Middle East must do more to protect its natural capital

07 November 2023 Consultancy-me.com 3 min. read

The private sector in the Middle East needs to take urgent action to protect its natural environments and resources. That is according to a report from Oliver Wyman that analyzed what Middle Eastern countries can (and should) be doing to protect their natural capital.

It is estimated that around 40% to 50% of the Middle East’s GDP either highly or moderately depends on the natural environment. That calls for increased protection of limited resources, endemic vegetation, and wildlife, an urgent necessity if the region hopes to attain long-term sustainability.

Natural capital refers to elements in a country’s natural environment that can provide valuable goods and services to society and are essential for the local economy.

Middle East must do more to protect its natural capital

Gorge sinkhole and natural bridges in Tannourine, Lebanon

The concept of natural capital is a way to see the world’s stocks of natural assets through from an economic perspective. Society and businesses rely on these assets – like clean air, rivers, costal habitats, forests, and soil – in order to prosper.

“While it is heartening to see that several Middle Eastern governments are incorporating considerations around nature in updated polices, input from the private sector (and financial institutions) would amplify their efforts,” the report from Oliver Wyman (in conjunction with the World Government Summit) notes.

There is a vicious cycle in which nature loss can amplify climate change risks, with those increased risks then, in turn, likely to accelerate nature loss. For example, deforestation is known to release massive amounts of carbon dioxide, which then exacerbates climate change. With worsening climate change then come more droughts and wild fires, leading to more deforestation.

In the Middle East, major environmental challenges include scare water resources and desertification. In the GCC, for example, mangroves are ecologically significant for their ability to improve water quality, provide breeding grounds for marine animals, and to store atmospheric carbon, besides also being great for eco-tourism.

The UAE has taken significant measures to protect these species, with their stock of mangroves doubling in the past 30 years. In that same period, by contrast, around 22% of the world’s mangrove have been lost.

In Saudi Arabia, environmental conservation efforts have focused on the Red Sea and the coral reefs that thrive in the region. Updated regulations have increased the protection of coral and restoration projects have been undertaken. And coral reefs are not just pretty – they also contribute some of the same benefits that mangroves do.

With over half of the world's economic output (approximately $44 trillion) being significantly influenced by the environment, environmental degradation has severe consequences across the board. Those threats include biodiversity loss, pollution, and resource depletion, which can all impact societal health, supply chains, and food security.

These challenges pose a significant threat to industries reliant on nature, like agriculture, food and beverages, and construction, which collectively contribute $8 trillion in gross value added globally.

In the Middle East, environmental degradation can have a huge negative impact on fisheries, with region’s seafood market valued at $21 billion in 2022. Eco-tourism, with a calculated value of around $270 billion, would also take a big hit.

Oliver Wyman’s report estimates that Saudi Arabia’s coastal Red Sea tourism projects have the potential to contribute about $1.2 billion to annual GDP – but only if that environment is adequately protected.

In a previous report, Egypt was highlighted as a rising star in eco-tourism among MENA countries. The country’s many Red Sea resorts and other natural and historical attractions are helping Egypt lead the way in sustainable tourism with a number of novel initiatives, like green vacation towns and religious tours.