Covid-19 has led to surge of interest in green economy, report says

Governments are reassessing their priorities because of the pandemic, according to study

US Special Presidential Envoy for Climate John Kerry looks at Noor Abu Dhabi solar plant in Abu Dhabi, United Arab Emirates April 3, 2021. XXX
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The coronavirus pandemic has led to a surge of interest in green policies - especially in the Middle East, a report said.

The study found the global crisis  had opened the door to sustainable policies once seen by governments and investors as too risky.

Investments in renewable energy, pledges to cut emissions and the embrace of new technologies were making the Middle East a greener place.

The Green Gambit: Investing for Corporate Strategic Advantage in the Post Covid-19 World was issued by the Arthur D Little management consultancy firm, which has offices in Dubai and the US.

Released on Monday, the report said a long-term transformation - especially in the Middle East - was beginning.

It highlighted Abu Dhabi National Oil Company, Mubadala and industrial holding company ADQ's agreement to form a hydrogen alliance as one example of this push.

That aims to establish Abu Dhabi as an exporter of hydrogen and to build a substantial green hydrogen economy in the UAE.

“Governments are exploring green investments as they transition to cleaner economies. Investors are advancing their strategies through sustainability targets, and private equity firms are allocating more funds and monitoring the carbon footprints of companies they work with," said Adnan Merhaba, partner and energy practice lead at the firm.

“These are encouraging signs, with many examples and proof-points indicating a successful long-term transformation that the Middle East will witness in due course.”

The report explained how - in the period before the pandemic - climate change and sustainability were rising higher than before on the agendas of large companies.

“Although Covid-19 may have temporarily pushed climate change off daily global newsfeeds, 2020 was, in fact, a year in which global political ambitions towards addressing climate started to look much more robust, with, for example, new greenhouse gas reduction targets agreed in Europe and the US rejoining the Paris accord,” the report said.

“One of the positive consequences of Covid-19 has been a resetting of global priorities towards green investment as a means of rebuilding economies.”

The study came a day after US Climate Envoy John Kerry attended the Regional Climate Dialogue in Abu Dhabi.

Mr Kerry told The National the world needed to work to raise the ambition to meet the challenge presented by climate change.

Sunday's talks in the capital ended with 11 nations vowing to ensure the success of the 2015 Paris Agreement, while doing more to tackle climate change.

The UAE was praised in the report because of its green commitments.

“The UAE is expected to provide 50 per cent of power needs from renewable sources by 2050 due to nuclear and solar power contributions,” the report said.

Saudi Arabia was praised in the report.

“The country’s leadership aims to invest up to $50 billion in the renewable energy sector by 2023 as part of its strategy to reduce oil dependency and diversify its energy mix,” the report said.

However, a report released last month by the UN said the global commitment to a post-pandemic green recovery was falling short.

Out of $46 trillion spent by 50 of the world’s leading governments in 2020, only $386bn went on projects that could be considered green or sustainable, the UN study said.

It added that "opportunities to spend wisely on recovery are not yet over".