The virtue of green choice for Qatar could well be served by only reducing all greenhouse gas emissions across all sectors by 25% by 2030 . . .
The above-featured image is for illustration and is credit to Middle-East campaign.
The virtue of green choice for Qatar
Dr. Yassine Talaoui in The Peninsula of 20 Sep 2023
Qatar seeks to increase LNG production by 63% by 2027 and commits to reducing greenhouse gas emissions across all sectors by 25 percent by 2030. Though the two goals may sound contradictory, the curious mind muses on how this could lead Qatar to fashion a dual role as both gas exporter and green-energy powerhouse. Further, the challenge in setting up Qatar’s dual energy role isn’t in the potential or commitment. After all, the region has witnessed multiple attempts of diversifying commodity-based economies to no avail.
How can Qatar square the circle, then? Put simply, by coming through with the finance and the mechanics of spending it.
Allow me to explain.
Since its discovery in 1972, Gas has propelled Qatar development into a wealthy and ambitious state. The kind of ambition that landed Qatar the FIFA World Cup and carved it a role as a regional problem solver. The time now has come to use that very same commodity to build a different economic future for generations to come.
Last year, Qatar has reported a budget surplus of $24billion. This cash excess is likely to swell further due to the increasing gas demand caused by the Ukraine-Russia Crisis, which has turned gas into the new oil. Qatar’s ministry of finance could use this surplus to beef up the Qatar Investment Authority to snap up some trophy assets. But it could also divert these proceeds toward building electric grids capable of handling the transition to clean energy. In the long run, the latter option translates to choosing action today and fewer tradeoffs ahead. It would mean spreading the cost of climate change by securing a more productive hydrocarbon-free economy for Qatar, fewer emissions, and lowering the risk of flooding and extreme heat. As such, Qatar could power its growth using renewable grids, which would replace the ones running on hydrocarbons. In this vein, Qatar’s high solar potential could be used to develop solar energy projects to create thousand megawatts of solar generation capacity.
As the country expands its domestic production capacity by $30billion to swell further gas revenues, pumping these surpluses into renewable grids would elevate Qatar to a much higher level of success toward reaching NetZero emissions. This necessitates a pledge to invest continuously in green development projects that can reduce emissions and spur carbon-free economic growth. Such an aim can be achieved via proper carbon pricing and international emissions trading to persuade the private sector to join forces for Qatar’s decarbonizing efforts. Government aids and loans can follow with green strings to incentivize the private sector to contribute to cutting emissions and converting hydrocarbon-powered consumption to a green one.
Becoming an even bigger player in gas production would mean Qatar can pour gas proceeds into clean manufacturing and diversifying local economies. As cash flows in, Qatar’s transition away from hydrocarbons speeds up and its competitiveness in the non-hydrocarbon economy rises. It is possible to imagine how such a virtuous cycle of hydrocarbon proceeds and clean-economy growth might lead to more investment and trade that lifts Qatar’s living standards and broadens prosperity for its population. The gas bonanza can be used to finance essential infrastructure and desalination projects that can help Qatar’s cities stay habitable amid rising temperatures. Environmental journalist Gaia Vince argues, in her book “Nomad Century, that regions populated by close to 3.5 billion people would become unsuitable for living if the world temperature grew by a mere 4 degrees.
Gas has been and continues to be a valuable source of foreign exchange for Qatar. With its revenues, the government can continue its social spending, school, healthcare, and public services funding, and direct what is left of its budget toward green economy maneuvers. These entail a series of projects such as waste-processing plants, a big sea wall, or even swapping to electric buses. At the global level, these moves will bring Qatar closer to the COP national climate targets. At the national level, they will shield Qatar from regional and global crises 10 to 20 years from now. And most importantly, on Qatar’s balance sheet, their cost can be afforded today.
By acting now, Qatar can avoid the tradeoff, lying ahead, between climate and development. As temperatures rise and world poverty presses, the tradeoff is imminent. Weird as it may sound, Qatar’s gas production expansion is its exit plan from a hydrocarbon-based economy toward a diversified economy aimed at lowering environmental risks and ecological scarcities and building infrastructure that promotes social and environmental sustainability.
Dr. Yassine Talaoui is Assistant Professor of Strategic Management at the Center for Entrepreneurship and Organizational Excellence, College of Business and Economics, Qatar University.