People walk near a solar-powered smart palm tree in Dubai. EPA
People walk near a solar-powered smart palm tree in Dubai. EPA
People walk near a solar-powered smart palm tree in Dubai. EPA
People walk near a solar-powered smart palm tree in Dubai. EPA

Dubai moves ahead with plans to reduce carbon emissions


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Dubai will begin to execute plans aimed at boosting energy efficiency and reducing carbon emissions in the emirate, officials said.

Dubai’s Supreme Council of Energy held a meeting to review the emirate’s efforts to achieve net-zero carbon emissions by 2050, Dubai Media Office said on Sunday.

Sheikh Ahmed bin Saeed, chairman of the Dubai Supreme Council of Energy, emphasised the importance of co-operation among the related organisations in the UAE to achieve the objectives of the UAE Net Zero by 2050 strategic initiative, while chairing the council's 73rd meeting online.

“We discussed the national system for trading carbon credits in co-operation with the Ministry of Climate Change and the Environment,” said Ahmed Al Muhairbi, secretary general of the Dubai Supreme Council of Energy.

“We also discussed a classification programme for existing buildings to monitor the efficiency of water and electricity use as an optional initiative for residential and commercial buildings.”

Dubai's Enoc is in talks with suppliers about the possibility of using the Falcon pipeline to supply jet fuel to Al Maktoum International Airport to reduce land transport and carbon emissions, the media office said.

Passenger traffic at Dubai’s second aviation hub has surged in recent weeks due to Fifa World Cup flights.

“At the Dubai Supreme Council of Energy, we are working to implement the road map and plans that include national initiatives and strategies to reach net-zero carbon emissions by 2050 and consolidate the foundations for a low-carbon economy,” Saeed Al Tayer, vice chairman of the Dubai Supreme Council of Energy, said.

The UAE, Opec’s third-largest oil producer, is pursuing goals to reduce its carbon footprint and became the first country in the Middle East to set a net-zero target last year.

The Emirates plans to invest $160 billion in clean and renewable energy sources over the next three decades.

It is building the Mohammed bin Rashid Solar Park in Dubai with a five-gigawatt capacity, one of Dubai Electricity and Water Authority’s mega infrastructure projects.

Abu Dhabi, which is developing a two-gigawatt solar plant in Al Dhafra region, has set a target of 5.6 gigawatts of solar PV capacity by 2026.

In 2017, the UAE launched its energy policy to boost clean energy and cut dependence on natural gas to generate power.

The UAE Energy Plan 2050 aims to cut carbon dioxide emissions by 70 per cent, increase clean energy use by 50 per cent and improve energy efficiency by 40 per cent by the middle of the century, resulting in savings worth Dh700 billion ($190.6 billion).

The policy’s targets for the source of energy for local consumption by 2050 have been set at 44 per cent from renewables, 38 per cent from gas, 12 per cent from clean fossil and 6 per cent from nuclear.

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Water waste

In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.

Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.

A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.

The Emirates is the world’s third largest per capita water consumer after the US and Canada.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Saudi Arabia

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Updated: December 18, 2022, 12:41 PM