GCC leads in climate action despite fossil fuel reliance

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Saudi Arabia remains among top five in Green Investment, Innovation & Tech, and Governance & Reporting, says a latest report.
  • The UAE, Saudi Arabia, and Qatar outperform 17 other countries in key areas of green investment, sustainable infrastructure, and energy transition, says a report.
  • Leading the green transformation is the UAE, which has been proactively funding a variety of clean energy projects, including solar, wind, and nuclear energy.

KUWAIT — The United Arab Emirates (UAE), Saudi Arabia, and Qatar have emerged as leaders within the Gulf Cooperation Council (GCC) in combating climate change. This notable achievement comes despite their longstanding dependence on fossil fuels, according to a report commissioned by Agility and compiled by Horizon Group.

The report, an in-depth comparison of government and business sustainability policies, investments, and actions across the Middle East and Africa, places South Africa, the UAE, Egypt, and Saudi Arabia at the forefront of the 17-country Middle East and Africa Environmental Sustainability Scorecard.

Agility highlights that this scorecard represents the most thorough analysis yet of country performance in environmental sustainability outcomes, government policies, and corporate practices in these regions.

Horizon evaluated countries across six critical “pillar” areas. The findings indicate that the 17 countries analyzed, although relatively recent participants in global sustainable development, are swiftly advancing their sustainability strategies, programs, and investments.

Aiming to shift the perspective on the Middle East from its traditional view as a region heavily dependent on fossil fuels with high per capita greenhouse gas emissions, and African countries as low greenhouse gas emitters but inactive in environmental initiatives, Horizon set an ambitious goal for the report.

To achieve this, the scorecard utilized 48 performance and progress indicators, encompassing data, regulatory frameworks, policy assessments, incentives, and corporate practices across diverse areas: green investment and technology; sustainable infrastructure and transport; governance and reporting; energy transition; environmental ecosystems; and circularity.

Moreover, to capture the pulse of corporate practices and advancements, Horizon conducted a survey among 647 business executives across the seventeen countries.

The UAE secured the top spot in Sustainable Infrastructure & Transport, Energy Transition, and Environmental Ecosystems. Qatar excelled, clinching first place in Green Investment, Innovation & Tech, and Governance & Reporting.

Saudi Arabia demonstrated its commitment by ranking in the top five in five of the six key pillar areas. Bahrain, with its third-place ranking, showed notable strength in Circularity, while Oman, achieving sixth place, also excelled in this category.

Kuwait, securing the fifth position, stood out in Environmental Ecosystems, a category evaluating air, soil, and water pollution, alongside conservation and biodiversity initiatives.

In a surprising contrast, the six hydrocarbon-rich GCC nations, traditionally known for their energy-intensive economies, were positioned at the lower end of the 17-nation ranking in Energy Transition. This critical category scrutinized aspects like energy supply, the utilization of renewable energy, the role of subsidies and taxes, and the comprehensive energy-transition agendas at both national and corporate levels.

Despite this, the GCC countries are making significant strides in renewable energy and sustainable development, actively seeking to diversify their economies beyond hydrocarbon exports. Leading this transformation is the UAE, the first country in the MENA region to ambitiously set a net-zero target by 2050. The nation has been proactively funding a variety of clean energy projects, including solar, wind, and nuclear energy, thereby diminishing its reliance on natural gas for electricity production.

In a landmark move, Abu Dhabi recently inaugurated the two-gigawatt Al Dhafra solar power plant, ranking among the world’s largest solar installations. This groundbreaking project is expected to electrify 200,000 homes and reduce the capital emirate’s carbon dioxide emissions by over 2.4 million tons annually.

This initiative was spearheaded by the Abu Dhabi National Energy Company, commonly known as Taqa, in collaboration with the clean energy giant Masdar, France’s EDF Renewables, and China’s JinkoPower.

Further bolstering its commitment to a sustainable future, the UAE is developing the colossal five-gigawatt Mohammed bin Rashid Solar Park in Dubai, anticipated to slash 6.5 million tons of carbon emissions each year once fully operational in 2030.

Meanwhile, Saudi Arabia, standing as OPEC’s leading oil producer and the world’s top crude exporter, has embarked on an ambitious journey to confront climate change and significantly slash carbon emissions. These transformative efforts are integral to the kingdom’s comprehensive economic overhaul strategy, aiming to lessen its oil dependency.

With a vision to achieve net-zero carbon emissions by 2060, Saudi Arabia is heavily investing in nurturing its domestic electric vehicle market and fostering the growth of its local manufacturing sector, aligning with its forward-thinking Vision 2030 strategy.

The World Bank has projected the collective economic output of the GCC to reach an impressive $6 trillion by 2050. However, it emphasizes that embracing a strategic “green growth approach” towards economic diversification could potentially elevate this figure to a staggering $13 trillion.

Reflecting the pervasive impact of climate change, the latest report unveils that a significant 97 percent of companies in the Middle East and Africa have experienced its effects, with nearly half acknowledging “severe damage” or a “significant and growing” influence on their business operations.

The report offers a critical insight, revealing that “the private sector in both the Middle East and Africa is lagging behind governments in terms of climate action.” This observation underscores the varying pace of environmental commitment between the public and private sectors in these regions.

Countries are tailoring their sustainability efforts to align with unique factors such as income levels, economic strengths, and energy dependencies. Notably, the high-income, energy-producing Gulf countries are channeling more investments into sustainable infrastructure and ecosystems, demonstrating their commitment to a greener future. In contrast, African economies are setting benchmarks in energy conservation and consumption, showcasing their resourcefulness and adaptability.

In the realm of green investments, which are predominantly directed towards sustainability and renewable energy projects, the UAE, Qatar, Morocco, and Saudi Arabia have taken the lead. These investments reflect a strong commitment to environmental stewardship among these nations.

On the African front, countries like Uganda, Nigeria, Rwanda, Kenya, and South Africa are making significant strides in green transport. South Africa, in particular, stands on the cusp of potentially surpassing Nigeria as Africa’s largest economy next year. It has ambitiously set a net-zero target for 2050, aspiring to become a major producer and exporter of green hydrogen and its derivatives, thereby marking a significant shift in its energy landscape.

Additionally, these African nations were recognized as pioneers in Energy Transition, leading the way in adopting renewable energy sources and sustainable practices.

The report suggests a powerful potential: by “embracing a strategic green growth approach to economic diversification,” the combined GCC economic output, estimated at $6 trillion by 2050, could potentially soar to over $13 trillion. This projection underscores the immense economic benefits of pursuing environmentally sustainable policies.

Saudi Arabia remains among top five in Green Investment, Innovation & Tech, and Governance & Reporting, says a latest report.

Alarmingly, the report unearthed a significant gap in awareness, with 82 percent of African businesses and 49 percent of Middle Eastern businesses yet to grasp the intricacies of the UN-led COP process. This process is crucial for guiding and assessing global efforts in tackling climate change, yet remains underutilized for setting corporate sustainability targets.

Mirroring findings from other recent studies, a staggering 97 percent of companies acknowledged the impact of climate change on their operations, with 49 percent experiencing “severe damage” or a “significant and growing” influence.

The report also emphasized a critical disparity in environmental action: while governments in the Middle East and Africa are progressively advancing in climate action, the private sector is not keeping pace, underscoring a crucial area for improvement in corporate environmental responsibility.

As expected, the prioritization of sustainability initiatives varies widely among countries. Gulf nations with high incomes and energy production capacities are investing more heavily in sustainable infrastructure and ecosystems. Conversely, African countries are excelling in the domains of energy conservation and consumption.

In terms of green investment, affluent and middle-income countries, particularly Qatar, the UAE, Morocco, and Saudi Arabia, are spearheading initiatives. Meanwhile, African countries are focusing more on developing green transport solutions, with Uganda, Nigeria, Rwanda, Kenya, and South Africa leading this charge.

Green building initiatives have emerged as a higher priority for Gulf countries, indicating a regional shift towards more sustainable construction practices. The report also noted that waste management and consumption patterns are closely tied to a country’s wealth, highlighting the economic dimensions of environmental sustainability.