Adapting to Climate Impacts in the MENA Region

Adapting to Climate Impacts in the MENA Region

The UNFCC, in this article, comes after an IEA report in which a change of goals of the world’s leading energy advisor from that of the oil supplies protector to that of fossil fuels banning partisan is noticeable. Transitioning to a net-zero will mean breaking bad habits, but can we get there in time? This question is mainly addressed to those oil-exporting as well as would-be exporters countries of the MENA region.

It seems it is either adapting to Climate Impacts in the MENA Region and survive the potential effects of lack of exceptional revenues through quasi-vital know-how or going to COP26 and be pointed at as the source of all evils.

So without further ado, let us learn what is proposed.

The picture above is of The Conversation.

Adapting to Climate Impacts in the MENA Region

Adapting to Climate Impacts in the MENA Region

UN Climate Change News, 21 May 2021 – Closing knowledge gaps on the effects of climate change across the North African and West Asia/Gulf Cooperation Council (GCC) subregions was the focus of a recent meeting which showcased initiatives that will form part of an action plan for closing such knowledge gaps in the region.

Understanding the effects of climate change in the local and regional context and identifying specific regional knowledge gaps are important first steps in scaling up adaptation actions – a key pillar of the Paris Agreement. The meeting held on 5 May was the third of its kind involving partners of the Lima Adaptation Knowledge Initiative (LAKI).

 ‘Adaptation as we know is a journey, building on knowledge and cultivating synergy with the Sustainable Development Goals (SDGs) and other global frameworks. The initiatives outlined in the action plan will go a long way towards providing concrete anchors for advancing adaptation efforts in countries in this region,’ said Paul Desanker, Manager, Adaptation Division, UNFCCC.

Defining joint adaptation actions

A collection of projects led by organizations partnering with the UNFCCC were presented at the meeting, including: Scaling up mangrove carbon sequestration studies from the United Arab Emirates to Oman to support adaptation; development of a digital system accessible through mobile phones to transfer key knowledge to farmers to shield them from climate shocks in Jordan; frameworks and systems for data collection and monitoring of climate impacts; and technological advances in drought management and smart agriculture.

Funding opportunities to support the implementation of actions

Participants at the meeting shared their views on opportunities and challenges for cross-collaboration and received guidance from climate finance experts on funding schemes to support the action plan. The coordinator for the Global Adaptation Network at the United Nations Environment Programme (UNEP) Elizabeth Bernhardt, explained that innovation is a key priority for securing funding opportunities such as the Global Ecosystem-based Adaptation Fund and the Adaptation Fund Climate Innovation Accelerator (AFCIA).

‘If there’s something that has proven benefits for communities and proven ability to be scaled up and scaled out to other locations, it would be a top priority. Is it truly innovative? Does it demonstrate how a barrier could be overcome in a way that other countries can emulate?’ she said.

MENA adaption knowledge gaps tweet

Next steps

This was the last of a series of three virtual meetings, as a part of the second phase of the LAKI for North Africa and GCC subregions. In the previous phase, a total of 28 priority adaptation knowledge gaps were identified across the two subregions, which included lack of data, lack of access to data, lack of actionable knowledge, and lack of methods to process knowledge into an actionable form.

Adapting to Climate Impacts in the MENA Region
LAKI group image

Activities in the plan will now be implemented, and progress for each action will be showcased at events throughout the year, including the UN Climate Change Conference COP26 in Glasgow in November and the MENA Regional Climate Week in March 2022.

Adapting to Climate Impacts in the MENA Region
Tweet Dr. Khalil Ahmed

More information

The LAKI is a joint action pledge made by the UNFCCC secretariat and UNEP through the Global Adaptation Network (GAN) under the Nairobi work programme (NWP). For the West Asia-GCC and North Africa subregions, the secretariat collaborates with the UNFCCC-WGEO Regional Collaboration Center for the Middle East, North Africa and South Asia based in Dubai (RCC Dubai), the UNEP Regional Office for West Asia, and the UN Economic and Social Commission for Western Asia (UNESCWA).

To learn more about the LAKI, click here.

To get involved, please contact: nwp@unfccc.int


Corporate net zero: we need a more sophisticated approach

Corporate net zero: we need a more sophisticated approach

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

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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.

Ian Simm

Read more in Ian Simm‘s 8 articles

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