“The COP28 climate conference called on nations to decarbonise industries to achieve net-zero targets. What can Gulf states do to ensure they lead the way?”
Year-round sunshine, strong coastal winds and vast swathes of available land: the climate and geography of the Gulf make it ideally suited for the transition to renewable energy.
While abundant fossil fuels drove development in the 20th century, photovoltaic solar, wind power and green hydrogen are key technologies in the region’s road map to a low-carbon future. And the COP28 meeting in December put the six GCC states at the heart of the debate on climate action.
Dr. Nasser Saidi, the former Chief Economist and Head of External Relations of Dubai International Financial Centre, says the meeting has focused minds in the GCC on how it can accelerate decarbonisation and green technology. “The cost of solar and battery storage has fallen significantly, meaning the GCC can increase production and become an exporter of green energy to neighbouring regions and even Europe.”
“The cost of solar and battery storage has fallen significantly, meaning the GCC can significantly increase production and become an exporter of renewable energy to neighbouring regions and even Europe”
This is echoed by Annalena Hagenauer, Middle East Climate & Sustainability Innovation Lead at Boston Consulting Group (BCG), who claims, “The GCC has an incredible opportunity to transition from a global supplier of fossil fuels to a global supplier of green fuels and green energy, building national ecosystems around these industries.”
That’s not to say that investment in green energy projects has been lacking. The UAE, Saudi Arabia, Qatar and Oman all boast multi-billion-dollar projects, including the expansion of solar power, thermal energy and green hydrogen as well as carbon capture and storage. Saidi believes that the region is at the forefront of the development of several other clean-tech sectors.
“District cooling is five to 10 times more efficient than the air conditioning used in the US and Europe. Urbanised cooling will become a major issue, and the GCC has the means and know-how to become a world leader,” he says.
Global demand for clean water is increasing, and the GCC holds 50 per cent of the world’s desalination capacity. As the necessity to purify contaminated water rises, the region’s expertise in desalination and water conservation will be highly sought after, says Saidi. “Additionally, significant investments are being made in agritech, leading to more efficient food production with a 30-40 per cent reduction in water usage. The region’s climate technology represents a genuine growth area and export opportunity.”
“District cooling is five to 10 times more efficient than air conditioning that is used in the US and Europe. Urbanised cooling is going to become a major issue, and the GCC has the means and expertise to become a leader”
For the ambitious decarbonisation targets set out in the Paris Agreement to be achieved, there is a need to accelerate action. “As well as the right conditions and technology, the GCC has the know-how and the ability for governments to act decisively,” says Hagenauer. “The potential that Gulf countries have to accelerate green growth is enormous.”
As the GCC positions itself as a global leader in sustainable technologies, the imperative to align these advancements with comprehensive strategies for net-zero goals is evident.
BCG has published a report outlining how GCC countries can approach net zero and green growth opportunities in a robust way. The first pillar is building and implementing dynamic, country-specific net zero models. The approach incorporates a thorough techno-economic assessment, emphasising the importance of evaluating different decarbonisation levers and solutions while minimising costs.
It prescribes holistic net-zero strategies, considering cross-sector ramifications. “Take the example of electric vehicles,” says Hagenauer. “It’s not enough to incentivise and procure electric vehicles. You also need the infrastructure to charge vehicles and a reliable supply of green electricity.”
Green hydrogen is a pertinent example. The region’s conditions are perfect for abundant generation of this energy source and offer a clear pathway to continued influence in future global energy markets. “The GCC needs green hydrogen to decarbonise the industrial sector,” says Hagenauer. “But there is a chance to invest in extra capacity and develop a growth industry around it. Gulf countries can build very powerful green economies by developing export industries around in-demand resources.”
“Gulf countries can build very powerful green economies by developing export industries around in-demand resources.”
The report outlines three policies that it says are critical to bringing net-zero strategies to life. The first are market-based policies, such as carbon pricing and efficiency support mechanisms.
Second are subsidies and public investments, including the financing of EV charging infrastructure, and land provision for renewables. The final policy area is shaping laws and regulations – for example, green building codes and mandatory recycling.
BCG argues Gulf states must implement and robustly follow national climate action plans to ensure targets are fulfilled. Saidi highlights the UAE’s appointment of a Minister for Climate Change and Environment as an example to follow. “We must ensure that the promises being made today are fulfilled,” he says.
There are a number of reasons to be hopeful, he adds, not least a dynamic leadership that has a proven track record of swift decision-making. “The region also has readily available finance and a history of energy projects, so there’s a solid foundation for a transition to green finance and decarbonisation. The financial centres in UAE and Saudi Arabia could potentially position the GCC as a global leader in green financing, supported by a young and growing workforce.”
“The financial centres in UAE and Saudi Arabia could potentially position the GCC as a global leader in green financing, supported by a young and growing workforce.”
COP28 certainly pushed the GCC further into the global spotlight and conversation around climate action. Hagenauer also believes the conference reinforced a changing mindset in the region, “COP28 showed GCC countries can and will lead the green transition; the Gulf nations drove a lot of progress. It should give governments, businesses and investors in the GCC confidence the region is working with its global partners and engaging in efforts to tackle the climate crisis.”
