The first-ever Middle East and North Africa Climate Week (MENACW 2022), taking place in Dubai from 28-31 March, couldn’t come at a more important time for our region. It’s becoming clearer by the day that a paradigm shift in our relationship with nature is required to “build back better” in the wake of the Covid-19 pandemic.
More than ever, we need to move towards sustainability and a green economy, where our economic welfare goes hand in hand with social and environmental resilience and stability.
The latest report from the Intergovernmental Panel on Climate Change (IPCC) warns of the grave pressures which threaten “a liveable future” for humanity. The Gulf region is particularly vulnerable to the unavoidable multiple climate hazards such as warmer weather, less precipitation, droughts, storms and rising sea levels – all of which can affect human well-being.
Climate change is also known to weaken the resilience of marine ecosystems, and this is a significant consideration for the UAE. As well as its place in the heart of the UAE’s rich cultural heritage, a healthy sea provides a foundation for various economic sectors including fisheries, shipping, tourism and recreation.
In the context of the ocean-based and maritime sectors, maintaining a healthy marine environment depends not only on government policies, but on the actions of players in the economic sectors that impact it the most. And the UAE finance community has a vital role to play in making this happen, along with a real opportunity to take the lead in driving innovation for mobilising private capital towards climate – and nature – positive investments.
There’s a growing realisation that so-called ‘Nature-based solutions’ (NbS) are fundamental to achieving so many of the environmental and societal challenges we face. When it comes to climate change, research suggests that, globally, NbS could provide around 30 percent of the mitigation needed by 2030 to stabilise warming below 2°C.
So what can the finance community do? As the International Development Finance Club – which gathers 26 national and regional development banks from all over the world – has recently stated in a position paper, there’s a need for a massive increase in capital to unlock the potential of nature going forwards, to support the mainstreaming of NbS.
Moreover, last February, a coalition of businesses, NGOs and government representatives was formed during the One Ocean Summit with the aim of unlocking more private investment in marine and coastal projects as interest in NbS grows, with a specific target of $500 million by 2030. Participating in the initiative are AXA, Bank of America, Willis Towers Watson (WTW), Palladium and WWF. The initiative has already achieved significant sustainability gains, and has illustrated that the valuable benefits of NbS can be structured to generate revenue, thus offering potential investment returns.
The World Economic Forum has calculated that more than half the world’s GDP depends on nature – while less than 0.2 percent goes back into preserving the ecosystems that generate it, most of it from public and philanthropic sources. This isn’t sustainable. According to the UN, if the world is to meet its climate, biodiversity and land degradation targets, we’ll need to close a funding gap of $4.1 trillion by 2050. This means tripling the money going into NbS by 2030, and the private sector stepping up to play a full role.
In the UAE, where the economic boom and growing population mean energy, water and natural resources must be wisely managed, marine-based NbS projects offer society many potential co-benefits, from economic diversification to increase responsible ecotourism revenues and recreation opportunities, to support fisheries and food security and enhance strong coastal defences.
Crucially, in contrast to traditional conservation funding, certain NbS models – often including blended private and public finance – can offer funders genuine opportunities for returns, achieving environmental, philanthropic and commercial goals alike.
MENACW 2022 offers an unmissable opportunity for the Gulf’s financial sector to be at the front and centre of the collective response to climate change, finding and taking opportunities to ensure a prosperous and resilient future for the UAE.
Financial professionals and climate action supporters can join us for a special side event as part of MENA Climate Week (28-31 March) on bankable NbS for the Gulf region, run by Emirates Nature-WWF and HSBC on March 31st, 2022, 11:30-12:30 UAE time.