The transition to a greener future in the Middle East and North Africa would require governments to adopt new policies and tools that will help fast-track the creation of a low-carbon economy, according to a report published by the Mohammed bin Rashid School of Government.
Titled ‘Financing a Green Transition in MENA’, the report outlined two main ways countries in the region can increase green investments. The first one is by enhancing its enabling environment for sustainable investments, and this can be done through policy and governance frameworks that support better finance flow for these types of investments. The report suggested some projects such as green investment banks, creation of regulating bodies for energy efficiency markets, and the development of a green taxonomy.
The other way is to adopt key financial and economic tools that can help raise and deploy capital, manage risks, and mobilize private sector investments. Green bonds or green sukuk are some of these examples as well government-owned corporations financing low-carbon industries.
Jeffery Beyer, managing director of sustainability firm Zest Associates and co-author of the report said: “The MENA region has the opportunity to capitalize its resources, create jobs and tackle climate change but this will require greater investments from the private sector. There are actions governments can take now that are low-cost, relatively easy to implement and would have a big impact in making the Middle East a more attractive environment for green investment.”
The report cited national recommendations that are focused on its unique circumstances where there are current limitations or lack of initiative, while the regional recommendations highlighted the importance of collaboration to deliver stronger impact than if the measures where individually done by each country.
These recommendations offer various ways in which governments can mobilize US$230 billion of annual funds for the region to contribute in achieving the UN Sustainable Development Goals.
The study, which was funded by HSBC, was presented during Arab Green Summit held in June 2022 in Dubai.