The Gulf is on track to lead global climate tech

Acciona

The catastrophe in Libya’s Derna valley basin is a deadly reminder of how climate change is increasing the frequency and strength of Mediterranean hurricanes. 

Pakistan’s floods were the worst disaster in a decade, uprooting 33 million people. Both events overwhelmed ill-designed, badly maintained legacy infrastructure. Everywhere on the globe faces similar threats.

The Middle East and North Africa is one of the regions most severely affected by what the UN recently called climate breakdown.

This will involve battling extreme weather events, rising temperatures, increased water stress, rising sea levels, falling rainfall, dwindling agricultural output and growing desertification.

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Despite global and regional energy transition commitments, it is delusional to believe that the human species will overcome divisive geopolitics and contradictory interests and undertake the radical strategies to limit warming to 1.5C by 2030, or 2.5C by 2050. 

We need to focus on mitigating the risks and adapting. This means moving beyond renewable energy, mobility and energy storage to massive, sustained investment in climate-resilient infrastructure and related technologies.

Water management

Global water demand is projected to increase by 20-25 percent by 2050, and it is likely that 100 percent of the Mena region’s population will live with “extremely high” water stress by 2050. If not countered, this could lead to growing political instability and potential water wars.

The impact of water stress needs to be addressed through regional co-operation and management for common water resources, such as the Nile and Euphrates.

At the national level, policy tools are required. Rational, economic pricing of scarce water resources will underpin more efficient management of everyday use. The deployment of climate tech investments to increase scarce resources is imperative.

Desalination exports

Desalination is the main answer to avoid depleting non-renewable aquifer resources. The GCC has a comparative advantage: it accounts for more than 50 percent of global water desalination capacity. In addition, the GCC Secretariat anticipates that the Gulf will boost such capacity by 37 percent over the next five years, by investing $100 billion. 

Desalination is increasingly powered by solar energy, helping both energy and water security.

Saudi Arabia’s giga-project Neom is developing a reverse osmosis desalination facility entirely powered by renewables, while there are other solar-powered desalination plants in the UAE and Oman. 

Tried and tested in the GCC, this exportable technology can address the growing global water availability gap and water stress.

Increasing temperatures

Rising temperatures drive up demand for air conditioning, with cooling representing up to 70 percent of peak energy consumption. As a result, ownership will increase from 37 percent of the global population today to more than 45 percent in 2030. But this is a legacy technology.

District cooling (equivalent to district heating) delivers chilled water to buildings and provides sustainable cooling powered by renewable energies. It is up to 10  times more energy-efficient and cost-effective than traditional air conditioners.

The GCC states have pioneered and implemented district cooling as an integral part of their public utilities’ infrastructure, real estate and urban developments. The model and technology could be exported to the rest of Mena and to rapidly growing and urbanising Africa, South Asia and elsewhere. 

District cooling can be deployed in new urban developments and existing buildings can be retrofitted and connected to necessary plants. Increased global adoption could save $1 trillion in energy costs by 2035.

Furthermore, it is incorporating new technologies, including digitalisation and AI, along with integrating renewable energy sources into existing models, supporting the energy transition.

Financial resources

All this will require substantial, sustained financing. The GCC sovereign wealth funds are among the largest global investors in renewable energy.

The region’s international financial centres are gradually developing instruments that can facilitate access to finance for indigenous climate tech companies.    

These vibrant, innovative private businesses should also be incentivised by reducing barriers to entry, streamlining and reducing regulations. They also need access to climate data.

With financial firepower exceeding $4 trillion, the Gulf can potentially become the location for global climate finance and tech, as well as the latter’s main exporter.  

As the UAE prepares to host Cop28, it is anticipated that the GCC’s wealth funds, financial markets and active private sector will increasingly diversify their investments into resilient infrastructure and climate tech. 

Adapting in these ways to the risks the region faces is not only the right response; it will increase mobility and clean energy adoption within Mena and around the world.

Dr Nasser Saidi is the president of Nasser Saidi and Associates. He was formerly chief economist and head of external relations at the DIFC Authority, Lebanon’s economy minister and a vice governor of the Central Bank of Lebanon