State of play ahead of COP26: Climate Action in the Middle East
Five countries in the Middle East are on the list of top 10 global oil producers, responsible for a quarter of the world’s production in 2020 according to the U.S. Energy Information Administration (EIA). Saudi Arabia also tops the list of global oil exporters. Against this backdrop, it’s not surprising that resource-rich countries in the region face continuous international scrutiny of their climate commitments.
On October 7th, the UAE became the first Gulf country to put green pen to paper, when the country announced a net zero 2050 target and US$163 billion renewable energy investment figure. The effort has been lauded by international leaders, and by the media, as a necessary step forward to help address climate change.
This week, Saudi Arabia concluded three days of climate-focused events, which started with the Saudi Green Initiative Summit on October 23rd. The Kingdom announced a Net Zero 2060 target; a new Nationally Determined Contribution of 278 mtpa; a wave of over 60 government and private sector initiatives worth US$186 billion with timelines up to 2035 and a pledge to join several international climate initiatives. Aramco also announced a Net Zero 2050 target for Scope 1 & 2 emissions. A day later, Bahrain followed suit and announced a Net Zero 2060 target, and three days later, the Head of the Kuwait Investment Authority said the Authority would extend support in delivery of Saudi Arabia’s targets, indicating a regional snowball effect is underway.
Further extending the dialogue, Saudi Arabia convened over 20 Heads of State from the MENA region and multiple international observers including the U.S. Special Presidential Envoy for Climate John Kerry in Riyadh for the first-ever Middle East leadership dialogue on climate. The tangible output? A US$10.4 billion investment for a carbon capture fund and an initiative to provide clean fuel for cooking for over 750 million people. Reception of these ambitious commitments has been largely positive around the world, however as the Middle East goes to COP26, there are a few topics that are likely to be of particular importance for regional leaders:
Quality of life and education: The Middle East is home to over 400 million people, many of whom still have limited access to education and private capital. Balancing between economic growth, social development and sustainability remains the core challenge for many Middle Eastern countries: the region cannot afford to see hydrocarbon sector jobs disappear faster than new, skilled jobs in sustainable industries are generated and filled with local talent. Securing broad green investment will be critical for the green transition to happen at speed.
Renewable energy scale-up: The Gulf region has the benefit of prime natural conditions for renewable energy development and deep pockets to fund the rapid scale-up of clean technologies, enabling a faster pace of change than in many other parts of the world. But in the short- and medium term, the reality is that hydrocarbons are still essential for economic growth. Oil prices are likely to have a critical impact on the pace at which a green energy transition can be delivered.
Emissions measurement: Big hydrocarbon and industrial players are criticized for not setting targets for removing Scope 3 emissions (the result of activities not owned or controlled by the reporting organization). Any agreements made at COP26 on the accountability for this significant volume of global emissions is likely to play a pivotal role in the perception of regional climate targets moving forward.
Disa Tersmeden, Director, Finsbury Glover Hering Middle East