The United Arab Emirates path towards a green economy

Written by Eleonora Rizzo

Close your eyes. What would be your first thoughts if I mentioned Dubai or Abu Dhabi?
I guess you’ll start by picturing desertic landscapes and majestic dunes under a burning sun, and then, gradually, you'll see the city, with its breathtaking skyscrapers and hundreds of flashing lights. Unbridled luxury, artificial islands, opulence, this is what we would normally associate to the United Arab Emirates. 

However, many ignore that there is a secret story behind all that glitter and gold. The UAE are hiding a quiet but firm intention to take the leads towards a new and more sustainable way of living. A green revolution is moving forward under the sun of the Persian Gulf.

Economic overview and the dependence of oil

According to the Oil & Gas Journal estimates as of January 2017, the UAE holds the 7th largest proved reserves of oil in the world at 97.8 billion barrels, with most of the reserves located in Abu Dhabi (approximately 96% of the UAE’s total). Although oil exports still account for the largest share of GDP , the UAE are on their way towards a successful diversification of the economy. After the oil price crash in 2015, the central government set the goal to reduce oil contribution to GDP to 20% by 2020. In the meantime, there has been a generalised effort towards the promotion of innovation and sustainability in many other sectors. Favourable tax policies, strong transportation facilities and the establishment of 37 free trade zones make the UAE a very appealing business environment. 

The diversification of the energy sector

Unlike the case of European countries, the UAE's shift from fossil fuels (oil & natural gas) to renewables is mainly due to economic sustainability reasons rather than pure environmental awareness. Among the most important steps taken so far, there’s the $163bn in clean energy projects to ensure that the country’s power needs will be generated by renewables by 2050 and the creation of a solar power plant in Dubai by 2030. 

Nuclear energy investments are another important - and controversial - aspect of the story. The need to compensate for the country’s future energy demand without relying on fossil fuels, pushed the UAE government to pursue a peaceful nuclear energy program. Energy experts worldwide and government officials have called the UAE’s approach a “gold standard” for countries interested in exporting nuclear energy for the first time (Peaceful Nuclear Energy Factsheet, January 2010). The UAE’s branding of nuclear as a renewable source of energy will drive the nation’s economic development while reducing the country’s ecological footprint. It’s no secret that the country has one of the highest per capita carbon footprint in the world, 19.31 metric tons per person in 2014 according to Statista. Therefore, the urge to implement low carbon measures affecting both industries and individual consumption. Experts worldwide are still divided over the fact that nuclear could be included into a renewable energy program or not. Even so, nuclear represents a golden opportunity for a carbon intensive country such as the UAE where the dependence of the economy to natural gas & oil has become such a serious issue. 

Driving consumer behaviour

 Probably, the greatest challenge for UAE's government will be that of driving consumer behaviour towards more sustainable envrionmental practices. The shift in individual behaviour is aggravated by three key factor, which are :
  1. Absence of taxation both at an individual and corporate level that makes it very hard, now, to implement green taxes and set higher prices from clean energy sources.
  2. Extreme whether conditions making it impossible to live without air cooling systems
  3. The composition of society, constituted mostly by immigrants who stay in the country for just a few years. This represents a disincentive for the government to invest in environmental education.
An energy-efficient strategy will therefore need to address all these environmental issues from an integrated and coherent approach. UAE's strategy should include a tailored regulatory framework; a communications and information initiative to persuade residents, builders, and other stakeholders to reduce their energy consumption; and finally, R&D component to make sure the UAE is capitalizing on emerging technology to boost efficiency.