Average temperatures in the UAE are almost 1.5°C higher than they were 60 years ago – and projections show the mercury could rise by another 2.4°C in the next 40 years.
An analysis of World Bank data shows the Emirates and the Gulf are highly susceptible to climate change, with summer temperatures already some of the highest on the planet.
The figures show an average rise of 0.75°C since 1990 alone.
Although the figures may sound negligible, such an increase can have a dramatic impact on weather patterns, crop growth and the wider environment.
A separate analysis of rainfall shows annual precipitation has been erratic over the past half century.
The World bank figures echo previous studies that predict the Emirates will see hotter, more humid summers and more unpredictable rainfall in winter. They also explain the heat Emiratis have been suffering through.
Super and ultra-extreme heatwaves
Earlier this month, the town of Sweihan near Al Ain made headlines when it was the hottest place in the world for a day, with an official temperature of 51.8°C.
Residents said the heat felt like an 'inferno' and air conditioning units struggled to cool their homes.
The country began the normally dry summer with a five week blast of near-daily humidity that reached 90 per cent at times.
Yet compared to heatwaves of the future, it has almost been mild.
"The most extreme events that we have experienced so far will become the regular," warns Dr George Zittis, an associate research scientist at the Climate and Atmosphere Research Centre of the Cyprus Institute.
His recent research, the first of its kind focused explicitly on the Middle East and involving scientists from the region, projects that by mid-century, 'super and ultra-extreme heatwaves', where temperatures above 56°C could last for weeks on end, will become increasingly common. By the end of the century they could happen annually should business-as-usual emissions continue.
"The Middle East is considered a climate change hotspot, because we expect the temperature to increase more during the summer season...we expect an expansion of the summer season.
"We are talking about events we have never seen in the region," he says.
Extreme humid heat events
In addition to severe heatwaves, it is also getting more humid. According to research led by Dr Julian Bolleter of the University of Western Australia in Perth on 'wet-bulb' temperature, coastal urban areas like Abu Dhabi, Dubai, Ajman and Sharjah will see the greatest impacts, despite being less hot than inland cities such as Al Ain and Al Dhaid.
“While these [inland] areas are slightly hotter in summer, the air is considerably drier, and thus wet-bulb temperatures reached will not be as extreme,” according to the paper.
Wet-bulb temperature (TW) is a measurement of air temperature and humidity, and higher readings mean more severe, unbearable conditions. Any wet-bulb temperature exceeding 35°C is considered extreme, a phenomenon that has only been recorded 14 times on land.
These typically rare humid heat events have become less so since 1979, and are forecast to become even more frequent in future. They are most prevalent in the Gulf region.
Unfortunately, staying inside all day is not a solution.
“Cities need people outside doing things,” said Bolleter.
“You cannot air condition the entire city. There’s a big concern if there was a big power failure.”
Instead, he calls for policymakers to consider proactive planning of urban centres away from coastal areas.
“While these areas are slightly hotter in summer, the air is considerably drier, and thus wet bulb temperatures will not be as extreme.”
Sustainable development in the desert
Just as the UAE has sought to find global solutions to climate change, evidenced in its bid to host Cop28 and push for alternative energy, it is also preparing for local effects such as increasing temperatures and sea-level rise.
The Environmental Agency Abu Dhabi told The National that, in cooperation with other government agencies, it had considered what measures might be needed.
“As the process of diversification accelerates, and the dependence on oil and gas diminishes, the likelihood of concentrating more infrastructure and development further inland could increase,” it said.
It added that a process to manage sustainable development in coastal areas was being developed.
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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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