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Green Economy and National Security of the GCC

Green Economy and National Security of the GCC

February 5, 2015
Mohammed Abdelraouf
Mohammed Abdelraouf Non-Resident Fellow, Environment and Economy

Since the financial crisis in 2008, discontent and demonstrations demanding a better quality of life, more social equity and environmental justice have taken place all around the world, from Occupy Wall Street in 2011 to the Arab uprisings, and from the Brazilian street protests in 2013 to the People’s Climate March in New York in 2014. It is obvious that the entire ‘system’ – whether related to finance, climate, food, biodiversity or energy – seems to be in a crisis.

The main lesson we learned from the Arab Spring and other demonstrations is that any given country, globally, cannot achieve its national security without a strong and green economy. The green economy can achieve sustainable development with a better quality of life, real jobs, actual investments and social justice.

In the near future, the current trend of brown economy cannot persist. If a country doesn’t have a green economy, nothing else really will work and the country is very vulnerable to unrest, discontent, dissatisfaction, demonstrations among its citizens, cities…etc. at any time. In fact, GCC and UAE especially realized this early enough than many countries worldwide and started early since 2006 thinking of green solution with Projects like MASDAR.

The green economy is something the GCC states simply cannot afford to ignore. It is hoped that this blog will spark new dialogue, and inspire policymakers and researchers of the six Arabian Gulf States to look at the importance of the transition towards the green economy and its impacts of national security.

Governance of the Green Economy in the Gulf

For several decades now, the six member states of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Saudi Arabia, Oman, Qatar and the United Arab Emirates (UAE) – have been financing their socioeconomic development with hydrocarbon exports. While their high reliance on external oil and natural gas revenues has exposed these countries to economic vulnerabilities, the revenues have also enabled the GCC states to build modern infrastructure, sustain high levels of welfare for their nationals, and exert regional and global influence through sovereign wealth and investments. Given their hydrocarbon wealth, the GCC states have built economies that are energy-intensive and rely on a comparative advantage of cheap energy. Similarly, they have allowed domestic energy prices to remain low, creating hard-to-rid patterns of overconsumption of fuels and utilities and locking in energy-intensive infrastructure and industries.

In general there are some important enabling conditions and policies that have to perused if a country aim to shift its economy to a greener one, these include for instance:

From a Gulf perspective, what are the essential conditions and enablers for a green economy? Arguably, these can be synthesised into governance and financing. Good governance, accompanied by what this blog calls ‘green policy’, consisting of enabling public policies and conditions, is a fundamental requirement for any green economy transition.

It can be argued that governance is crucial to the success of any country’s development. In short, governance can be defined as the ‘design and execution of common activities in order to achieve a common goals’. In order for governance to be successful, a number of preconditions need to be fulfilled. These include: common agreement on general goals; engagement of all stakeholders in shaping and executing these goals; adoption of various policies to achieve these goals; establishing a clear and correct allocation of authorities and responsibilities; agreeing on common rules, institutions, customs and values; and resorting to negotiation in case of disagreement between stakeholders.

Why the transformation towards a green economy is important for GCC states?

  1. Like other countries worldwide, there is a concern for the environment degradation and the path towards a sustainable development path. GCC economy especially is highly vulnerable to climate change, degraded natural capital and resource constraints such as water and arable land, the wellbeing depends on the quality of the environment and on natural resources.
  2. From scientific, logical and practical points of views, many of the transformations required by green economy are going to happen anyway. So, it is logical to make structural reforms in a way that drives and harmonize the transition towards a low-carbon, resource-efficient green economy within the economy and between various sectors.
  3. There are short-term costs, but these are lower than the business as usual scenario and delay in the transition towards a green economy is definitely will be even more costly.
  4. The rest of the world is moving in this direction. This is clear from many innovations in various fields related to clean, green, low carbon emission industries, energy and policies. The GCC states risk losing or falling behind more and more if not presuming the path towards green innovations. Not only that but GCC have the chance to grip the benefits of acting early enough and thus having a competitive advantage in key areas of green innovation and technology.
  5. Perhaps more than in any other region, energy has a pivotal role in any kind of green transition in the GCC. Beyond its unsustainable dependence on fossil fuels, the states of the Arabian Gulf region are currently facing a number of sustainable development challenges, some of which are traditional and others new or emerging. Traditional challenges, which have persisted already for decades or more like oil pollution, water scarcity, food sovereignty,  desertification, high levels of migration and dependence on foreign labour, unemployment (among GCC nationals), regional instability, and challenges in the provision of health and education services. Among more recent, emerging challenges are the ongoing Arab Spring, the global financial crisis, climate change, waste (construction, household and hazardous) and, perhaps most surprisingly, domestic energy security.
  6. Most importantly, given the vast potential for solar energy, renewable energy can play a key role in the shift towards a greener economy in the GCC. Indeed, given the key role of energy in socioeconomic development, especially in the Gulf, it can be argued that a simultaneous shift in the energy sector is a precondition for any green transition. Since the energy sector affects all other sectors, a green energy sector is very likely to have positive ‘spill-over effect’ on the other sectors too.

UAE Leads the way towards green economy

The UAE Government wants to ensure sustainable development through the balancing between environmental caring, economic and social development. Since 2006, UAE has taken a pioneer steps in the field of sustainable development. This is very clear from the various projects and policies that the UAE leadership has adopted such as solar energy plants, an eco-friendly metro, a zero carbon Masdar City, green building codes, the Emirates network to monitor air quality and the like.

It is worth mentioning that, on January 2015, The UAE’s Cabinet approved a decision to implement the Green Growth Strategy, which aims to ensure the UAE’s status as a global hub and successful model for the green economy and ensure a sustainable environment.

UAE vision 2021

The UAE Vision 2021 demonstrates clearly that the Green Economy is a key component of the State’s strategic thinking as UAE aspires to be among the best countries in the world by 2021. The UAE Vision 2021 National Agenda focuses on improving the quality of air, preserving water resources, increasing the contribution of clean energy and implementing green growth plans. Also, UAE aims for becoming among the best in the world in the quality of airports, ports, road infrastructure, and electricity, telecommunications and social equity.

The vision 2021 states: In a strong and safe union, knowledgeable and innovative Emiratis will confidently build a competitive and resilient economy. They will thrive as a cohesive society bonded to its identity and enjoy the highest standards of living with a nurturing and sustainable environment. Vision 2021 charts out responsibilities for the UAE Government, extracts of which are (in short):

  • The UAE will not slow the pace of its drive for improvement. In the economic and government sphere, the UAE will build on sectors of excellence to export its model abroad, while constantly evolving to create new competitive advantages.
  • Legal frameworks and government services will be designed to provide businesses with the efficient environment that they need in order to grow, thrive and commercialize innovative ideas. The UAE will become one of the best places in the world to do business.
  • The UAE will nurture high quality of life built on world-class public infrastructure, government services, and a rich recreational environment. The UAE government should provide citizens with world-class infrastructure, services, and leisure resources, creating a rich environment in which they can enjoy well-rounded and fulfilling lives.
  • Emiratis will benefit from customer-focused government services whose quality is rigorously monitored and constantly improved. Interactive eGovernment will provide citizens with an especially responsive and efficient channel of service from public authorities.
  • We want the UAE to transform its economy into a model where growth is driven by knowledge and innovation. Productivity and competitiveness will come to rival the best in the world, as a result of investment in science, technology, research and development throughout the fabric of the UAE economy.
  • Outstanding information and communication infrastructure will network our businesses together and give them a leading edge as they transact and interact with the world.

This vision for 2021 which coincides with the UAE’s golden jubilee celebrations in 2021 shows clearly the strong political will to transit towards a green, clean, future resilient economy. This is very clear from the targets and indicators of that vision such as the ambitious target of a 24 per cent share of clean energy contribution to the energy pie in UAE.

The vision 2021 aims to encourage green investment and finance as well as facilitating the production, import, export and re-export of green products and technologies.

Social aspect:

The social development is a fundamental part of UAE Vision 2021. This is very was made publicly clear by Sheikh Mohammed, the Vice President and ruler of Dubai who said “Achieving this requires work methodology that keeps pace with future requirements so as to enable all societal categories to become more effective.” The Vice President said also “Achieving this requires work methodology that keeps pace with future requirements so as to enable all societal categories to become more effective.” A top priority of the country’s national work strategy, he said, was to make sure human resources allowed people to achieve their aspirations, boost social services and having decent living conditions.

The UAE became the only Arab country to be included in the Global Economics driven by Innovation. Classified as an innovation-driven economy the UAE placed alongside countries such as the United States, Japan, Germany, Singapore, and has held been classified as innovation-driven for seven consecutive years—the only Arab country with this distinction.

In other respected competitiveness reports the UAE topped the list of Arab countries and ranked 5th globally in the World Bank’s Doing Business Report for ease of trading across borders. Similarly it ranked 1st among Arab countries and 17th worldwide on the UN’s recent World Happiness Report and 16th internationally in the IMD’s World Competitiveness Yearbook.

The practical steps for social aspect already approved by the UAE Cabinet on January 2015,   The Cabinet initiated a seven-year, seven-point scheme to communicate the Government’s plans to address the social priorities of UAE nationals. The program will consist of communication campaigns with seven themes: healthy children, cohesive family, quality education, green ideas, sustainable food, prosperous future, and diabetes-free UAE.

  1. Conclusion

The recent financial crisis has highlighted the negative impacts on living standards that can result from macroeconomic instability. In today’s world, our economies need to get greener to handle large-scale urbanization and information era and meet citizens’ needs and aspirations for an improved quality of life, reduced pollutants, increased efficiency, better services and decreased costs of living.

Socio-political stability ensures macro-economic stability to firmly maintain food security, energy security and financial security. In fact, the transitions towards a green economy, if well managed, will attract citizens, visitors, tourists, investors to the region. Otherwise, brown economy causes chorionic problems for municipalities and authorities and can affect national security by causing unrest and demonstrations by residents demanding better services, infrastructure and quality of life.

It is worth mentioning here that green economy does not necessarily mean depending on modern technology only. In many cases, such as GCC states, the use of cheap, sustainable, traditional local knowledge can be smarter and greener. For instance, traditional techniques of shading, lighting and building designs can be more effective, cheap and greener.

However, I believe that in modern societies, like the Arabian Gulf countries, authorities have to adopt a mix between both traditional and modern technological innovations. For instance, in some areas of the city, especially old ones, traditional smart mobility ways can be more favorable, cheap, sustainable, and consumer-friendly in addition, it acts as a tourist attraction. In new quarters of the cities, authorities can depend upon new, smart and clean means of transportation.

All GCC countries have tremendous potential to be role models when it comes to green economy. They have relatively young populations, with governments that are interested in leaving a mark and becoming role models to the world.

If the current trends persevere, GCC can face much turbulence and if well planned, green economy can ensure that their development is maintained well past the age of oil and natural gas.

In fact, GCC states have all the elements of success to transit to green economy. Renewable energy have great potential as they enjoy sunny weather almost all year round, labor is cheap, funds can be secured through leveraging domestic funding, as well as engaging in partnerships with the private sector – both domestic and foreign. In addition, clean and green technology is being developed through companies like Masdar.

UAE especially realized early the benefits of transition towards a green economy especially on soft security issues like food, energy…etc. and taken a pioneer strategic steps such as “green growth strategy” and “the UAE vision 2021”. These steps will guarantee that UAE will be one of the world’s leaders of future stable and green economy and as a result assurance of citizens and residents’ content and satisfaction.

Bibliography

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  • Abdel Raouf, Mohamed. 2013. Green Policy to Balance Energy and Environment Needs: The Case of the United Arab Emirates. Abu Dhabi: The Emirates Center for Strategic Studies and Research (ECSSR), June. In Arabic.
  • Abdel Raouf, Mohamed. 2014. ‘UAE Takes the Lead in Going Green.’ Gulf News, 26 February. http://gulfnews.com/
  • Abaza, Hussein, Najib Saab, and Bashar Zeitoon, ed. 2012. Green Economy: Sustainable Transition in a Changing Arab World. Beirut: AFED.
  • CSD. Commission for Sustainable Development. 2013. Arab Regional Implementation Meeting for the Twentieth Session of the Commission for Sustainable Development (CSD-20), (Rio +20) follow-up meeting, 29–30 May, Dubai, United Arab Emirates.
  • Daly, Herman A. 2005. ‘Economics in a Full World.’ Scientific American 293 (September): 100–107.
  • The GEF. 2014. ’What is the GEF.’ Accessed 13 October. http://www.thegef.org/gef/whatisgef
  • GCCSI. Global CCS Institute. 2014 ‘Large Scale CCS Projects.’ Accessed 7 December. http://www.globalccsinstitute.com/
  • Global Footprint Network. 2012. ‘Footprint Basics – Overview.’ 18 July. http://www.footprintnetwork.org/
  • Luomi, Mari. 2012a. The Gulf Monarchies and Climate Change: Abu Dhabi and Qatar in an Era of Natural Unsustainability. London: Hurst.
  • Rio+20. United Nations Conference on Sustainable Development. 2012. ‘Objective & Themes.’ June. http://www.uncsd2012.org/
  • The National, “UAE Cabinet sets out its 2021 vision”, http://www.thenational.ae/uae/government/uae-cabinet-sets-out-its-2021-vision.
  • UAE MOE. Ministry of Energy of the United Arab Emirates. 2014. ‘UAE Sets Target of Producing 24% of its Electricity Needs from Clean Sources.’ Press release, 27 July.
  • UAE government, “UAE vision 2021”, http://www.vision2021.ae/en
  • UN SD Knowledge Platform. United Nations Sustainable Development Knowledge Platform. 2014. ‘Green Economy.’ Accessed 18 August. http://sustainabledevelopment.un.org/
  • UNDESA. United Nations Department of Economic and Social Affairs. 2014. World Urbanization Prospects: The 2014 Revision, Highlights. (ST/ESA/SER.A/352) UN.
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  • UNESCWA. 2012. ‘Green Economy for the Arab Region.’ Presentation by Riccardo Mesiano at a meeting on Rio+20, National Policy Making and Sustainable Development Policies in Conflict-Afflicted Courtiers: The case of Lebanon. 2 May.
  • WAM. Emirates News Agency. 2012. ‘Mohamed Unveils UAE’s Green Economy.’ 15 January. http://www.wam.ae/en/

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