating existing environmental problems in the MENA region. Rising temperatures, erratic rainfall patterns, and prolonged droughts are significantly impacting water resources, agriculture, and biodiversity.
The Intergovernmental Panel on Climate Change (IPCC) reports indicate that temperatures in the MENA region are rising faster than the global average, with projections of increased heatwaves and reduced rainfall in many areas. These changes threaten food security, exacerbate water scarcity, and intensify the risk of desertification.
According to Hiranandani, one of the most challenging aspects of managing regional differences is balancing growth against the transition to sustainable practices without hindering economic development and poverty alleviation. Extreme weather events, for example, cause significant business continuity issues and disruptions, which are exacerbated by these climate challenges and regional differences.
“All of these factors, including long-term climate implications and extreme weather events, are projected to impact business continuity or disruption, with estimates ranging as high as 20 percent of the region’s GDP by 2050,” Hiranandani told TRENDS.
Addressing climate change involves more than just the natural environment; it also requires considering the economic contexts of different regions. There is a growing global pressure for action on climate change, with governments in less affluent regions increasingly demanding climate action from businesses.
“This puts additional pressure on businesses to adopt sustainable practices and meet emission objectives,” Hiranandani explained. In the export-driven MENA region, adapting to tightening global regulations on emissions and sustainability practices is becoming increasingly crucial for businesses to stay competitive and contribute to global sustainability. “These are the three ways I believe the MENA region’s economy is being impacted by climate change,” Hiranandani said.
On the other hand, Hiranandani emphasized the requirements of the Paris Agreement for countries to make Nationally Determined Contributions (NDCs). He noted that all nine countries in the MENA region studied by Bain & Company have set NDC targets. However, only four GCC countries in the region have established net zero targets, while the remaining non-GCC countries, at least those included in the study of nine, still lack them.
He pointed out that 60 percent of the region’s emissions have been net zero in the last two years, particularly in major economies like Saudi Arabia and the United Arab Emirates, which have strengthened their NDCs.
By 2030, Saudi Arabia aims to reduce emissions by 26 percent, and the UAE by 31 percent, surpassing their previous commitments. “From the government’s standpoint, ambition is growing, and we see the same trend among consumers,” he said.
“We conducted a regional consumer survey that included the nine largest economies in the region. About half of regional consumers are aware of and concerned about climate change. Indeed, 70 percent have noticed increased heatwaves and air pollution. So, they expect businesses to act, and actions must be implemented. For example, early adopters in the region, such as Saudi Aramco and Majid Al Futtaim, are taking more aggressive actions than their national governments have promised,” Hiranandani said.
Hiranandani believes that, given the region’s natural ecology, the optimal decarbonization pathways will be primarily technology-based. This means that the region would benefit more from working on technology-based solutions.
The priorities, he suggests, can be summarized in three steps:
Consuming Less: This means prioritizing energy efficiency and value chain carbon capability. Technology-based solutions are a way to decarbonize by reducing current emissions or the emissions produced.
Greening the Supply: It involves utilizing as much renewable energy as possible in the power mix and investing in clean fuels like pure hydrogen and sustainable aviation fuel.
Managing the Rest. This pertains to carbon removal strategies, including the development of technologies like direct air capture, as well as specific nature-based solutions that align with the region’s ecology, such as preserving mangroves. These strategies outline how the region should prioritize its efforts in addressing climate change.