Desert turns green: the efforts made and obstacles faced by oil-rich states

Nadine Hawa for CNBC, March 2008

As its name indicates, Global warming is a Global issue…And recent years have witnessed a surge in activities aimed at protecting the environment and “going green” in this part of the world which is predominantly a huge desert, where oil is more readily available than water.

Leading by example is State-controlled Abu Dhabi Future Energy, known as Masdar. The Masdar initiative is aimed at developing a $22 billion “No Carbon” urban district which will be home to 50,000 people, hold 1,500 businesses, and where no cars except hybrid vehicles, will be allowed. The district, dubbed Masdar City, will need a quarter of the typical power-generating capacity for a similar-sized community, and its water needs will be 60% lower.

Dubai is also doing its bit, with the establishment of the regions first fully integrated waste management facility. The Dubai Recycling Park is a joint project between Dubai Industrial City (a subsidiary of Tatweer and a member of Dubai Holding) and Kuwaits National Projects Holding Company.

On his recent trip to Dubai, Jose Maria Figueres, former President of Costa Rica and former CEO of the World Economic Forum turned high-profile activist, spoke to CNBC about spearheading an expedition comprising of Gulf Arab nationals to the Arctic Circle, in an attempt to raise regional awareness on the issue of Climate change. Mr. Figueres told CNBC that in order to see big results “environment protection has to be made a good business opportunity”.

And that is precisely the main obstacle the region is facing. The issue hindering full advancement in the matter is that developing countries do not view this earthly cause as a sufficiently lucrative business.

Or at least, not yet.

Oil rich states, such as the UAE, seem particularly reluctant to reduce the world’s dependence on oil. And without having the appropriate insight to make informed decisions about profitable alternatives, who can blame them?

Potentially profitable opportunities for forward-thinking investors need to be created. As Boualem Tilioune, technical advisor to the Dubai Municipality Building Permits and Regulations Section says: “We are determined to convince the real estate industry that going green can save money. Right now, contractors have the attitude of ‘tomorrow i am not here’, but if we can convince owners that a higher initial outlay will decrease operating costs by up to 50% we will be in Business.”

Arab states need to start acknowledging their role in climate change. It is important that the second round of the Kyoto Protocol does not exempt Arab states, as stated in the non-binding “Washington Declaration” agreed on February 16th 2007, for the creation of a global cap-and-trade system that would apply to both industrialized nations and developing countries, with the hope of being in place by 2009. Gulf Arab countries should control carbon emissions as part of a comprehensive global program for the reduction in CO2 emissions, and push for the creation of a regional emissions trading platform similar to the EU’s Emission Trading System.

Furthermore, one cannot ignore the role of NGO’s who have greatly helped put the environment on the regional agenda. However, without the tandem contribution of the public and private sectors, the pursuit of a sustainable and profitable solution will not yield many great results. Last but not least, the role of the ‘individual consumer’ is not to be overlooked, as all efforts would go to waste, if today’s consumers are not made aware of the benefits clean energy has to offer in their present and future lives.