BrazilInvesting in green energy projects could double GDP growth of Gulf
The GDP of the Gulf countries could increase by more than double by 2050 if the oil-rich countries move to embrace a green growth strategy. The Gulf economies, projected to reach $6 trillion by 2050, could actually reach $13 trillion with the right investment in renewable energy sources.
Some of the countries of the Gulf Cooperation Council (GCC) have already began to invest significantly in sustainability projects, with an eye towards future-proofing their economies as they move away from historical over-reliance on fossil fuels. That is according to a report from consulting firm Century International, which analyzes the investment landscape in the region.
For example, the United Arab Emirates is putting $40 billion towards clean energy and hoping to invest an additional $164 billion in the future.
One of the UAE’s main areas of focus is hydrogen fuel, sometimes referred to as the ‘fuel of the future’, with green hydrogen contributing essentially zero emissions.
Further reading: Clean hydrogen needs $9 trillion investment to meet net zero by 2050.
“The UAE stands as an exemplar of economic resilience and financial innovation in the Middle East. With its diversified economy and burgeoning financial sector, the UAE is poised for a future brimming with opportunities. Sustainability has evolved from a mere buzzword into a critical business imperative,” said Bal Krishen chairman and chief executive of Century Financial.
Saudi Arabia, for its part, has not invested as much in renewable energy, although the Kingdom is splashing out huge amounts of investments into green mega projects, such as Neom, a new $500 billion mega-city that is to be powered by renewable energy. The project promises to be a futuristic green city.
Though foreign direct investment (FDI) in the GCC region has declined slightly in the past two years, it is overall up, having doubled in six years from $15.5 billion in 2017 to $37.1 billion last year. Over 61% of total FDI inflow into the region went to the UAE, largely seen as the leader in development in the region.
“GCC countries can emerge with stronger, more sustainable economies that generate rewarding jobs for their youth while simultaneously protecting the planet,” said Issam Abou Sleiman, regional director of the World Bank for the MENA region.
In order to achieve this serious boost in GDP from sustainable development, GCC countries need to expedite their transition away from fossil fuels, according to the report. That would include steps like developing cohesive regulatory frameworks and investing more in research and development in relation to innovations in sustainability.
