MBRSG Supports Regional Governments’ Efforts to Embrace Green Transformation and Global Climate Objectives
The Mohammed bin Rashid School of Government (MBRSG) has published two new regional reports outlining new tools and policies for governments in the Middle East to adopt in order to accelerate the shift to a low-carbon economy, in line with MBRSG’s commitment to supporting regional governments’ efforts to embrace the green transformation, achieve international climate goals, and ensure sustainable economic development.
Titled
‘Recovering Better: A Green, Resilient and Just Recovery in the Middle East’, the project was funded by HSBC and produced two regional studies:
‘Aligning Policies with Green, Resilient and Just Recoveries in the Middle East’ and
‘Financing a Green Transition in Middle East’.
The reports put forward a series of regional and country-level recommendations for eight Middle Eastern countries: Bahrain, Egypt, Kuwait, Iraq, Oman, Qatar, Saudi Arabia, and the UAE that could aid in achieving the UN Sustainable Development Goals (SDGs) and contributing to the Paris Agreement on climate change.
The first report,
’Aligning Policies with Green, Resilient and Just Recoveries in the Middle East’ presents an overview of government rescue and recovery fiscal spending and policies throughout the first year of the COVID-19 pandemic, assessing their contributions to green, resilient, and just recoveries.
“In a world that is now clearly in the recovery stage of the COVID-19 pandemic, Middle Eastern governments have an opportunity to realign development to greener, more environmentally resilient and just pathways. Recovery policies should not only aim to take short-term action, but also address the longer-term goal of diversifying economies away from hydrocarbon dependence, laying the foundations for agile and resilient governments, economies, and communities,” asserted MBRSG’s Executive President H.E. Dr Ali bin Sebaa Al Marri. “MBRSG remains committed to using our research expertise and capabilities to compile eye-opening reports that can guide government leaders – both present and future – to navigate difficult situations and make informed, data-based decisions.”
Meanwhile, Dr. Mari Luomi, non-resident fellow at MBRSG and co-author of the first report, said: “In 2020, low oil prices impacted the ability and willingness of the region’s oil producers to spend on stimulus measures. The first year of the pandemic saw few examples of green, recovery-oriented policies in the Middle East. Change aversion in times of low revenue and a health crisis is understandable. However, the past year has seen a significant rise in ambition around climate change pledges, in particular. Governments now have to prepare detailed implementation roadmaps, which should put people at their core and use ‘green’, ‘resilient’ and ‘just’ as their guiding principles.”
The first report concludes with recommendations on immediate actions to put the region on track for a sustainable, low-carbon future. It calls on governments to adopt best practices in developing and implementing recovery policies; remove obstacles and disincentives to better recoveries, enable and incentivise better recoveries, support resilient and just transitions in hydrocarbon-intensive sectors, and explore regional and international cooperation opportunities to accelerate climate action and circular economies.
Moustafa Bayoumi, Research Associate at MBRSG and co-author of both reports, explained: “There are actions governments can take now that would have a big impact, put the Middle East at the forefront of the energy transition, and make it more attractive for green investment. The region has an opportunity to capitalise on its resources, create jobs, and tackle climate change, but this will require greater efforts from both the public and private sector.”
The second report,
‘Financing a Green Transition in Middle East’, focuses on how the region can finance a post-COVID green recovery. Governments in the Middle East are well-positioned to shape how green finance can be raised and channelled, the report evidences. According to the World Bank, government expenditure as a percentage of GDP is high in many of the countries studied, averaging 20% of GDP and reaching 28% in Saudi Arabia, compared to a global average of 17%. The Middle East region is also home to some of the world’s largest sovereign wealth funds, alongside many powerful state-owned enterprises.
“HSBC is playing a leading role in mobilising the transition to a global net-zero economy, not just by financing it, but by helping to shape and influence the global policy agenda. This report sets out measures the Middle East region can implement to ensure competitiveness and connectivity but also stimulate new sectors, employment and business models to attract international investment flows,” said Sabrin Rahman, Managing Director - Head of Sustainability for Europe and the Middle East at HSBC.
The report outlines two ways Middle Eastern countries can increase green investment from the private sector: first, improve the ‘enabling environment’ to enhance the viability of sustainable investments. Countries could launch green investment banks, establish entities to facilitate energy efficiency markets, and develop a common green taxonomy.
Secondly, adopt specific financial and economic tools to raise and deploy capital, manage risks, and mobilise private-sector investment. Countries could issue green bonds or sukuk, tap into international climate finance, and use sovereign wealth funds and state-owned enterprises to finance and operate new low-carbon industries.
“There are areas where collaboration among countries in the Middle East has the potential to be a game-changer in the transition to net-zero. For example, establishing a Middle East carbon market would be a cost-effective way of lowering carbon emissions while remaining regionally competitive. Creating a standard definition or ‘taxonomy’ for what counts as ‘green’ would bring clarity to investors, unlock sustainable finance, and avoid greenwashing,” said Jeffrey Beyer, Managing Director of Zest Associates and co-author of the second report.
Both reports and datasets are available in full on:
https://www.mbrsg.ae/financing-a-green-transition
The authors of the two reports hope it will be a resource for governments in the Middle East region as they look to transition to low-carbon, resilient economies, and attract investment into renewable energy projects, energy efficiency improvements, and green buildings.