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UAE Energy Diplomacy and Sustainable Global Development

UAE Energy Diplomacy and Sustainable Global Development

September 17, 2018
Emina Osmandzikovic
Emina Osmandzikovic Researcher at TRENDS Research & Advisory
Viktoria Akchurina
Viktoria Akchurina Researcher at TRENDS Research & Advisory

The Agenda for Humanity has aimed to overcome the humanitarian – development divide for the sake of more responsibility and sustainability. A range of international institutions, such as FAO, UNHCR, UNDP, UNFPA, UNICEF, to name a few, has been combining efforts to develop a common approach to achievement of the United Nations Sustainable Development Goals (SDGs) and to develop a shared understanding of sustainability, vulnerability, and resilience. The UAE is an active stakeholder in the Agenda committed to range of efforts for bringing about collective outcomes in ensuring humanitarian needs, broadly understood, are met.

Over the past decade, the UAE has also become a global leader in renewable energy innovation.  This is demonstrated by the country’s early support for the 2016 Paris Climate Change Agreement, the UN Sustainable Development Goals (SDGs), and the UN Environment Programme Finance Initiative (UNEPFI). With the above agreements serving as the main normative pillars of the UAE’s green energy strategy internationally, the country has maintained its domestic commitment to maintaining significant institutional capacity in renewable energy. The record-setting prices for utility scale solar energy (below $.03 per kilowatt-hour) have created a solid competition for the fossil fuels and made the UAE an ambassador for the renewable energy projects around the world.

A recently released report, UAE Energy Diplomacy, based on research conducted by TRENDS Research & Advisory and The Stimson Center (Washington D.C.), has demonstrated the UAE’s leading role in this field and the significant potential for improving global approaches to sustainable development in support of humanity through environmentally sound energy supplies. The report emphasizes the UAE’s capacity to enhance cooperation with the Global South, through the implementation of the UAE’s vision on renewable energy. Most developing countries still lack the financial, technical and human capacity to effectively expand their energy sectors in a sustainable way. Stemming from that, renewable energy has been identified as a key arena of international engagement where the UAE’s leadership and vision, underscored by a steady increase of its institutional capacity, can make a lasting impact on the way sustainable development is understood globally.

The findings of this research demonstrate that energy diplomacy can become a crucial pillar of the UAE’s global development and humanitarian agenda, as it provides innovative and reliable solutions for the South-South cooperation under the conditions of rapidly changing and volatile world. The outstanding feature of the UAE’s development agenda is that it provides a fresh vision of the global common good without undermining national interests of the developing countries at the same time, unlike previously known development and modernization approaches. Green (sustainable energy sources that are not environmentally damaging) energy diplomacy is the key element of this approach where the UAE has the capacity to be the game-changer towards a more sustainable future, given that the global energy demand is set to rise by 30 percent by 2030.

Global and local dimensions of the UAE’s energy diplomacy

The global dimensions of the UAE’s dedication to sustainable development can be seen in the country’s close cooperation with the International Renewable Energy Agency (IRENA), whose headquarters are in Abu Dhabi. The UAE’s dedication to connecting sustainable development with green energy diplomacy is also reflected in its 2017-2021 Foreign Aid Strategy. For instance, the 2017-2021 strategy underscores the promotion of economic growth in the developing world through the strengthening of the South-South cooperation. It also utilizes sustainable approaches to more effective foreign aid programs, focuses on building resilient infrastructure, and promotes sustainable industrialization of underdeveloped countries. Further, the strategy uses the United Nations Sustainable Development Goals as the basis of its national and international efforts in capacity-building, technology-sharing, and energy infrastructure.

The UAE’s long-term dedication to sustainable development and green energy diplomacy is underscored by a range of key global events in the framework of green energy diplomacy that have taken place in the UAE over the past few years. The most significant ones include the Abu Dhabi Sustainability Week 2018, hosted by Masdar, the annual World Future Energy Summit, and the Clean Energy Ministerial Global Forum (2011). On a larger scale, Masdar has been continuously working on implementing its projects in developing countries, such as Jordan, Afghanistan and Mauritania. The interconnectivity of the UAE’s global and local initiatives is reflected in the country’s hosting of international events and its role as a hub of regional initiatives, especially in collaboration with Masdar and IRENA.

Further, the Masdar Special Project: UAE-Pacific Partnership of 2013 is a bright example of the integration of the country’s green energy cause into its foreign policy. Within the project, the UAE committed to support eleven renewable energy projects in the Pacific islands. The core of the special project is a US$ 50 million initiative of delivering grant-funded renewable energy projects to Pacific Island nations. As a result, the fund’s 11 projects were deployed by Masdar’s Special Projects unit in cooperation with the UAE Ministry of Foreign Affairs and International Cooperation and each nation’s government. Moreover, the UAE’s investments into renewable energy projects in the Caribbean reached $50 million in 2017 after a steady increase in funding on a yearly basis.

Looking forward, the World Expo 2020 will be hosted in Dubai in partnership with the Dubai Electricity and Water Authority invested AED 4.56 billion ($ 1.16 billion) in sustainable infrastructure. As one of the themes of the Expo 2020, sustainability emphasizes the importance of green economies, sustainable cities and effective planning of environment-friendly development. Moreover, in 2019, the UAE will be hosting the 24th World Energy Congress, a triennial event, bringing together representatives of more than 150 countries to discuss the global strategy on collaborative, sustainable and innovative energy.

The institutional capacity of energy diplomacy

In regards to national institutions that underpin the country’s vision, four UAE Public Utilities play a key supporting role in sustainable development. These include the Abu Dhabi Water and Electricity Authority (ADWEA), the Dubai Electricity and Water Authority (DEWA), the Sharjah Electricity and Water Authority (SEWA), and the Federal Electricity and Water Authority (FEWA). All four provide significant benefits for investors, including access to low interest loan rates and balanced risk allocation, as both purchasers and co-owners.

Moreover, the UAE’s federal strategy for sustainable development rests on crowdsourcing feedback and expert-led exercises for innovation purposes. The diversification strategy, as based on the Abu Dhabi Economic Vision 2030, has resulted in the growth of the non-carbon sector to 69 percent as a percentage of Abu Dhabi’s GDP. Further, the UAE Green Agenda 2015-2030 underpins the country’s strategy of expanding its green energy diplomacy through economic diversification, information-sharing, capacity building and coordinated consultation with the private sector, reflected in the UAE Vision 2021. As the most prominent example of a successful combination of rapid urbanization and sustainable development, Masdar is the largest commercial provider of renewable energy technologies. Moreover, Masdar is the first future-looking technology center and sustainable eco-development zone, based in Abu Dhabi. It is home to one of the largest clusters of high-performance buildings in the region and, within the city, the buildings’ energy and water demands are 40 percent lower than average. In addition to zones of sustainability and green energy, the UAE has created an Estidama (pearl) Rating System in 2008. The system is a key part of the UAE Energy Strategy 2050 on the existing LEED standards in order to limit the amount of new capacity needed in the future energy mix.

Overall, the multifaceted approach of the UAE government to sustainability and green energy, both domestically and internationally, have galvanized inter-sectoral collaboration in research and policy formulation that provides a substantive precedent for needed changes in the global understanding of sustainable development and green energy solutions for a better future.

Moving Forward: Green Diplomacy, Global Governance and Changing Modes of Development

The research presented in the Report on the UAE Energy Diplomacy has demonstrated the growing demand for green energy and its incorporation into the international development agenda. The UAE has demonstrated an outstanding vision and practices regarding how to change the ways we think of- and act on development. Specifically, the research has shown that empowering the developing countries can be achieved through investment in green energy, as in the case of Southeast Asia.

In general, holistic and multi-dimensional, the UAE’s vision provides a platform to break cognitive stigmas that can hinder implementation of development in the global South. While being a breakthrough, the vision has still been grounded in the existing global ‘archive’ on development, including the United Nations Sustainable Development Goals. Hence, it has a potential to bridge the past with the future.

To realize the gains of innovation in global development, more interdisciplinary research is needed. This research needs to address the main assumptions which are embedded in the approaches to modernization and development today.  In particular more needs to be done to break away from the binary and linear approaches to governance as it pertains to development agendas.

Inspired by the outstanding research on green energy in humanitarian action, previously conducted by IRENA, United Nations Agenda for Humanity, UNHCR and their partner institutions, TRENDS and Stimpson suggest contributing to this research by filling in the following gaps:

  1. Placing the specific data from the existing research on green energy in displaced communities into a broader context of international development, by relying on our interdisciplinary skills and methodologies. It is important to understand whether and through which mechanisms exactly the green energy can be introduced to the humanitarian action and what socio-economic consequences it may have in each specific environment.
  2. Understanding how the green diplomacy can contribute to the global debate on the Climate Change; whether, why, and to what extent international actors would choose social engineering approach to climate change.
  3. As any innovation, turning to green energy may disrupt the existing routines in communities. Hence, before its full implementation can be undertaken, one needs to better understand those communities’ historical and political patterns. In other words, the correlation between green energy innovation and peace needs special attention and research.
  4. Comparative analysis of Foreign Aid approaches across times and nations in order to identify sustainable opportunities for investment and businesses in green economies, especially in the ‘global South’.

In sum, the UAE’s dedication to green energy diplomacy can change the way we think and act about development, social vulnerability and resilience, thereby securing a peaceful and prosperous future for all nations. We suggest that further research on the correlation between green energy and development can help identify mechanisms, which will break the divisions between the developed and the developing nations.

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