The UAE will soon start its first carbon-credit exchange and is taking a tougher stance on ESG disclosure, as it looks to achieve carbon neutrality by 2050 and prepares to host next year’s COP28 climate summit.
The UAE has pledged to be net-zero within its own borders by 2050. The government is planning about $165bn of investments in clean energy to reach the target.
Following the launch of the UAE Net Zero by 2050 Strategic Initiative in October 2021 at Expo 2020 Dubai, the country founded the UAE Council for Climate Action, headed by the Minister of Climate Change and Environment and comprising representatives of 23 public and private sector entities, to serve as an umbrella for nationwide climate action.
The UAE also formed the National Committee for the Development of the National Strategy for Net Zero by 2050, tasked with working on the long-term net-zero strategy. It comprises two phases, the first phase, completed in September 2022, defined the National Net Zero by 2050 Pathway.
This stage included benchmarking to identify best practices in the field in similar and developed countries, establishing an emission baseline, assessing the impact of existing national strategies (energy, water, demand management, waste, industry) on emission reduction until 2050, developing a model for estimating greenhouse gas (GHG) emissions and conducting modeling exercises, compiling a list of priority mitigation measures, and formulating scenarios for achieving net zero.
It entails an accelerated implementation of economically viable mitigation measures with a focus on promoting a green economy and driving a shift to green industrial development, which enhances exports and protects key established industries (aluminum, steel, cement, and oil and gas).
The measures also include expanding nature-based and industrial carbon capture, utilization, and storage (CCUS) systems with a focus on direct air capture (DAC) technologies and ocean-based solutions, in addition to supporting climate-smart transport.
The pathway is projected to boost the national GDP by 1.8 to 3.2 percent by 2050, amounting to a total increase between AED610 billion and AED1,080 billion, compared to 2019. It will also create and sustain an average of 200,000 jobs annually.
On the other side of the equation, the pathway will contribute to a significant improvement in air quality due to a reduction in pollution resulting from industry, energy, and transportation. This will have a positive impact on public health and strengthen the competitive advantage of the country’s low-carbon exports.
The National Net Zero by 2050 Pathway will enhance transparency and increase the UAE’s chances of success in achieving the national target of limiting global warming within 1.5-2°C in line with the Paris Agreement.
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