How is the UN Economic and Social Commission for Western Asia supporting Arab states in the green transition?

Let’s start perhaps by you telling us about your work at United Nations Economic and Social Council for Western Asia (UNESCWA) and, in particular, on how your focus on cooperation and sustainable development is supporting countries in the region to tackle climate change; and in doing that, maybe you could also share with us what are the major climate-related challenges facing the Arab region. 

Let me highlight four key challenges.  I can summarize them in terms of financing, in terms of increase in mean temperature, the decline in precipitation, and the climate data availability for informed policy decisions.  These are I can say are the key challenges. 

When it comes to financing, Janos, the Arab states as you know are struggling and are heavily indebted.  Covid-19 pushed our gross public debt to a record high in the Arab region, reaching $1.4 trillion, putting some of the middle-income countries at high risk of debt vulnerability.  Add to it now, today, with the war in Ukraine, we have an additional burden of financing, almost around a billion dollars for these coming months, and our GDP losses in the region are accounting for around $11 billion with almost 3 million additional people now in poverty. 

In addition, talking about financing, the region also receives only 6 percent of its financing for adaptation, despite our region having gone into a water scarcity region.  The Arab region also has very low financing, especially the lesser developed countries (LDCs), which receive only 5 percent of the climate financing that comes to the region, putting them also in a very vulnerable state.   

Because of the debt issue, the financing, and the burden of it, unfortunately also the Arab region receives loans more than grants for climate projects, where loans exceed grants to a level of 10-to-1 percent. 

As we go to temperature, which is extremely important — and I actually come from Kuwait, which has a very high temperature and sometimes we reach in the summer the highest temperatures recorded globally — the region is very much vulnerable to climate change impacts on temperature.  The region already has seen an increase of 2 °C, and they are anticipating by the end of the century an increase of 5 °C, which will be impacting water and food vulnerability, which will be increasing. 

As you know, the region is a very water scarce region.  Sixty percent of our population are living in areas that face water scarcity compared to the global average of 35 percent.  Two-thirds of our region’s fresh water resources cross one or more international boundaries, which aggravates also conflicts in the absence of shared water management networks, and this becomes a very important issue, the issue of the cross-boundary of water and management of water to prevent conflicts in the region that we don’t need.   

As we said, also as a result of these challenges drought and land degradation are driving the food insecurity and humanitarian crises further.  We have lost over 63 percent of our arable land, which is very vulnerable to climate change.  This increases our dependence on imports of food and depletes consequently our foreign reserves, when countries are already, as I stated, struggling with a heavy debt burden. 

Talking about the war in Ukraine, a lot of Arab countries import wheat from Ukraine and Russia, which is also impacting the food security issues.  Wheat is a very staple food item in our dietary nutrition.  It also makes also our countries vulnerable to it. 

Having countries to look and mitigate for food security in terms of planting and growing wheat in their countries, like in Egypt and Syria and other countries, water becomes a very important issue.  The climate impact and the challenges as I said as well as the increase of temperature and the precipitation issue is also making it hard for food security issues. 

We are talking about global climate interlinkages impacting people globally, and this needs to be addressed at a global level with commitment from the global community and all nations.  It is not a solution that one or two countries can solve the problem.  It is a global issue. 

It is actually fascinating to hear how you describe these interlinkages, including with the current geopolitical crisis.  I was just wondering, to what extent you see this as a unifying challenge in the region.  I am sure that these impacts appear differently in the different countries, but still do you see a kind of unified approach to addressing them; and, if so, what is the region planning to do about it? 

First, one of the funny things is that we started looking into the interlinkages between the Sustainable Development Goals (SDGs) in terms of a food, water, and energy nexus.  This is very important.   

With the League of Arab States for the first time we are bringing ministers of water and ministers of agriculture and energy together.  In their first round it was the ministers of water and the ministers of agriculture, since agriculture consumes the majority of the water consumption in our region.  We are bringing them together because this is a very important issue.   

The way we look at it at ESCWA and we are pushing Arab countries is that we are looking at it from the interlinkages perspective of a food, energy, and water nexus, addressing the issues and the challenges.   

We brought the ministers of water and agriculture together with the League of Arab States to start discussing it. 

As you know agriculture, is consuming the majority of water in our region and bringing a solidified mechanism is extremely important to unify it.   

Plus, as I just stated, 60 percent of our water is a transboundary issue that needs management.  It needs also interaction between them. 

The same thing when we talk about energy.  Energy is also extremely important, but it depends also on where the region stands on energy consumption itself and where is the commitment.   

As you know, in the Arab region I can say that there are two groups of countries that I can combine:  there are the oil-exporting countries, the fossil fuel-exporting countries; and we have oil-importing countries.  This is where we start to talk about the transition.  How do we make transition?  Different groups have different transition mechanisms to address the climate challenges. When we are talking about oil-importing countries, there is very much a focus on the green technology transition and renewable energy and they are adopting very much forward on renewable energy This is also where we see a lot of commitment on renewable energy, like we have a commitment to reach a 50 percent renewable energy mix.  Morocco has announced it.  Egypt has announced that by 2035 that they will have 40 percent of their renewable energy mixed. 

We do have another transition, which is the oil-exporting countries’ transition.  Here we are talking about a different type.  Yes, they have a commitment for introducing renewable energy in the mix for energy consumption; but also there is another transition, the circular carbon economy transition we might talk about it at a later stage — and they do have that also despite the fact that there is a commitment on their renewable mix.  For example, we see that United Arab Emirates (UAE), Algeria, and Qatar are committing to having almost 20-to-30 percent of their energy mix in the coming 20 years to be renewable energy. 

In addition, there is a huge investment irrespective of if you are in group one of oil exporters or in group two of oil importers.  Huge investments are coming up on renewable energy in the region.   

We just recorded a new world record.  The lowest price of a bid in solar photovoltaics (PV) tender was in Saudi Arabia, which is almost one cent per kilowatt hour for a 600-megawatt PV plant project that was carried out recently in Saudi Arabia.  We have also a huge 400-megawatt power plant in the region, which is the largest in the Middle East, in Saudi Arabia, and it will be commercial in 2022, this year.  And we see huge renewable energy investments in Morocco, Jordan, and Egypt, where there is huge growth in renewable energy. 

Because of these huge investments in the region we are recording the lowest cost of solar power utilization and production globally are happening in this region as we go along. 

So there is that thinking that there are challenges, but there is unified thinking on how we transition.  The transitioning is very important.  There is an understanding among countries of the transition, and where the focus is of that transition is important.  The commitment on transition is also adopted by all the Arab countries.  That is a very important issue for us as we go along. 

I wonder if it’s fair to summarize what I just heard as, in spite of the huge constraints including some of the current geopolitical constraints, you see that there is actually decent progress being made toward the Paris goals in the Arab region.  Is this a correct overall assessment of what I just heard? 

Yes, Janos, there is progress.  Unfortunately, our record is that still for renewable consumption we are not meeting SDG 7.  There is a lot to be done, but there is a lot of political commitment within the region as we move forward on that. 

I would like to come back to something that you said about your own country, Kuwait, which is particularly prone to exceedingly high temperatures.  If you look at the global level, the Intergovernmental Panel on Climate Change (IPCC), particularly its Working Group One Report, which was published just last year, reaffirms that we are actually facing considerable challenges to achieve the deep emission cuts and the required carbon dioxide removal that the world needs to stay within the reach of the Paris temperature goal.  That is the reality.  It is going to be hard to achieve that. The IPCC Report says that, even in a scenario with net zero emissions around the mid-century and substantial use of carbon dioxide removal, it is still more likely than not that global warming would overshoot 1.5 °C at the global level.  Even the lowest emissions scenario that limits warming to 1.5 °C at the end of the century estimates a temporary overshoot somewhere in between. The question I would like to ask you is: How do Arab states, which are already highly vulnerable to the effects of climate change, plan to address the impacts of such a temperature overshoot, including your own country, which you mentioned very specifically?  Also, what role can ESCWA and the Arab Centre for Climate Change Policies play to support member states in addressing the risks of temperature overshoot? 

Yes, it is a big challenge.  As you rightly said, it is a challenge on people, it is a challenge on food security, and it is a challenge on our economies also as we move forward. Arab states are recognizing these challenges now and they have started putting commitments on them.  We have been hearing commitments on net zero emissions: we have heard it from Saudi Arabia by 2065; we heard it from Kuwait; we heard it from the Emirates; and other countries are committed to it for energy emissions as we go along. But still there is a lot to be done.  I said financing is a key issue because this requires investment.  Now I am talking about a region that is highly indebted, that needs financing, and that cannot sustain to address climate actions to have loans ten times the grants.  We need concessionary loans and we need innovative climate change financing to the region to support countries which are highly indebted, LDCs and countries in conflict. Oil-exporting countries like Kuwait and others are starting to spend billions and billions of dollars — Saudi Arabia, the UAE, Qatar, and all the oil-exporting countries — to mitigate the impact of climate change by having various policies and various projects to have green energy production, capturing, and also engaging in the circular carbon economy to address part of the issues; at the same time creating technologies and utilizing technologies to mitigate the impact of carbon emissions, as well as creating industries for jobs so that transition becomes an economic diversification for these countries also to be independent.   

If carbon is a transition stage of producing oil, it will become a transition and a catalyst for economic diversification to their economies while addressing the climate impact, while bringing the renewable energy mix to their decision-making and planning purposes as we move along.   

There is a balance of the commitment of climate mitigation and addressing climate challenges but also a balance on the development path for the countries and the prosperity of the people for a better quality of life, which is important, and trying to mitigate. But also, as I said, climate change is a global issue, so it is not enough that the regions that are producing oil in the region — compared to global emissions, this region does not emit as much as the global emissions; but we are very much burdened more than what we are emitting, multiples of this.  

This is where we say it is a community, it is a global commitment to mitigate, so that not only the Arab region but other regions — we are seeing a lot of countries that are the least emitters but highly hit by the impact of climate change.   

There needs to be a good consensus.  Developed countries need to stick to their commitments and address the climate change.  As we were saying, there was a commitment of $100 billion on an annual basis for climate financing, and I think the developed countries need to fulfill this commitment so that countries that are deeply indebted, countries that are highly impacted, can also mitigate the climate changes by having the finances needed as we go along.  

In ESCWA we have the Arab Centre for Climate Change Policies, which will support Arab states by providing them increasing access to climate data and analysis through our digital platforms and online tools.  We have the RICCAR Initiative (The Regional Initiative for the Assessment of Climate Change Impacts on Water Resources and Socio-Economic Vulnerability in the Arab Region) which provides open access to regional climate projections and geospatial data sets that have informed impact and vulnerability assessments at the regional, country, and basin levels. 

We created also a social expenditure monitor, an online tool for budgetary and fiscal reform purposes, so it tracks and allocates resources for climate action for member countries.  We try to support also adopting disruptive technologies such as artificial intelligence (AI) and robotic sensors to help foster dialogues among countries and create much better knowledge. As I said, water is a key issue of this.  We and the World Bank are engaging in a collaborative effort for bringing Arab states in the Mashreq region on groundwater to support water security under a changing climate action. 

In addition, for financing, an issue that is a challenge, we at ESCWA started at the end of December 2020 an initiative regarding Climate/SDGs, the Debt Swap/Donor Nexus Initiative.  This is to help create fiscal space for climate action in countries that face liquidity constraints and suffer high debt burdens and to provide transformative debt initiative and financing to provide transformative change in countries to direct resources towards green recovery, and providing creditors an opportunity to make true climate and finance commitments to developing countries. 23:26 So we are bringing the developed countries with the developing countries who are highly indebted and have liquidity constraints to move forward on meeting their commitment on mitigating climate finance and addressing it. 

Finally, we just finished partnering with the League of Arab States and the United Nations Framework Convention on Climate Change to develop a need-based climate finance strategy that can help funnel financial resources to the region through improved targeting, training, and technical assistance.  We just finished also doing this strategy for the Arab countries, which is going to be adopted by the end of April by the Arab League. 

You keep coming back to this very important issue of financing, and very rightly so.  One possible way to increase access to finance is partnership with the private sector.  I was just wondering if there are some interesting examples in the Arab region of governments working with the private sector together in public-private partnership to actually achieve some of these goals. 

Yes, there are a lot of public partnership projects with the private sector because it is very key.  The solution to climate change is not only a burden on the government.  It is a multistakeholder approach.  It is the nongovernmental organizations, the citizens, the private sector, as well as the governments who need to address this. 

There are a lot of projects we are seeing and pushing in terms of renewable energy projects with the private sector.  We see them in Egypt doing a lot of financing of renewable energy.  We are seeing it in water projects also in Jordan a lot.  We see it in Morocco.  We see independent power producer projects in the UAE, Saudi Arabia, as well in Kuwait in the private sector on water treatment.  So we see different private sector contributions on issues of renewable energy investments and adaptation projects in terms of water projects in different areas, but we need to increase this.   

But at the end of the day the private sector is looking for returns on their investments, so we are working also with member states and now with our debt swap to build bankable projects for the private sector to be engaged in these projects and financing to flow for these types of projects. 

I understood that in March the first ever Middle East and North Africa Climate Week took place.  I was wondering whether there was much discussion there about carbon dioxide removal as a possible part of the climate response options that are being considered. 

Yes.  We were just in Dubai for Climate Week.  There was discussion on pushing the commitment for carbon management technologies for carbon capture, the use and storage of carbon.  That was discussed.  Innovative financing was discussed also as we move along.  We are pushing countries to adopt energy transitions and walking through with them what is the best appropriate energy transition mechanism and strategy that countries need to adopt.  

As we seem it is not one strategy fits all.  It depends on the country, it depends on the economic structure of the country, it depends on the financing scheme for the country, and it depends also on where climate change is impacting the country and the commitments of the countries as we move along. 

There were a lot of discussions on these in Climate Week from technical issues, to financing issues, to strategic planning, and to collaboration.  As we started the discussion at the beginning, it is a unifying element in climate change to bring unified policies to the region and to put them on the table. 

Issues of negotiation that are on the table as we move along to Conference of the Parties (COP) 27, which is going to be in Cairo in 2028, include where we position the Arab region and what are the issues that need to be addressed also at the global level during COP 27, so we will have a common agenda? 

So yes, climate change — going back to the first question, Janos, you asked — is a unifying factor, but also it is an issue that is moving countries to better diversification and better economic opportunities in a sustainable manner so that we have sustainable prosperity for our people in the region. 

In these discussions at Climate Week and also elsewhere in the region, have you heard any discussions about this emerging technique that is quite controversial and for some quite challenging, solar radiation modification, also known as solar geoengineering, a technique that could perhaps stabilize global temperatures and avoid this kind of temperature overshoot while the world is decarbonizing and removing carbon from the atmosphere?  Is there any discussion about this that you are aware of in the region? 

As you said, there is uncertainty surrounding solar radiation modification in the Arab region, and this is echoed there also as it is echoed globally.   

The potential for the deployment of this new technology is at its inception because of technology immaturity and the limited physical understanding about its effectiveness to limit global warming.  We are at the inception stage of looking in the region for these types of technologies as we go along.  It is not being implemented, but there is a lot of discussion about the viability of it and the feasibility of it. 

I go back, Janos, to the issue of resources.  At the end of the day you have limited financial resources.  You need to adopt the technologies that allow you to optimize the effectiveness and give you the maximum output of the resources that you need.  You need efficiency and effectiveness because of your limited resources.  Had it been the region has unlimited financial resources, for sure these types of technologies would have been tried and implemented.  With our limited financial resources we need to optimize on the implementation to make sure it is effective and efficient as we go into the output with which we are trying to address and mitigate climate challenges. 

I would like to go back to a particular issue that arises when one is considering carbon dioxide removal or carbon capture and storage, although that also applies to solar radiation modification.  It is the so-called moral hazard.  This concept has a long history in economics, but I would very interested to hear your insight as an economist as to how to overcome that problem in a region where development currently depends on the production of fossil fuels. The issue is basically very simple.  There is fear that if one talks about, let alone deploys, these techniques, there will be less pressure to do what we really have to do, which is to reduce our emissions as a priority.   

Any thoughts on that from your experience as an economist but also from the context in the Arab states, on how one can accelerate emission cuts and remove residual emissions in a way to reach the Paris goals? 

There is some skepticism about it.  In certain Arab countries, especially the oil-producing countries, we are talking about their dependency on oil for income, their livelihood, their economic stability, and development.  To some extent they see that movement will detract from getting the income for sustainability and economic development because it is their source of income, and to some extent this will trigger a tradeoff. 

I think the oil-producing countries in the region understand that at the end of the day oil is a limited natural resource.  During certain stages different countries have different lifelines of their oil reserves, but it will end.   

Countries are trying to diversify, are trying to seek substitutes to their oil for their economic diversification, and to mitigate also the impact.  They also realize that the emissions that are coming up from the production of oil are not acceptable and they have a moral obligation and responsibility at the global level to reduce their emissions. 

Now what is the path to do this?  As I said, it is a balancing thing.  There is a commitment, there is an understanding, and oil production is used as a catalyst for transformation.  It is said to be the means for livelihood.  It is a catalyst for economic transformation and prosperity. 

Countries in the region, especially the oil-producing countries, are realizing that we need to transform and we need that catalyst because this catalyst is the financing capitalist.  Where other Arab regions have limited financial resources to mitigate the impact of climate change and are asking for financial resources to move in our energy transitions from oil in the middle-income countries in our region.  Financing is coming from the production of this oil, so this is the catalyst to move into the energy transition in a proper appropriate manner for the oil-producing countries. 

But it is going to take time.  Is there the political will?  Yes, there is a political will in the process.  The most important thing is the political will, determination, and the acknowledgment of the global responsibility that the countries in this region have to the global community and moving to it. 

But they have to move it also to make sure that the population that they are serving also lives in a developed and a sustainable manner and in a prosperous manner.  You cannot transition and say: “Okay, here it is.  We close.  We are not producing oil.” 

Now we are seeing what is happening, and we see that the impact of energy security itself is so important at the global level.  We are seeing it now with the war in Ukraine.  We are seeing increases in price because of energy availability.  Now the consumer globally is impacted on its livelihood due to the inflation increase, and everyone is being impacted. 

We need also to make sure that we have rationality in the adoption of other technologies and in the adoption of the transition itself because it is not bounded by certain countries but the impact and the energy security.  This is where we need to look into global energy security as we move in the transition.   

We need to make sure countries are transitioning, but also securing energy security so that the global population and individuals at the global level do not get impacted so highly in the absence of energy security availability. 

It is fascinating what you said about the concept of oil production and the finance that it generates being the catalyst for transformation and change.A follow-up question I would ask is: Do you see any particular governance challenges that arise to ensure that in fact it does result in that transformation?  Do you see any interesting developments in that area? 

Yes, Janos.  There is governance starting from the development plans of the countries.  The governance also is that that economic transition is also depending on employment generation, the non-oil economy revenues.  There are different key performance indicators (KPIs) for government and there are different commitments for government as they go along on transitioning in an appropriate manner.  The development plan is number one.  The commitment to the SDGs is number two.  There is governance in terms of addressing SDG 7 on ensuring access to affordable, reliable, sustainable and modern energy; in terms of addressing climate change in SDG 13; in terms of addressing water issues in SDG 6; but also in terms of SDG 8 on economic growth and SDG 9 on industrialization. And SDG 5 for women, because women as well as youth are vulnerable groups that will be impacted as we go into the transition. Climate change is impacting these vulnerable groups of women and youth as they are living in agricultural lands which are becoming degraded in terms of becoming less arable.   

The global community indicators and monitoring is another governance element.  The SDGs have been approved by all the countries in the world as transition and sustainable development goals.  These are goals to implement Agenda 2030. 

So there is a governance body.  Practically you can take SDGs as a governance body to ensure that these transitions are going on, in addition to the national governance elements from their development plans and their indicators as they move along. 

There are big challenges that we are facing.  There are some solutions, as we have heard.  I am just wondering: When you look at the enormity of the challenges that we are facing in the world and in the region that you work in, how does the world maintain hope while not shying away from describing the gravity of the situation?  Are there better ways to communicate these challenges?  Is the concept of planetary emergency useful?  Is the management of risks of temperature overshoot useful?  Is the regional security lens useful?  What are the ways in which we can do this better? 

I think the hope for the future is coming first from our youth generation.  They care.  They are driving the thinking, they are driving the production, and they are driving the consumption.  We are putting elements — the thinking, the policies — but they are the ones who are driving. 

And you see it at the global level.  The youth in least-developed countries and the youth in the developing countries care about the planet, they care about climate issues, and they are willing in developing the mechanisms to push the agenda and implement it.   

You see that in their consumption, you see them enforcing the production and the way the production has means and the elements that are being generated for consumption.  So they are pushing the private sector in their production element.  They are pushing governments in their policies.  They are pushing themselves in the way they are consuming and how they consume things.   

This is a hope.  When you see this, it is a hope.  We are giving them the elements to ensure that this implementation of their hope and their sincerity and their commitment is there. 

I see all the elements you just mentioned as important, but it goes back to the individual level in a rural area, in villages in different countries of the world.  That pushes this.  This is where I am getting the hope from because you see it in their eyes, you see it in their commitments, and you see it in their dialogue among themselves. 

Technology has helped a lot because it brought communication among these views from the global togetherness, and this is very important.  Sharing experiences through the Internet and through their social media is bringing and driving the hope forward and implementing that hope.  That is why I am hopeful that the commitment will be speeded up much more with the commitment of our youth.