The burning of organic materials (such as fossil fuels, wood, and waste) for heating/cooling, electricity, mobility, cooking, disposal, and the production of materials and goods (such as cement, metals, plastics, and food) leads to emissions. This affects local air quality and the climate. In a recent blog, we showed that the Middle East and North Africa region (MENA) lags behind all other regions in decoupling air pollutant emissions from economic growth.
Particulate matter with a diameter of less than 2.5 micrometers (PM2.5) is the air pollutant associated with the largest health effects. MENA’s cities are the second-most air-polluted following South Asia; virtually all of its population is exposed to levels deemed unsafe. In 2019, exposure to excessive PM2.5 levels was associated with almost 300,000 deaths in MENA and it caused the average resident to be sick for more than 70 days in his or her lifetime. It also carries large economic costs for the region, totaling more than $140 billion in 2013, around 2 percent of the region’s GDP.
A good understanding of the emission sources leading to air pollution is necessary to planning for how to best reduce them. Figure 1 shows that waste burning, road vehicles, and industrial processes accounted for around two-thirds of PM2.5 concentrations. Electricity production is also a significant contributor, most of which is used by manufacturing and households.
5 PRIORITY BARRIERS AND OPPORTUNITIES FOR POLICY REFORMS TO KICK-START DECOUPLING
A forthcoming report titled “Blue Skies, Blue Seas” discusses these measures, alongside many others, in more detail.
1. Knowledge about air pollution and its sources is limited, with sparse ground monitoring stations. Detailed source apportionment studies have only been carried out for a few cities within the region, with results often not easily accessible for the public.
Extensive monitoring networks and regular studies on local sources of air and climate pollutants are foundational, as is making results easily accessible to the public (e.g., in form of a traffic light system as is done in Abu Dhabi). This will empower sensitive groups to take avoidance decisions, but also nurture the demand for abatement policies.
MENA’s heavy subsidization of fossil fuels, whether that is at the point of consumption or at the point of intermediary inputs in power generation and manufacturing, makes price reforms essential. Aside from incorporating negative externalities better, lifting subsidies also reduces pressure on fiscal budgets, with freed-up fiscal space being available to cushion the impact for low-income households. There have been encouraging steps by some countries such as Egypt, which reduced the fossil fuel subsidies gradually over the last couple of years, leading to significant increases in fuel prices, which in turn had positive effects on air quality.
To support a shift in the modal share toward cleaner mobility, it is imperative to invest in public transport systems, while making them cleaner and supporting nonmotorized options such as walking and biking. Cairo’s continued expansion of its metro system has been effective in reducing PM pollution and other MENA cities have also invested heavily in their public transport infrastructure, moving the needle on improving air quality. Furthermore, it is also important to raise environmental standards, both for fuel quality and car technology, together with regular mandatory inspections.
4. Lenient industrial emissions rules and their weak enforcement. The industrial sector is characterized by low energy efficiency standards, also due to the low, subsidized prices for energy mentioned above. MENA is currently the only region, where not a single country has introduced or is actively planning to introduce either a carbon tax or an emission trading scheme.
Mandating stricter emissions caps, or technology requirements, together with proper enforcement and monitoring is crucial. Incentivizing firms to adopt more resource-efficient, end-of-pipe cleaning, and fuel-switching technologies are additional crucial means to reduce air pollution stemming from the industrial sector. A trading system for emissions could either target CO2 emissions, or air pollutants, such as the PM cap-and-trade system recently introduced in Gujarat, India. Such a system should target both the manufacturing industry as well as the power sector.
5. Weak solid waste management (SWM) is a major issue in MENA. Although the collection of municipal waste has room for improvement in many countries, it is mainly the disposal stage of SWM where the leakage occurs. Too often waste ends up in open dumps or informal landfills, where it ignites. Furthermore, processing capabilities are often limited, and equipment outdated, at least for the lower- and middle-income countries of the region.
Hence, enhancing the efficiency of disposal sites is critical to reducing leakage and the risk of self-ignition. To start, replacing or upgrading open dumps and uncontrolled landfills with engineered or sanitary landfills is a viable option. Going forward, recycling capabilities should be improved and the circularity of resources enhanced. For agricultural waste, the establishment of markets for crop residues and comprehensive information campaigns in Egypt showed that such measures can supplement the introduction of stricter waste-burning bans.
Kick-starting decoupling and banking on green investments hold the promise for MENA not only to improve environmental quality and health locally, and to mitigate climate change globally, but also to reap higher economic returns (including jobs). Moreover, decoupling now will prepare MENA economies better for a future in which much of the world will have decarbonized its economies, including its trade networks.
Abu Dhabi Media to air EAD’s new documentary: ‘Our Sea… Our Future’ now that all fossil fuels divestment appears to generalise for reasons known to everyone overwhelmingly. Rediscovering the sea and historical pearl-diving could well be a segment of diversification of the economy. It must be noted that Abu Dhabi-based Future Rehabilitation Centre is not also that far from the sea shore. Anybody sees anything wrong ?
Abu Dhabi Media to air EAD’s new documentary: ‘Our Sea… Our Future’
ABU DHABI, (WAM) — The Environment Agency – Abu Dhabi (EAD) has unveiled its new documentary: “Our Sea .. Our Future,” as a part of its ongoing cooperation with Abu Dhabi Media.
The 35-minute documentary highlights the fisheries sector, which is an integral part of Abu Dhabi’s heritage. The film illuminates the pressure that Abu Dhabi’s fisheries face, and the actions were taken by EAD to contain the impacts of overfishing on the marine environment, to ensure the recovery and renewal of the Emirate’s fish stocks.
The documentary was produced by EAD to highlight the roles of some of its employees and the challenges they face while conducting their various tasks and responsibilities. It also features interviews with EAD experts and specialists who emphasise the importance of fishing, the work undertaken by many Emiratis as a main source of income in the pre-oil era. Despite the ubiquitous development in all aspects of life in the UAE and the wide diversity of income sources, fishing remains one of the main sources of income and a valued traditional craft.
The documentary also showcases the perspectives of various fishermen, who are key partners of the agency.
Mohamed Ahmed Al Bowardi, Vice Chairman of EAD, commented, “Abu Dhabi is one of the key stakeholders in fisheries in the UAE, and the improvement of the fish stock and the abundance of demersal species represent very good indicators of the general condition of the country’s territorial waters in the Arabian Gulf.”
He pointed out that natural fisheries in the UAE, like others around the world, are subject to depletion due to several natural and human factors. Studies conducted by the agency show that the fishing sector in Abu Dhabi faced significant pressures, as the overutilisation of fisheries and the sharp depletion of the fish stock led to a more than 80% decline in the fish stock levels in the country. Moreover, several key commercial species declined to unsustainable levels.
He added, “As part of our efforts to protect the fish stocks and encourage sustainable use of fisheries and marine resources, the agency set several controls to manage fisheries in the emirate in a manner that would increase feasibility to utilise and preserve natural resources.”
Razan Khalifa Al Mubarak, Managing Director of EAD, said, “Fisheries are not only a source of revenues or income, as they also have a significant cultural and historical importance. Therefore, Abu Dhabi’s government considers their protection a key priority.”
She added, “We cannot underestimate the importance of early response to protect the marine resources for the current and next generations. After fish caught in the UAE were sufficient to meet the population’s needs, we are now depending heavily on importing to bridge the widening gap between supply and demand. Therefore, we took strict actions and controls that would ease the pressure off fisheries in the commercial and recreational sectors.”
Dr. Shaikha Salem Al Dhaheri, Secretary-General of EAD, said, “This documentary enabled us to highlight some of the main threats facing fisheries in Abu Dhabi, and the internationally-recognised efforts taken by the agency, in cooperation with its partners to manage the fish stocks. Those efforts resulted in creating multiple marine reserves, in addition to deploying a system for licencing commercial and recreational fisheries, and regulating the use of fishing equipment, in addition to imposing a seasonal ban to protect fish during the breeding season. The agency also set a minimum size for fish to be caught for some of the key types and prohibited unsustainable fishing methods.”
According to her, policies, procedures, and administrative controls were taken by the agency led to significant improvement in the fish stocks of some of the main commercial species that were depleted. EAD hopes for further improvement as the compliance with current policies and measures continue in a manner that helps achieve the desired outcomes of environmentally sustained fisheries.
Acting General Manager of Abu Dhabi Media Abdul Raheem Al Bateeh Alnuaimi, said, “With its contribution to the community, Abu Dhabi Media is keen to consolidate its leading position through raising the community’s awareness of various topics and initiatives, as well as reaching its target audience through its various media channels.
“Through airing this documentary, we aim to support environmental and cultural initiatives, highlighting the efforts made by the government to preserve Abu Dhabi’s environment and biodiversity. ‘Our Sea…Our Future’ documentary highlights the efforts of the Environment Agency and the concerned authorities in addressing the environmental challenges resulting from overfishing.”
This is the second documentary produced by EAD about marine resources in the UAE. The first one was “Our Sea .. Our Heritage” produced in 2019 which highlighted the condition of fisheries in the UAE and the long-term protection and recovery plan for fisheries.
The MENA region, like much of the undeveloped world, is characterised by an omnipresent Informal Economy with however differing specifics. This label dates back to most countries Planned Economy. So why is now the Fintech industry poised for significant growth in the MENA region? And how? All world economies have an informal economy, and the duties of all business and governments alike leaders are to sustain, help and assist in its good maintenance and eventual development. Informal Economy is not Black Market and can easily be formalised to become the locomotive of any nation’s economic life. Could Fintech be of serious help here?
Any way, the reasons are tied to those specifics at this conjecture as well summarised by Ayad Nahas below.
The Financial Technology (Fintech) industry in the Middle East and North Africa (MENA) looks well placed to enjoy a period of substantial growth.
As many as 69% of adults remain totally unbanked in the region
Internet penetration in Saudi Arabia stood at 95.7% in January 2021
Fintech is going to be the “game-changer”
Fintech industry poised for significant growth in the MENA region
By Ayad Nahas, Communication Strategist
The Financial Technology (fintech) industry in the Middle East and North Africa (MENA) looks well placed to enjoy a period of substantial growth.
Part of this growth could come from a large unbanked population.
GCC expatriates with low and middle-income salaries constitute a large proportion of the unbanked such as in the UAE, where around 80% of the population is outside the current financial system.
Yet, regional smartphone and internet penetration is very high, reaching 2 mobile-cellular subscriptions per UAE inhabitant in 2019, while Internet penetration in Saudi Arabia stood at 95.7% in January 2021.
Regional governments spotted this opportunity and introduced regulation to substantially attract investments into the sector.
Fintech is a term that describes new technology which seeks to improve and automate the delivery and usage of financial services. At its core, fintech helps companies, business owners, and consumers better manage their financial operations, processes, and lives by applying specialized software and algorithms on computers and, increasingly, smartphones.
Fintech’s adaptability across a slew of consumer sectors is propelling its widespread acceptability. Managing finances, trading shares, furnishing payments, and shopping online (often on your smartphone) has never been more convenient.
At the forefront of the fintech disruption are agile innovations such as peer-to-peer (P2P) lending and crowdfunding, providing alternative lending platforms, and widening access to fundraising.
While they may currently still need some centralized form of finance, at the minimum, P2P lending and crowdfunding can use fintech and blockchain to quicken the process, avoid paying high banking fees, and garner the interest of digitally-minded Millennials and future Z-generations.
A recent report by consultancy firm Deloitte also states that the UAE houses over 50% of the region’s fintech companies, with nearly 39% of the population using fintech for P2P money transfer.
According to a report by Crowd Funder, a leading online source for the fintech industry, the number of financial technology companies in the Middle East increased from around 105 companies in 2015 to 250 firms in the year 2021.
Hanna Sarraf, a senior banking executive from the MENA region, said fintech is going to be the “game-changer” that will decide the winners and losers within the financial services industry, globally and in the Middle East, in the short and long terms.
He points out that new technologies and advanced data analytics are transforming the traditional banking business models from the way banks interact with customers to the way banks manage their middle and back-office operations.
The global fintech market is expected to reach $309.98 billion at a CAGR of 24.8% by the year 2022 according to many key sources from the banking industry. In the MENA, the fintech industry is expected to hit a record valuation of $3.45 bn by 2026.
The growth of this sector is currently being propelled by the rapid rise in fintech startups as a result of the very high internet penetration in the region. Another major factor is that several traditional banks are undergoing digital transformations or even becoming neo-banks, a trend especially evident in the UAE.
In a survey by the Boston Consulting Group (BCG) last October, 70% of respondents said they are actively searching for a new bank, and 87% said they would be willing to open an account with a branchless digital-only lender.
Today, the UAE is leading the pack in financial technology and developing itself as a digital-first nation when it comes to banking, payments, and fintech, as evidenced by the UAE’s first digital bank to provide both retail and corporate banking services and which will soon be launched and led by Former Emaar Chairman, Mohamed Alabbar.
According to many experts, the fintech market in the MENA region is set to account for 8% of the Middle East financial services revenue by 2022. COVID-19 turned out to be a wakeup call to switch from traditionally deployed financial services to more sustainable finance and technology platforms
The fintech revolution is set to continue to disrupt, and traditional banks must keep up with the pace of technology in order to stay relevant and competitive. In this rapidly evolving, ever-changing market, it’s time to innovate, integrate and accelerate into the future.
Industry Leaders published a point of view narrated by Anna Domanska that Saudi Arabia says focus on renewable energy will save them $200 billion. Do you believe it?
Saudi Arabia says focus on renewable energy will save them $200 billion
Saudi Arabia, which is actively looking to expand its economy beyond its dependence on fossil fuels, believes it can save over $200 billion over the next decade by replacing liquid fuel used for domestic consumption with gas and renewable energy sources, according to its finance minister.
The top oil exporter is modernizing its economy and create new jobs for its citizenry by venturing into new modern industries beyond oil. Hit by the volatile oil prices and the economic downturn due to the pandemic, the desert kingdom has ventured into a multi-trillion-dollar spending push led by state oil company Aramco and the powerful $400 billion sovereign fund, Public Investment Fund.
“One initiative we’re about to finalize is the displacement of liquids,” said Finance Minister Mohammed al-Jadaan. “This program would represent savings for the government of about 800 billion riyals ($213.34 billion) over the next 10 years which can be utilized for investment.”
Earlier this month, the government signed seven new solar power purchase agreements to optimize the energy mix used for electricity production. “Instead of buying fuel from the international markets at $60 and then selling it at $6 for Saudi utilities, or using some of our quota in OPEC to sell at $6, we’re going to actually displace at least 1 million barrels a day of oil equivalent in the next 10 years and replace it with gas and renewables,” said Jadaan.
“Between now and 2025, and possibly until 2030, fiscal sustainability is a priority for us. We believe that until we achieve all the targets that Vision 2030 has set, we need to maintain fiscal sustainability and control government expenditure,” said Jadaan.
The whole shift in outlook in Saudi Arabia is led by Crown Prince Mohammed bin Salman’s Vision 2030, envisaged as a mega plan to wean the economy off oil and invest in other industries such as infrastructure and technology, all with private participation and create jobs for the people.
The Kingdom is facing unprecedented unemployment, with figures running up to 15 percent last year. It has been pushed down to 12.3 percent this year. The aim is to bring it down to 7 percent by 2030. ”We are maintaining our unemployment target for 2030 but because we are not out of the woods yet it is very difficult to say what the unemployment rate is going to be for 2021,” said Jadaan.
“Our aim is to reduce the number so we will end up the year below where we ended up in 2019, pre-COVID, but I can’t tell you this is going to happen for certain.”
The Vision 2030 launch has seen renewed interest in the country from foreign investors. Foreign investment in Saudi Arabia passed the SR2 trillion ($0.53 trillion) mark for the first time at the end of 2020, despite the financial impact of the COVID-19 pandemic.
The total value of investments from overseas rose 9 percent year-on-year, or SR173.3 billion, in 2020, from SR1.833 trillion at the end of 2019, according to the Saudi Central Bank (SAMA).
According to an analyst, the increase in capital flowing into the country was due to an improvement in the investment environment and some relaxation in investment laws in the Kingdom.
Anna Domanska is an Industry Leaders Magazine author possessing a wide range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.
Ian Simm, Founder & Chief Executive at Impax Asset Management, writes about achieving a Corporate net-zero possibly through a more sophisticated approach required of all, big or small corporations of all countries. So here it is.
Corporate net zero: we need a more sophisticated approach
The private sector holds the key to decarbonising the economy over the next quarter century. As countries set “net zero” or equivalent targets backed by carefully designed roadmaps for sectors such as energy, transportation and food, there’s a widespread assumption that “national net zero” should mean “net zero for all”, including “corporate net zero” (CNZ) for today’s businesses. Although there are some benefits to unpacking national net-zero targets in this way, there are also several important drawbacks. A more sophisticated approach is urgently required.
Ahead of the COP26 conference in Glasgow later this year, governments are likely to set or raise national targets for decarbonising their economies. In much of the world, the private sector will mobilise to serve rapidly expanding markets, for example for electric vehicles or plant-based food. Experience suggests that we’re about to witness a huge amount of creative destruction as entirely new industries are born, nascent sectors flourish and demand for products and services we once considered permanent fades, threatening or even destroying what have been large companies – a fate similar to landline-based telephony or, potentially, to cash-based transactions.
As the opportunities and risks linked to climate change become mainstream for many companies and their stakeholders, corporate net-zero targets have several attractions. Faced with a simple message that they should develop, analyse and act on specific climate change opportunities and risks, management teams will not only identify ways to improve the company’s risk-adjusted returns but may also produce or facilitate breakthroughs for their customers or suppliers, for example by placing bulk orders for low-carbon products.
Similarly, multiple CNZ commitments across a sector may enable discussions around possible collective action, for example the establishment of clusters to generate and consume “green” hydrogen. Early action by companies can encourage governments to develop further their policies to mitigate climate change, while corporate pledges may unlock capital to catalyse new climate-friendly activities, for example in nature-based solutions.
The drawbacks of a blanket adoption of corporate net zero
And yet there are several crucial drawbacks to the blanket adoption of corporate net-zero targets.
First, and most obvious, is the definition and interpretation of net zero. Apart from the ambiguity around each entity’s pathway to net zero (i.e. “how much, by when?”), the role for offsets is contentious – for example, should a cement manufacturer be able to account for the carbon benefits of its investments in peatland restoration, or if we allow this, does that create a moral hazard (to pollute)? And how should low-carbon technologies be treated: for example, when a new wind farm is built, does it really make sense that the entity purchasing the electricity gets the carbon benefit while the investor (or wind farm owner) receives no such boost to their own carbon accounting?
Second is capital inefficiency. To ensure there’s sufficient “creative destruction” as we reset our economy, we need to avoid hampering the essential sunsetting of certain activities in favour of new ones. The law of diminishing returns predicts that, as companies implement efficiency measures and cost-competitive technologies to reduce their emissions, they will need to consume more and more capital to save the next tonne of carbon, for example, steel manufacturers seeking to switch to direct hydrogen reduction. At the same time, companies producing alternative products, for example construction materials based on wood, may offer much higher financial returns on an equivalent amount of capital with much lower risk. Faced with a choice, investors are likely to prefer the latter.
Third, skills. To pivot successfully to entirely new activities, today’s companies need to harness alternative expertise. For example, can today’s oil majors with their competence in seismology and the handling of liquids, realistically develop a competitive advantage in the development of power projects and in electricity trading to outcompete today’s power generators?
Fourth, value chain effects. Notwithstanding the challenges of measuring so-called “Scope 3” emissions, a company that pursues a net-zero position without concern for its customers or even its suppliers may unwittingly hold back climate change mitigation across the “system” (i.e., the wider economy). For example, if the renewable energy supply required to enable a manufacturer of insulation material to become net zero costs significantly more than the fossil fuel supply it used previously, the price of its product will rise, thereby reducing its potential to assist customers with their energy savings.
Fifth, the “someone else’s problem” effect. It’s too easy for today’s management team to commit a company to long-term targets that they personally won’t be around to deliver on.
And lastly, confusing signals. As decarbonisation progresses, management teams may be faced with a conflict between achieving financial objectives and delivering on the company’s net-zero pledge. This may not matter at the outset, but once the “early wins” in emissions reduction have been secured, difficult conversations about the trade-off between financial and environmental outcomes are, in my view, inevitable.
Climate change resilience first
So, what’s to be done? A sound starting point is to use “corporate net zero” as an agenda item for a deeper discussion on climate change between companies and their investors. But rather than starting that conversation by simply insisting on the adoption of net-zero targets, investors should seek to assess whether the company is already or aiming to become “climate change resilient” using the framework recommended by the Taskforce on Climate-Related Financial Disclosure (“TCFD”) which covers both emissions reductions and physical climate risks.
This should cover the four areas outlined by TCFD:
First, governance: what changes has the company considered and made to ensure that climate change issues are managed comprehensively over a long timeframe?
Second, strategy: how has the company’s business strategy evolved in response, what alternatives has management considered and what will be the impact on the company’s expected return on invested capital?
Third, risk and opportunity: has the company mapped out the key changes in these areas arising from climate change and implemented programmes to monitor them over a long timeframe?
And fourth, metrics, targets and reporting: is the company’s planned reporting in this area likely to provide decision-useful information to shareholders and other stakeholders?
These conversations should lead to a comprehensive, rational plan for each company to manage climate change issues over time, tailored to its individual circumstances. For some, the optimal result will be to adopt a (simple to communicate) corporate net-zero target described in a way that avoids the drawbacks discussed earlier. For others (and in particular, in hard-to-abate sectors), a more appropriate response would be (a) a business plan focused on the efficient use of capital in the context of a wider set of risks, (b) imaginative and proactive collaboration with peers and government to shape new markets, and (c) clear communication with all stakeholders.
We need to be careful that “corporate net zero” does not turn into “one-size-fits-all”. The failure to take a thoughtful and sophisticated approach to these issues is likely to result in management confusion, muddled or misleading external communication and perhaps most significantly, the misallocation of capital. Now is the time to get our proverbial ducks in a row!Report this
The current enthusiasm for “corporate net zero” is understandable, but there are significant drawbacks that are set to lead to confusion and unintended consequences. My take on why, in the face of climate change, companies should follow TCFD guidance and reporting, prioritising sound strategy and resilience.
Originally posted on Earth Report: Tropical Storms – Roundup of Tropical Storms: In the Northwest Pacific Ocean: Tropical Storm 25w (Malou), located approximately 349 nm south-southwest of Iwo To, is tracking northeastward at 06 knots. Tropical depression 26w (Twenty-six), located approximately 259 nm east-northeast of Ho Chi Minh City, Vietnam, has tracked west-northwestward at 08…
Originally posted on Neko Random: The clementine fruit is also known as the Algerian tangerine as that was where it was first cultivated.
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