For just the second time in its nearly 30-year history, the United Nations Climate Change Conference (COP) will take place in an Arabian Gulf country. And as the UAE makes its final preparations to host COP28 in Dubai, the world’s attention and scrutiny is turning to the region.
In this backdrop, business and political leaders from across the world, including Michael Bloomberg and US Climate Envoy John Kerry, have stressed the fundamental need to find climate solutions that encourage real progress in all nations and across all industries.
Many commentators highlight that much has changed in the region since Qatar hosted COP18, 11 years ago. Reducing carbon emissions and building a more sustainable future energy mix is at the heart of the diversification strategies being rolled out across the Gulf.
The projects at the heart of Saudi Arabia’s Vision 2030 have committed significant resources and investment to the advancement of technologies that will drive forward the energy transition globally.
For example, the KSA-based ENOWA is creating a renewable energy system for NEOM that will power its regions, supply desalinated water, and create exportable hydrogen – all through green energy.
The UAE also recently announced plans to invest $54 billion in energy and triple renewable sources, including low-emission hydrogen fuel and infrastructure development for electric vehicles. With growing energy demands, UAE’s Energy Strategy 2050 outlines a clear commitment to decarbonisation, driving significant investment into solar, wind, green hydrogen, and electrification.
The Mohammed bin Rashid Al Maktoum Solar Park, for instance, is the world’s largest single-site solar project that will save over 6.5 million metric tonnes of carbon emissions annually.
At the same time, politicians, scientists, academics, business leaders and activists are increasingly turning their attention to and scrutinising the net-zero strategies being implemented by the GCC’s largest companies, many of which operate in the carbon-intensive energy, industrial and aviation sectors.
Greatly expanding renewable energy investment, lowering carbon intensity, and driving efficiencies have been core focus areas of current net-zero strategies. But balancing the integral role that these companies have in enabling economic growth in the region and ensuring energy security globally means that much of the conversation in now turning to carbon capture and sequestration.
There is a clear consensus among scientists and policy makers that high-integrity nature-based carbon capture projects should play a central role in reaching net-zero targets. The IPCC’s Sixth Assessment Report, ‘Climate Change 2022: Mitigation of Climate Change’, highlights that nature-based solutions offer a way to meet carbon targets while also generating a wider array of benefits for sustainable development, the protection of biodiversity and improvement of air quality.
Significant investments in nature-based carbon capture projects have already been made across the GCC, in addition to announcements of further ambitious targets. Saudi Arabia has committed to planting 10 billion trees in the Kingdom and ensuring the protection of coral reefs in the Red Sea. The foremost energy players in the region such as Saudi Aramco, ADNOC and SABIC have planted over 10 million mangrove trees, with projects currently underway for several million more.
However, demonstrating how current and future nature-based projects are enabling these companies’ net-zero strategies remains a key challenge. Many people find it hard to draw a clear link between the development of vast mangrove parks and the impact they will have on a net-zero future.
In the build up to COP28, a more strategic approach is needed to ensure that global audiences understand the scope, scale and impact of the nature-based climate solutions being implemented in the region.
The growth of carbon credits and voluntary carbon markets offer a significant opportunity to achieve this goal and demonstrate action. Carbon credits create a financial framework that places a dollar value on the amount of greenhouse gases removed from the atmosphere, reduced within business operations, or avoided entirely.
Providing a financial framework helps businesses to consistently report on these projects and show their commitment to driving climate impact in a way that people can rationalise and understand.
Access to voluntary carbon markets, where these credits can be bought and sold by companies as they implement their wider net-zero strategies, provides businesses with greater flexibility in choosing when, where and how their emissions can be reduced. In a recent white paper on voluntary carbon markets, J.P. Morgan highlighted that this will encourage wider investment in climate solutions while greatly reducing associated costs.
But as J.P. Morgan also points out, carbon markets are not a silver bullet. There are a number of challenges still posed by the lack of high-quality carbon capture projects that can help businesses to meet their decarbonisation targets.
This need for high-integrity projects represents a significant opportunity for the region. With a proven track record of developing localised projects that protect biodiversity, support local communities, and offer significant value in terms of carbon capture, the GCC region is well positioned to become a global leader in this area.
Supporting project developers to create high-integrity nature-based projects will also ensure the growth of local skills and expertise in a field that will become increasingly important to achieving regional diversification strategies, as well as global net-zero targets.
Roberto Croci, Director of Value Creation and Transformation at Public Investment Fund (PIF) and Advisory Board Member to Carbonaires, observes, “Gulf countries have taken significant first steps in investing in and developing nature-based projects with great carbon capture potential, in line with ambitious climate targets.
Though this is exemplary, Gulf states must now establish a strategic approach to maximise the impact of these projects and be able to demonstrate this, especially as the region has promised to deliver “a transformational COP of action.”
The GCC’s governments and largest companies have already made significant progress in developing and executing on their net-zero strategies. But as the UAE prepares to host COP, there is a heightened need to ensure that the impact of these strategies can be effectively demonstrated to global audiences.
The focus must now be put on the development of financial frameworks, governance standards, and high-integrity carbon capture projects that ensure transparency, consistent reporting, and third-party verification. This will be integral to effectively demonstrating the region’s commitment to transformational action.