The UAE has finally lost the world title it never wanted – the most environmentally wasteful country on the planet.
The UAE has finally lost the world title it never wanted – the most environmentally wasteful country on the planet.

UAE drops down the ecology-footprint league



ABU DHABI // The UAE has finally lost the world title it never wanted – the most environmentally wasteful country on the planet.
Every two years since 1998 the World Wide Fund for Nature (WWF) has produced a global ecological footprint chart, and the UAE has topped every chart since 2000.

But in the latest Living Planet Report published today the unenviable top spot went to Qatar, with Kuwait second and the UAE dropping to third.

The UAE is becoming more aware of the need to conserve resources, said Tanzeed Alam, policy director at the Emirates Wildlife Society – World Wide Fund for Nature (EWS-WWF).

Recent measures such as the introduction of efficiency standards for some air-conditioning units, green building codes in Abu Dhabi and renewable-energy targets in the capital and in Dubai are all moves in the right direction.

"The UAE has already started some domestic actions," he said. "We still feel there is more that needs to happen."

The biannual report measures humanity's need for natural resources such as land for crops and grazing, fishing grounds, forests and others, against the planet's ability to produce these resources.

Overall, demand for natural resources has doubled since 1966. Humanity needs 1.5 planets to sustain itself, meaning that people are degrading natural resources at an alarming rate.

Although the UAE's total environmental footprint is well below 1 per cent of the global total, its per-capita footprint of 8.4 global hectares (gha) per person is several times higher than the global average.

Kuwait's per-capita footprint is just under 10 gha per person. Qatar, the world's largest exporter of liquefied natural gas, reaches nearly 12 gha per person.

With harsh desert climates and scarce fresh water supplies, the three Gulf countries "share a common challenge", said Mr Alam.
"We all need a lot of electricity to desalinate water and to keep buildings cool in summer. There is also wasteful consumption of resources."

The latest report uses data from 2008. Its previous edition, published in 2010, used data assembled in 2007. Then, the UAE's footprint was 10.68 gha per person.

"There have been methodological adjustments to the way the country's footprint is calculated and it may be partly to do with the economic slowdown the UAE has faced," said Razan Al Mubarak, secretary general of the Environment Agency - Abu Dhabi.

"This could also be an indication that resources are being consumed more efficiently."

Besides the global territory necessary to produce the food, timber and other resources for sustaining a population, the footprint concept also examines the land necessary to build houses and infrastructure, and absorb produced wastes.

One important type of waste is carbon dioxide. This and other greenhouse gases are released when fossil fuel is burned to power vehicles and produce energy. About 80 per cent of the UAE's environmental footprint comes from the consumption of energy and other carbon-intensive goods and services.

Mr Alam said saving energy and water offered the greatest opportunities to reduce the UAE's high carbon and environmental footprints. One area for policy-makers to consider is drafting a comprehensive federal strategy to combat climate change.

Another important step is to draft implementation plans for Abu Dhabi and Dubai's renewable energy targets.

Developing green buildings codes for existing buildings also offers opportunities, he said.

While a significant portion of a country's environmental footprint has to do with decisions made by its institutions or resource usage by its companies, individuals also play a role. The report found that individuals in high-income countries have a footprint five times greater than those in low-income countries.

If everyone lived as the average resident of Indonesia does, only two-thirds of the planet's bio-capacity would be used, the report said. If we all lived as the average American does, humanity would need four Earths to sustain its annual demand for resources.

vtodorova@thenational.ae

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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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