GCC’s place in climate negotiations

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Oryx Publishing, Qatar

The GCC pavilion at COP22 paled in comparison to the dedicated UAE pavilion next door; there were no glitzy scale models or plush couches. In fact, by GCC standards, it was quite sober. But it was always buzzing with energy, be it in the various delegation offices, the conference room or on the floor where various public talks were hosted throughout the day. As one GCC delegate put it, a COP in an Arab country brought with it a sense of pride and ownership, not unlike four years ago when the COP was hosted in Doha.

The Gulf States, particularly Saudi Arabia, tend to receive negative to no coverage at COPs, noticeably last year in Paris when they were accused of trying to scuttle the deal. In the eyes of the climate change community, these states are irrevocably tied to the root cause of our climate problems – fossil fuels. With these economies deeply linked to the export of hydrocarbons, their commitment to climate action is constantly called into question and their wealth makes it almost impossible for them to be cast in a sympathetic light. But the harsh truth is, as things stands today, the GCC is caught between a rock and a hard place, between economic catastrophe and climate catastrophe. Vulnerable to rising seas, desertification and “unlivable” temperatures, the stakes are high for the GCC if climate action doesn’t go on track. But as sustained low oil prices over the past couple of years have shown, the region is nowhere close to being diversified enough to weather the impending global decarbonisation agenda. So where does this place the GCC at the negotiating table?

 

Shifting dynamics

According to Dr Mohamed Abdel Raouf, Sustainability Research Program Manager at the Gulf Research Center, “GCC countries realized a few years back they will be isolated in the global climate change talks... this especially came home to KSA just before the Paris Agreement... and as a result they are now very actively involved with the global community in its fight against climate change.” As evidence of this, he points to Saudi Arabia’s arrival at COP22 as a nation in transformation, with the main message to diversify its economy away from a heavy over-reliance on hydrocarbons. “Besides, for the first time Saudi Arabia established its INDCs in a clear signal of its contributions and practical engagement with the issue of climate change,” he added.

Speaking to Qatar Today, a high-ranking member of the Saudi delegation expressed his satisfaction that the agenda for CMA had been established at Marrakech, calling it “an excellent way forward in implementing the Paris Agreement”, and reiterated Saudi Arabia’s commitment to climate goals. “Now we want to see a roadmap from here to 2018 to accomplish all the mandates of Paris. We are confident that by 2018 all aspects of the Paris Agreement will be finalised. We are looking forward to that and fully support working very hard to implement all 26 mandates.”

In the Arab region, seven countries have ratified the Paris Agreement, including Saudi Arabia and the UAE. Dr Kishan Khoday, Team Leader in the Arab Region for Climate Change, Disaster Risk Reduction and Resilience at the United Nations Development Programme (UNDP), says the GCC's INDCs are relatively ambitious in reducing carbon footprints by scaling up energy efficiency and rapidly expanding solar energy as part of the national energy mix. “This is a major shift and entails massive levels of investment; a totally new development trajectory that is being attempted at this scale for the first time in the Gulf,” he says.

The UAE government plans to reduce energy use across the country by 30% and generate 25% of its power from renewable resources and nuclear power by 2030. Saudi Arabia has committed to reducing emissions by 130 million tonnes per year by 2030, which amounts to one-third of its current emissions. It has set up an institution – Designated National Authority – that monitors the reductions on an annual basis to see how it is measuring up to its commitments. Kuwait has set a target of increasing its renewable energy share to 15% by 2030 and Bahrain plans to increase its renewable energy share to 5% by 2020. Qatar, meanwhile, plans to get 20% of its energy from renewable sources by 2030.

“It is good to see these greater levels of ambition arising in the Gulf on the climate agenda and there is room for ever greater results,” says Dr Khoday. “The NDCs were only initial intentions, and the idea is to progressively ratchet up targets during implementation of the Paris Agreement. There are points during the process (the next one being in 2018) where the commitments are meant to be reviewed and, if possible, scaled up. Definitely countries with the capacity and resources, like those in the Gulf, should invest more in taking stronger actions along this direction.”

 

The economic rationale and opportunities

No one today can argue against the path towards renewable energy, and especially in the GCC where the benefits are multi-pronged –  addressing emissions, meeting growing local energy demand and freeing up oil production for exports. “In the Gulf, the vision exists to diversify the energy mix; there is a clear economic rationale for going low carbon. Some estimates suggest that in a business-as-usual scenario, with local energy consumption growing at about 7% per year, the Gulf might register up to half a trillion dollars in lost energy export revenues owing to the rapid diversion of energy to meet local needs,” says Dr Khoday. “In countries which now may be exporting two-thirds of their production and using only a third locally, this might flip by 2030, affecting their development model.”

Apart from the obvious effect on reduced greenhouse gas emissions, this shift toward the use of renewable energy will also help develop human capital and build a sustainable economy. Also, shifting to clean energy will require new technologies and scientific research, which could benefit the Gulf economies, according to Dr Raouf. In this regard, the drop in oil prices has been a blessing in disguise, and have encouraged the shift to clean energy technologies. But further encouragement is needed from policymakers to drive innovation in the renewable energy sector, Dr Raouf says.

Despite what it seems like at first glance, global decarbonisation need not interfere with the diversification strategy. “In the Gulf, large opportunities are emerging in private finance. Irrespective of the drop in oil prices, achieving a transformation to a low-carbon economy goes well beyond a reliance on traditional energy export revenues,” says Dr Khoday. “Countries have to start looking beyond traditional sources of funding and try to generate large-scale private sector finance and build innovative public-private partnerships. For the first time in many years, we are seeing a large scale-up in the role of private sector investment in the climate process. Countries in the Gulf can build new partnerships with the private sector to achieve their NDC goals locally and also to help companies scaleup their global activities in support of climate action. Places like Dubai and Doha are emerging as hubs for finance and private sector activity globally, with particular benefits for partners in Asia and Africa who can serve as important partners for South-South cooperation on new climate change actions.”

All thing considered, there are very few obstacles for GCC countries to shift towards renewables, especially solar power, because they have all the elements of success – relatively cheap labour, ability to secure funds to invest in renewables, pioneering initiatives in the field of renewables such as Masdar in the UAE, joint ventures that can help transfer the necessary technology and, most importantly, the political will to do so. In fact, these same favourable circumstances might be available to us in the future.

 

A piece of the climate finance pie

Access to climate finance has always been contentious, as matters of money generally are. While the road to equipping these funds, the responsibility of developed countries with a historic burden of emissions, has been slow and unclear, developing and underdeveloped nations clamoring to access these funds have been growing in number. In the past, when countries like Saudi Arabia stated that they were a special case in need of climate aid to compensate for the loss in revenue as the world shifts to clean energy, it was met with disdain and irritation by the international community.

“Yes indeed, no one is willing to give funds to the GCC unlike other developing or LDCs,” says Dr Raouf. “This is very clear, as none of the GCC countries who had recently joined the Global Environment Facility is active, except Kuwait. GEF insists that the GCC should contribute to this common resource despite the fact that GCC countries are classified as developing, according to the Kyoto Protocol. They reason that the GCC are a set of wealthy nations and should contribute. The best compromise, in my opinion, is to be classified as both donors and receiving countries at the same time, similar to many other countries that are part of the GEF. This might unlock climate finance from the GEF and other sources as well.”

This is certainly the case with the UNDP which classifies Saudi Arabia, the UAE, Kuwait and Bahrain as Net Contributor Countries. The UNDP’s particular focus in the GCC is to help establish new policies on renewable energy and energy efficiency to scale up low-carbon solutions. “We have provided technical assistance to Saudi Arabia, the UAE, Kuwait and Bahrain in establishing national centres of excellence which work towards creating national strategies for specific, high-energy consuming sectors like transport, buildings, industries, etc., and building partnerships between the government and private sector. In Saudi Arabia, for example, we have a $35 million programme which helped to establish the Saudi Energy Efficiency Center and mobilise government and private sector partners to reduce the energy intensity of growth in key sectors,” Dr Khoday says.

In fact, in recent years, Saudi Arabia and the rest of the GCC have tempered, or rather restructured their demands – the stress is now not on funds but on technology transfer and capacity building. A senior Saudi negotiator told us, “At COP18 in Qatar, all GCC members agreed on a deal that will help us contribute to the efforts of the international community in combating climate change. Through this decision we wanted to make sure the global community helps us in our efforts to diversify our economies and lend us the technical capacity and support to move away from a single-source income towards a bigger pie that will be much less dependent on our fossil fuel resources.”

Apart from this, several GCC members have been active in forging global partnerships for climate action. “At COP22, UNDP launched a new programme in partnership with the UAE, through a generous grant of $11 million from local partners, to support the establishment of a new World Green Economy Organisation in Dubai. WGEO is meant to support developing countries on climate action and engage the role of UAE as a global partner for climate action,” Dr Khoday mentions. “Another important project we are doing with Qatar’s support in the region is the integration of solar power into crisis recovery. Through a generous $5 million grant from Qatar, we have launched a project in the Darfur region of Sudan to provide decentralised solar solutions to villages for the benefit of returnees of the conflict under the Darfur peace agreement.”

These kinds of initiatives help in earning goodwill among the global community and reiterating the commitment of regional governments to climate action. And they also lend weight to GCC voices on the international stage, which should be channeled towards supporting developing countries in their advocacy to achieve the target of scaled-up climate finance meant to reach $100 billion per year from 2020 onwards.

It might feel like the GCC’s aloofness from climate negotiations might actually be a good thing. When the world makes no demands of you (except maybe to not get in the way) and you have few expectations of the world, it might be tempting to take things at your own pace, be reactive rather than proactive. But never has the world come together this way before, in a massive joint effort to craft a shared destiny. It’s a privilege to be part of that, and history would judge us harshly if we are not earnest in our efforts to honour that privilege.