Green Economic Development in the Middle East

By: Batir Wardam

It is easy to note that green economic development is gaining more momentum in the Middle East and North Africa (MENA). This can be attributed mainly to necessity more than a lucrative option to select between various scenarios. The MENA countries’ struggle with degradation and scarcity of natural resources has put a huge challenge for governments, businesses and civil society alike to develop and adopt green technologies and sustainable ways of conducting business.

 International dynamics will also add more urgent driving forces for MENA to invest seriously in green development. The post Bali process within the Kyoto Protocol for Climate Change puts obligations for the first time on all developing countries for reducing their emissions, including the GCC countries and other oil producers in the region.

The response has been impressive by some countries. Governments and business in GCC countries have started to design and operate state-of-the-art green construction methodologies. Countries in the Mashreq and North Africa achieved encouraging successes in developing a mixture of new policies and technologies for green development.

Some of the biggest companies in the region are developing and implementing their own Environmental and Social Corporate Responsibility options in reducing greenhouse gas emissions and shifting to alternative energy sources.

In Jordan a process of environmental reform in the past three years has paved the way for decisions that helped in removing barriers against potential investments in green business and development. The recently endorsed national energy strategy seeks to increase the percentage of renewable energy in national primary energy production from 1% now to 10% in 2020. This transition should be done through a package of investments estimated at US $ 1.4- 2.2 billion. The investment package includes Build-operate-transfer (BOT) deals for wind energy with a total capacity of 660 MWs and solar energy innovations for 400 MW.

The new Renewable Energy Law which will hopefully be endorsed later this year provides interested investors with the incentives of 100% tax exemptions in the first 10 years. It also opens the door for small scale facilities to install renewable energy technologies and feed the national grid. The Ministry of Environment is currently engaged in optimistic private public partnerships for medical and hazardous waste management, industrial water reuse and treatment and the very promising Clean Development Mechanism arising from the Kyoto Protocol with an expected return of 50 million JDs in five years. About 15% of the returns from the CDM will be channeled to the newly established Environmental Protection Fund which will provide financial support for industries wishing to adopt innovative sustainable solutions in their production and waste management systems. 

Green development can be achieved through the design and implementation of innovative sustainable economic options. Such actions will require a stable and free movement of financial capital and latest technologies.  Globalization is all about freedom of movements of ideas, people, knowledge, technologies, goods and services and such free flow will enhance the exchange of best practices and best technologies among various countries in different levels of industrialization and technological advancement.

 Markets in MENA countries should include legislative and administrative frameworks for empowering the production and use of environmental goods and services that comply with global sustainability standards through various tools include tax cuts. This includes a vibrant carbon market and involvement of the banking sector in clean development mechanism (CDM) projects.

 Corporates in MENA should design and implement corporate sustainability plans including clear targets for emissions reduction and water savings as well as sustainable use of natural resources and pollution prevention. Moreover, laws and regulations about Intellectual Property Rights should be conducive and friendly to the free movement of state-of-the-art environmental technologies by reducing barriers to technology transfer and localization in MENA.

 The accumulated wealth generated from peak oil prices may be wisely used for developing indigenous-based renewable energy technologies and options. The MENA region should become an international hub or a center of excellence for renewable energy development especially in solar energy. The renewable and alternative energy options developed in the MENA region should be enough to maintain the region’s pivotal goe-political and economic global role even after reduced reliance of the west on foreign oil.

 To unblock the supply chain for green development MENA countries have to develop innovative sustainable solutions to attract investments in sustainable technologies. This can be a function of reduced taxes and even exemptions for materials and products helping to achieve sustainable options at the level of businesses or even the households. It will need a concerted effort to approximate such regulations amongst MENA countries to allow the free exchange and movements of ideas and technologies of green development between the various MENA countries and provide a conducive environment for entrepreneurship in sustainable business

About bwardam

Mr Batir Wardam is a Jordanian environmentalist with professional experience in disciplines of natural resource management, environmental policies and communication. He has a 15 years working experience with national academic institutions, NGOs, the government of Jordan and international and regional environmental organizations including UNDP, UNEP and IUCN. Mr Wardam is currently working with UNDP as a project manager for the third national communication report on climate change in Jordan.
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