1 00:00:05,630 --> 00:00:11,030 Good evening. Welcome to our Friday lecture series at the Middle East Centre. 2 00:00:11,030 --> 00:00:15,170 The theme this term is Environment. My name is Walter Armbrister. 3 00:00:15,170 --> 00:00:20,780 I'm one of the founders of the Middle East Centre, and our speaker this evening is Dr. Manal Shehab. 4 00:00:20,780 --> 00:00:25,220 She is an applied economist with expertise and economic energy resource, 5 00:00:25,220 --> 00:00:31,880 sustainability and policy making and resource dependent economies focussing on the Middle East and the Gulf regions. 6 00:00:31,880 --> 00:00:36,320 Her work involves economy-wide modelling and political economy, 7 00:00:36,320 --> 00:00:44,840 and she uses these methods to contribute to scholarship on economic and energy diversification and policy alternatives and gulf hydrocarbon economies. 8 00:00:44,840 --> 00:00:49,100 Following the energy transition and oil price volatility, 9 00:00:49,100 --> 00:00:54,380 Dr. Shaabi is a frequent presence in media as a commentator or discussant on Gulf energy issues. 10 00:00:54,380 --> 00:01:02,570 She's been on Sky News, Arabic, Al-Arabiya TV, the Australian Broadcasting Corporation, Radio Oman and numerous podcasts, 11 00:01:02,570 --> 00:01:09,700 and she's also been interviewed and cited in Time Magazine, Al Jazeera, Al-Akhbar newspaper and web. 12 00:01:09,700 --> 00:01:17,350 She's a senior research fellow at the Oxford Institute for Energy Studies and currently also an academic visitor at St. Anthony's, 13 00:01:17,350 --> 00:01:23,380 a status which dramatically understates her lively presence at our events over the past few years. 14 00:01:23,380 --> 00:01:30,350 A level of participation that I must say, goes far beyond the economies in energy politics, the Gulf states. 15 00:01:30,350 --> 00:01:32,060 In her most recent academic writing, 16 00:01:32,060 --> 00:01:41,450 Dr. Shabby has addressed such topics as the long term impact of COVID on the economies of oil producing states and in forthcoming articles, 17 00:01:41,450 --> 00:01:48,440 the potential impact of hydrogen production in the Gulf, including both blue hydrogen and green hydrogen. 18 00:01:48,440 --> 00:01:51,140 And I'll leave it to her to explain the difference between them. 19 00:01:51,140 --> 00:01:58,490 I gather there's also grey, pink and yellow hydrogen, and I mentioned hydrogen because it's a good segue Segway to tonight's lecture, 20 00:01:58,490 --> 00:02:04,580 which examines both energy diversification in the Gulf and the state of the environment the region. 21 00:02:04,580 --> 00:02:10,190 I should also mention that she is going to be going to the COP26 conference next week, 22 00:02:10,190 --> 00:02:18,140 so she is on the ground floor on the ground, zero of environmental issues of our times. 23 00:02:18,140 --> 00:02:25,430 The title of her lecture is environment, discounted energy and economic diversification plans in the Gulf. 24 00:02:25,430 --> 00:02:33,980 And I should mention that as usual, you should use the Q&A function of Zoom to send us questions. 25 00:02:33,980 --> 00:02:38,720 If you asked to remain anonymous, then we won't reveal your name. 26 00:02:38,720 --> 00:02:43,700 Otherwise, we'll reveal the names of the speakers as we ask the questions. 27 00:02:43,700 --> 00:02:47,150 So without further ado, I will turn it over to Dr Monalisa. 28 00:02:47,150 --> 00:02:50,720 Happy many thanks for this very kind introduction, 29 00:02:50,720 --> 00:02:57,230 and I'm delighted to be here with you today and also very happy that the theme of the webinar series 30 00:02:57,230 --> 00:03:03,320 this term is on the environment so that it won't be discounted as kind of the title of my presentation, 31 00:03:03,320 --> 00:03:14,210 and I'm going to go ahead and share my screen with everyone now. So before today's talk is Professor Walter had said in the introduction. 32 00:03:14,210 --> 00:03:22,610 The title is environment, discounted energy and economic diversification plans in the Gulf and I in this talk, 33 00:03:22,610 --> 00:03:30,050 it's based on a paper that I'm working on at the moment. But a lot of the background is also really the culmination of research that I've 34 00:03:30,050 --> 00:03:35,550 been involved in for years now as part of this larger project on sustainability, 35 00:03:35,550 --> 00:03:40,610 both energy and economic and resources, and in hydrocarbon economies in the Gulf. 36 00:03:40,610 --> 00:03:48,290 And I think I should probably say that it was really compelling, and I chose the date today to speak. 37 00:03:48,290 --> 00:03:54,260 It was without I was completely not paying attention to the fact that COP will be taking place this week. 38 00:03:54,260 --> 00:03:58,460 So the timing is completely serendipitous here today. 39 00:03:58,460 --> 00:04:05,720 And with the country's going a little bit of the scope of what today's talk will be when we think Gulf states, 40 00:04:05,720 --> 00:04:15,800 everybody thinks oil and gas exporters, which is true. But for purposes of my talk today, I want to exclude Iraq and Iran because for obvious reasons, 41 00:04:15,800 --> 00:04:21,260 Iraq has had political instability lately, which directly affects its economy in Iran. 42 00:04:21,260 --> 00:04:26,660 Of course, it sanctions so very heavy emphasis or impact of exaggerates variables. 43 00:04:26,660 --> 00:04:32,990 So I'm shooting them for purposes of this talk, and I'm focussing mostly on countries that are members of the Gulf Cooperation Council, 44 00:04:32,990 --> 00:04:38,270 Bahrain, Kuwait, Oman, Saudi Arabia and the UAE. 45 00:04:38,270 --> 00:04:48,200 And it's just for everyone's kind of, I think, a reference point to think of how relevant these countries are. 46 00:04:48,200 --> 00:04:52,070 Aside from them being, you know, large oil and gas producers and consumers, 47 00:04:52,070 --> 00:04:57,710 they're also have one percent of the world population but produce significant portion twenty 48 00:04:57,710 --> 00:05:04,100 five percent of global oil exports and or global production and 11 percent of natural gas. 49 00:05:04,100 --> 00:05:11,570 And they also have very large potential for producing renewable energy would also be leaving. 50 00:05:11,570 --> 00:05:21,560 And I guess true to that. I also want to give you a bit, but basically what my talk today, the point going off will be. 51 00:05:21,560 --> 00:05:29,900 So in if we look at the transitioning away from fossil fuels, that's been kind of sweeping a lot of economies in the world. 52 00:05:29,900 --> 00:05:35,180 The main point of that, or the drive of that have been has been protecting the environment, 53 00:05:35,180 --> 00:05:40,490 reducing climate change and mitigating the effects of global warming on the climate. 54 00:05:40,490 --> 00:05:45,680 But I'm arguing today that actually this is different in the Gulf. 55 00:05:45,680 --> 00:05:53,630 Specifically, if you look at the role of the environment and energy and economic development plans and the Gulf, 56 00:05:53,630 --> 00:05:57,030 both in terms of the visions, but also the recent climate commitments. 57 00:05:57,030 --> 00:06:03,500 I'm arguing that the role of environment has been limited because it has not been unlike other countries. 58 00:06:03,500 --> 00:06:06,290 It hasn't been the main motivator for the change, 59 00:06:06,290 --> 00:06:14,510 but rather as a motivator has been really more protecting energy exports and also protecting a leading role in the global market, 60 00:06:14,510 --> 00:06:19,070 global energy market and global economy in general. Having said that, though, 61 00:06:19,070 --> 00:06:24,500 and despite numerous improvements on the environment front and the Gulf states and really 62 00:06:24,500 --> 00:06:29,850 maximising economic and energy sustainability requires putting the environment as a centre. 63 00:06:29,850 --> 00:06:34,020 A point in making. So this is pretty much the point of my talk. 64 00:06:34,020 --> 00:06:36,810 And I wanted to give this to you ahead. 65 00:06:36,810 --> 00:06:44,070 Before I go because I want to take you to give you a bit of the background, but also the evidence of the arguments that I'm making. 66 00:06:44,070 --> 00:06:47,370 I want to take you through a bit of a journey, so to speak with me, 67 00:06:47,370 --> 00:06:53,730 on recovering a bit of the background for the energy and economic diversification of the Gulf and where the environment stands. 68 00:06:53,730 --> 00:07:01,410 Then I'll delve into a little bit on the visions that can make development plans more recent development, particularly on the climate. 69 00:07:01,410 --> 00:07:05,910 And then I'll conclude with how the environment has been discounted. 70 00:07:05,910 --> 00:07:10,500 And I also must say that we have obviously four time limitations. 71 00:07:10,500 --> 00:07:13,650 I will not be this will not be conclusive. 72 00:07:13,650 --> 00:07:22,710 There will be I'll be picking examples and I apologise in advance of a country that one someone is interested in might not be discussed in detail, 73 00:07:22,710 --> 00:07:34,860 but I'm more than happy to take it in a Q&A. OK, so let me just give you a bit of a background on the need for economic and energy diversification. 74 00:07:34,860 --> 00:07:41,250 So I've mentioned that oil and gas, and I think this is probably very well known to everyone. 75 00:07:41,250 --> 00:07:49,620 We're dependence on oil states for over dependence on hydrocarbons, for oil and gas and what I mean by over in ways to refine that. 76 00:07:49,620 --> 00:07:56,700 Because look, as a percentage of natural resources, we tend on average to be higher than the rest of the world, 77 00:07:56,700 --> 00:08:02,940 including other states that export oil and gas, such as Russia. 78 00:08:02,940 --> 00:08:08,590 And I'm going to go ahead and just use a laser pointer here of this line here in purple, for example. 79 00:08:08,590 --> 00:08:14,850 And then you have Libya and Iraq in yellow Iran, while, for example, Russia and even Venezuela, 80 00:08:14,850 --> 00:08:19,980 which are both hydrocarbon exporters, tend to have lower share of GDP. 81 00:08:19,980 --> 00:08:32,580 And in a sense, that being part of GDP or what I show here in the slide as part of your ad for the presence of hydrocarbons is not just in GDP, 82 00:08:32,580 --> 00:08:39,930 but really its share of exports. So these states tend to have over 80 percent of their exports coming from exports, oil or gas. 83 00:08:39,930 --> 00:08:50,970 They're also the main aren't the government revenue. And even, for example, in, for example, we only have 42 percent of its GDP coming from oil. 84 00:08:50,970 --> 00:08:56,800 The 85 to 90 percent of exports and government revenue come from hydrocarbon sectors. 85 00:08:56,800 --> 00:09:04,380 So what that means is there is a huge reliance of the economy on oil, of course, or oil and gas. 86 00:09:04,380 --> 00:09:11,760 Also all of really shifts with oil and gas movements, our own gas movements and performances on gas industry. 87 00:09:11,760 --> 00:09:21,930 And for example, here are some examples from Kuwait and Arabia if you look at the red line here with the difference in price, 88 00:09:21,930 --> 00:09:27,990 while the PDP and the Green Line with the blue lines of production pretty much moved 89 00:09:27,990 --> 00:09:32,580 consistently with oil price on the same look at net foreign assets from Saudi Arabia, 90 00:09:32,580 --> 00:09:42,490 but also we do other economic indicators. One of the people in this is that the fact oil and gas are obviously very volatile, they move quite a lot. 91 00:09:42,490 --> 00:09:54,250 And what that means is that the economy becomes exposed to boom and bust very quickly and obviously isn't new, but it became really problematic. 92 00:09:54,250 --> 00:10:05,050 And I guess for all states, particularly in 2014 mid-2014, when the oil price collapsed from over 130 or so by, you know, 93 00:10:05,050 --> 00:10:12,850 in, for instance, it was thirty dollars per barrel and all of a sudden kind of created or increased the urgency, 94 00:10:12,850 --> 00:10:22,270 really for Gulf states to think about role of oil and gas and the economy and to really advance at least verbally advanced projects 95 00:10:22,270 --> 00:10:30,220 for diversifying their economy so that they're less reliant on exports of oil and gas and less reliance on this volatile source, 96 00:10:30,220 --> 00:10:32,230 which makes their economies very volatile. 97 00:10:32,230 --> 00:10:38,920 And another incident where it was also very volatile was last year after the period of when prices also collapsed. 98 00:10:38,920 --> 00:10:47,950 And the grey line here is the volatility index is quite high now as a response to this, even though, as I mentioned, overdependence is not new. 99 00:10:47,950 --> 00:10:51,430 It really was after the oil price collapse in 2014. 100 00:10:51,430 --> 00:11:02,770 Excuse me that our is more of a significant policy shift took place in the Gulf, one of which included reducing or reforming energy subsidies. 101 00:11:02,770 --> 00:11:08,600 Prior to that were some of the highest in the world. See, for example, Iran and Kuwait. 102 00:11:08,600 --> 00:11:14,380 They had some of the highest subsidisation rates of energy domestically. 103 00:11:14,380 --> 00:11:22,030 And this obviously was with reforms at various levels of success after between 2015 and 2016. 104 00:11:22,030 --> 00:11:32,170 But then on the note, there were also policy response was to really advance these economic and development plans in the form of innovation. 105 00:11:32,170 --> 00:11:38,200 I should say these are not new. Like many states, Gulf states have also had five or 10 year development plans, 106 00:11:38,200 --> 00:11:47,350 and different visions of change that happen after 2014 was really quite significant because the new visions would put you 107 00:11:47,350 --> 00:11:54,700 give you really an idea of what the country would look like at a certain point in the future 20 30 to 20 40 years away. 108 00:11:54,700 --> 00:12:04,630 It really represented kind of like a transformation of the economy away from oil and gas into economies that have more diversified sectors, 109 00:12:04,630 --> 00:12:11,950 economies that have high renewables, but also the role of the private sector. 110 00:12:11,950 --> 00:12:22,720 And employment is higher and R&D or higher. So it's really almost like a complete change from the previous economic structure. 111 00:12:22,720 --> 00:12:26,860 And even in the case of Kuwait, for example, they even call it New Kuwait thirty five. 112 00:12:26,860 --> 00:12:36,130 So that gives you an idea of the strength or the emphasis on transformation transforming the economy in those visions. 113 00:12:36,130 --> 00:12:41,110 And this will be one of the things that I'll discuss briefly in a few minutes. 114 00:12:41,110 --> 00:12:46,300 Now, why does this sense or this urgency for economic diversification persist? 115 00:12:46,300 --> 00:12:52,570 So is the problem of flux of oil price, which had significant fiscal implications? 116 00:12:52,570 --> 00:12:59,920 And then there's also another important kind of energy energy conviction that basically means global effort or 117 00:12:59,920 --> 00:13:07,660 attempt to consume less fossil fuels and hydrocarbons and go towards more clean energy sources such as hydrogen, 118 00:13:07,660 --> 00:13:10,450 which is mentioned in the beginning, but also renewables, et cetera. 119 00:13:10,450 --> 00:13:19,510 And there are different estimates of what size of or what demand really will be for different energy sources in the future. 120 00:13:19,510 --> 00:13:27,580 Estimates do suggest more conservative, but also more optimistic suggests that oil and gas man will be significantly lower, 121 00:13:27,580 --> 00:13:33,430 including information from the IEA and the World Energy Outlook last year, as well as this year, 122 00:13:33,430 --> 00:13:41,500 all suggesting that there is a movement away from fossil fuels toward clean energy and alternative. 123 00:13:41,500 --> 00:13:49,360 This basically means big effect on the main source or the main engine of Gulf economies. 124 00:13:49,360 --> 00:13:51,800 This has been used as the main challenge, 125 00:13:51,800 --> 00:13:59,200 but there's other main challenges that I think are also really stressing the availability of oil and gas exports, 126 00:13:59,200 --> 00:14:09,670 one of which is the fact that domestic consumption of oil and gas is also rising at a rate that is significantly higher than the growth in production, 127 00:14:09,670 --> 00:14:17,740 which is, you see the growth in Oregon, as well as the growth in domestic energy. 128 00:14:17,740 --> 00:14:24,040 And so that means that less availability of hydrocarbon resources for export, 129 00:14:24,040 --> 00:14:30,400 but no third element also is the fact that we just don't know oil prices in the future. 130 00:14:30,400 --> 00:14:35,420 And states are well for state, which means they have very generous. 131 00:14:35,420 --> 00:14:45,820 Welfare distributive measures by way of subsidies and other assistance, and very few here are also very high. 132 00:14:45,820 --> 00:14:51,110 A public sector that employs a lot of the citizens and has a very big public wage bill, then. 133 00:14:51,110 --> 00:14:58,640 So what that means is these states require high price of oil just to balance the budget and the the oil. 134 00:14:58,640 --> 00:15:04,310 The expected oil price is expected to be lower than the price required to balance the budget. 135 00:15:04,310 --> 00:15:14,480 So then really, there is a it was me then an urgency to diversify the economy and have other sources of income and the diversification. 136 00:15:14,480 --> 00:15:20,390 If you remember from my early slide, there was existing non oil sector in GDP. 137 00:15:20,390 --> 00:15:26,840 So that's not really the emphasis that these states require. What they require is a diversification of the export source. 138 00:15:26,840 --> 00:15:32,810 So other exports and sources that can generate sufficient revenue that the governments and the budgets 139 00:15:32,810 --> 00:15:38,210 required and part of the reason that I'm sharing the slide here because I think we need to kind of start, 140 00:15:38,210 --> 00:15:45,380 we often we think of just energy transition and the effect of oil price and global on economy, the U.S. economies. 141 00:15:45,380 --> 00:15:53,900 But we need to also consider much of the existing oil and gas sectors is also concerned locally how that affects local energy, 142 00:15:53,900 --> 00:15:57,860 excuse me, portfolio, the effect of that on the environment, 143 00:15:57,860 --> 00:16:06,740 which as well how that goes back to how much oil and gas are available for tax revenue that then funding social 144 00:16:06,740 --> 00:16:15,770 development and labour and even environmental infrastructure or even economic diversification projects. 145 00:16:15,770 --> 00:16:17,310 There is a really direct effect. 146 00:16:17,310 --> 00:16:25,640 We cannot ignore it between what happens domestically for the environment and of course, what happens internationally. 147 00:16:25,640 --> 00:16:29,960 OK, so now this is probably when I Segway to take you a little bit before describing the 148 00:16:29,960 --> 00:16:34,790 discounted role of the environment in the economic and energy development plans. 149 00:16:34,790 --> 00:16:41,500 I just want to give you a very brief idea of the state of the environment in the goal. 150 00:16:41,500 --> 00:16:45,880 And there's a lot of literature on this, this is not anything that I've come up with, 151 00:16:45,880 --> 00:16:54,670 but it kind of helps contextualise the challenges that we're looking at here when it comes to the environment. 152 00:16:54,670 --> 00:17:01,120 Firstly, I assume everyone knows this is the Gulf area, which I'm highlighting here. 153 00:17:01,120 --> 00:17:02,560 But if you look at this graph, 154 00:17:02,560 --> 00:17:11,380 this is about basically how arid landscape the area of the Gulf as other parts of the Middle East region are also quite arid. 155 00:17:11,380 --> 00:17:17,170 And there's obviously a lot of this fortification with that as well. 156 00:17:17,170 --> 00:17:22,900 And this is an environmental challenge to begin with another challenge. 157 00:17:22,900 --> 00:17:29,260 This in itself is not an environmental challenge, but it's based on the high per capita consumption of energy in Gulf states, 158 00:17:29,260 --> 00:17:34,180 either mentioned or extremely abundant and in hydrocarbon resources. 159 00:17:34,180 --> 00:17:38,170 But they also have had historically very generous subsidies, 160 00:17:38,170 --> 00:17:49,090 with water desalination and electricity being provided almost for free and also other sources, I should say. 161 00:17:49,090 --> 00:17:59,920 What that means is these the lighter the colour and the map basically means that higher capital energy or a kilogram of oil equivalent, basically. 162 00:17:59,920 --> 00:18:05,140 And you see that they have some of the highest per capita usage of energy domestically. 163 00:18:05,140 --> 00:18:11,350 And the reason that matters is because it's conservative to some of the highest emissions per capita, 164 00:18:11,350 --> 00:18:18,250 as well as one of the highest emissions level per GDP. And this is data from the World Bank, it says 2014. 165 00:18:18,250 --> 00:18:24,790 But the data varies, unfortunately, when it comes to a lot of developing states, including the Gulf. 166 00:18:24,790 --> 00:18:31,630 Often there is a lag in that variability stuff, but the trends are clear to be the same with Qatar, for example, 167 00:18:31,630 --> 00:18:39,190 being the highest emitter of the mission's carbon CO2 carbon dioxide emissions globally, 168 00:18:39,190 --> 00:18:46,160 which is and then the Gulf states are just as high point here as Bahrain, UAE, Saudi Arabia, ETS. 169 00:18:46,160 --> 00:18:51,980 It's much more than double, for example, far more than double that. 170 00:18:51,980 --> 00:19:00,100 You protect the emissions in the United States. Now also look at rural emissions per country. 171 00:19:00,100 --> 00:19:06,760 I have to say that these Gulf states are not high emitters compared to other states. 172 00:19:06,760 --> 00:19:15,370 You know, the world's largest emitters are China and India and the US, EU, Australia, etc. States are not are. 173 00:19:15,370 --> 00:19:19,270 As I mentioned, they're from the highest per capita emitters. 174 00:19:19,270 --> 00:19:24,250 If we look at our overall, overall national emissions come mostly from things. 175 00:19:24,250 --> 00:19:30,140 If anything, it has nothing to do with advisory firm second. 176 00:19:30,140 --> 00:19:34,270 The second source is a transport system and for anyone had gone the. 177 00:19:34,270 --> 00:19:38,680 You will see multiple car the lifestyles, the kind of supports this, for example, 178 00:19:38,680 --> 00:19:44,200 where you have multiple cars and a household that houses that have air conditioning. 179 00:19:44,200 --> 00:19:56,980 That because obviously, if there's hot climate air conditioning that runs sometimes all the time and and other very subsidise 180 00:19:56,980 --> 00:20:02,620 almost free energy that is consumed during electricity consumed by different sectors as well. 181 00:20:02,620 --> 00:20:08,650 So from the consumer perspective, from the industrial perspective. Energy price and I contributed to high emissions. 182 00:20:08,650 --> 00:20:15,610 But the reason I want to share this with you, because then this gives us an idea of the scope of where emission reductions would be, 183 00:20:15,610 --> 00:20:20,200 which then would be kind of what the target, so to speak, 184 00:20:20,200 --> 00:20:26,560 in the energy diversification and economic diversification plans that would also be pro-environment. 185 00:20:26,560 --> 00:20:34,310 And I'm not going to go into this next graph here, but this is an example of the challenge of greenhouse gas emissions from coal, 186 00:20:34,310 --> 00:20:41,990 and they're not by accident, but know methane and other emissions as well. 187 00:20:41,990 --> 00:20:47,860 So there's levels of detail at that level for the different countries now, because as I mentioned, 188 00:20:47,860 --> 00:20:52,210 there's been high consumption and high emissions that also contributed to high pollution. 189 00:20:52,210 --> 00:21:01,570 And that also contributes to global low air quality compared with the rest of the world and the data from the World Health Organisation, 190 00:21:01,570 --> 00:21:13,210 where the darkest has basically a level of pollution and PM2.5 concentrations of pollutants that are some of the highest in the world, 191 00:21:13,210 --> 00:21:17,080 significantly higher than the World Health Organisation's guidelines. 192 00:21:17,080 --> 00:21:25,030 So this clearly would be an environmental concern, but also, of course, it's a health concern, 193 00:21:25,030 --> 00:21:32,620 and it also matters when it comes to productivity and it has an economic cost as well. 194 00:21:32,620 --> 00:21:39,190 I can't talk about the Middle East without talking about water because water is the drink. 195 00:21:39,190 --> 00:21:43,180 You see, the Gulf states are significantly challenged when it comes to fresh water. 196 00:21:43,180 --> 00:21:44,920 There's a huge shortage. 197 00:21:44,920 --> 00:21:53,560 A lot of the water that comes from desalination, the sea water, and they have some of the world's largest desalination programmes. 198 00:21:53,560 --> 00:21:58,390 But at the same time, they have some of the most unique soil and marine environments. 199 00:21:58,390 --> 00:22:01,900 And part of the problem with this is that they increases the climate change. 200 00:22:01,900 --> 00:22:07,450 An increase of a global temperature also affects the second acidity of the water. 201 00:22:07,450 --> 00:22:15,820 It affects the ecosystems. It affects the quality of the coastal and marine environment. 202 00:22:15,820 --> 00:22:23,790 Also, silent ocean. There's a lot of pumping of extra chemicals sometimes, as well as saline solutions back into the water, which also affects it. 203 00:22:23,790 --> 00:22:33,190 So the this has a significant really future term environmental Helen. 204 00:22:33,190 --> 00:22:42,190 And this matters. The environment matters because for multiple reasons, the MENA region is one of the most vulnerable to climate change. 205 00:22:42,190 --> 00:22:51,130 Also, the rise in temperature means that we will over time require more energy inputs for the same amount of demand that we have. 206 00:22:51,130 --> 00:23:00,160 So that means lower energy efficiency. But also there's increasing demand purely because the populations are growing with that. 207 00:23:00,160 --> 00:23:07,660 And that will in turn means increase demand and pressure on the water resources and the other different resources that are available. 208 00:23:07,660 --> 00:23:15,100 It's also not just for desalination, which is expected to go by fourth in full, but also the cooling requirements. 209 00:23:15,100 --> 00:23:17,080 It also has an economic cost. 210 00:23:17,080 --> 00:23:24,280 I would mention very briefly effects on health and productivity and what that means with rising health costs and fiscal costs, 211 00:23:24,280 --> 00:23:33,070 but it also affects GDP. And just as an example, this is the data from the World Bank that says the expected economic losses from this climate 212 00:23:33,070 --> 00:23:39,090 related water scarcity is between six to 14 percent loss of GDP between now and mid-century. 213 00:23:39,090 --> 00:23:44,650 So if you compound that effect of over the different sources of where the environment is challenged, 214 00:23:44,650 --> 00:23:55,160 we can expect the cost to be very high at various different levels and you can see why the challenge of the environment is really serious. 215 00:23:55,160 --> 00:24:04,790 Now we get to maybe kind of showing you a little bit more of these visions that I mentioned earlier and where or if the environment fits in them. 216 00:24:04,790 --> 00:24:10,520 So I did mention those visions. I must mention them quite briefly. 217 00:24:10,520 --> 00:24:14,450 What I want to mention here in the section, I'm going to go over the visuals in detail. 218 00:24:14,450 --> 00:24:21,740 I'm just gonna give you a brief idea of what language they use and where the war of environments in them. 219 00:24:21,740 --> 00:24:30,740 And I must say that they're aligned with sustainable development goals of the United Nations. 220 00:24:30,740 --> 00:24:38,090 And if you look at the Sustainable Development Goals, of which there are 17 are few that mention the environment for the environment from 16. 221 00:24:38,090 --> 00:24:45,650 The climate's life below water on land, but also in things like sustainable cities as well as clean water as well. 222 00:24:45,650 --> 00:24:53,210 So in goals in the SDGs, environment is featured across multiple goals and vision. 223 00:24:53,210 --> 00:25:03,710 However, the environment comes usually as one element or one killer, and they are most of the guests. 224 00:25:03,710 --> 00:25:11,000 The environmental regulatory framework comes not so much from the visuals, but really from the different ministries that exist, 225 00:25:11,000 --> 00:25:17,810 that concern or have the mandate of taking care of anything environment related. 226 00:25:17,810 --> 00:25:21,080 But here, I just want to give you a couple of examples. 227 00:25:21,080 --> 00:25:35,900 It says on the left hand side, Vision 20, 21, Vision 20, 21 from the UAE, you see the priorities have, for example, 17 safe and fair judiciary, 228 00:25:35,900 --> 00:25:43,880 knowledge, economy, education and health care, and only one over here, which promises sustainable environment infrastructure. 229 00:25:43,880 --> 00:25:53,180 Look at the one on the right there is quiet, and that also has mostly social human development and economic development. 230 00:25:53,180 --> 00:25:58,020 And then the environment and sustainability comes as one killer. 231 00:25:58,020 --> 00:26:05,640 And here's an example of if you look at if we read the text of the visions, there is a bit usually a paragraph or so on the environment. 232 00:26:05,640 --> 00:26:15,720 And here's an example from Vision 2013 from Saudi Arabia, where it says the following says achieving environmental sustainability has a goal, 233 00:26:15,720 --> 00:26:23,060 and they want to do that by preserving our environment and natural resources for environment and natural resources. 234 00:26:23,060 --> 00:26:27,480 Then innovation as part of our responsibility for future generations. 235 00:26:27,480 --> 00:26:38,400 It mentions the of waste management, recycling projects and fighting pollution and sophistication, and that it also talks about water. 236 00:26:38,400 --> 00:26:44,820 And then finally, of course, renewable water basically means taking renewable energy and using that to dissolve into water. 237 00:26:44,820 --> 00:26:53,550 And then the final bit here, which I didn't mention, or it didn't clear in blue or green, which is basically acting as a natural reserve in Ireland. 238 00:26:53,550 --> 00:27:02,030 So it's really a framework, even though it's a bit vague, but there is some element of the environment that is mentioned. 239 00:27:02,030 --> 00:27:08,120 If we really look at the poem and read them one by one, we find that the visions have no reference to climate change, 240 00:27:08,120 --> 00:27:12,920 except for a man that they do not mention reducing carbon footprint. 241 00:27:12,920 --> 00:27:18,360 There's very limited references to pollution, and the example from Saudi Arabia that I mentioned is one. 242 00:27:18,360 --> 00:27:22,670 Also, they're really more frames in times of even the environment. 243 00:27:22,670 --> 00:27:29,240 It's more framed in terms of how it shoots and supports the national economy and supporting and or alleviating. 244 00:27:29,240 --> 00:27:33,350 I could say it's social and economic concern. 245 00:27:33,350 --> 00:27:41,030 And then there's also emphasis, which I believe is really the main driver in a lot of the projects that have followed these vision. 246 00:27:41,030 --> 00:27:48,650 Is this big emphasis on really having great economies, great economies, not just in oil and gas anymore, 247 00:27:48,650 --> 00:27:55,280 but also being gateways for trade, finance, tourism and really important links to the rest of the world. 248 00:27:55,280 --> 00:28:02,900 And this positioning is very clear, and I'll show you in a little bit really kind of being positioned as really leaders, 249 00:28:02,900 --> 00:28:12,650 not just regionally but also globally. And that really seems to be the drive of why divisions are are created and why the economic 250 00:28:12,650 --> 00:28:19,280 diversification plans are really what they're trying to achieve and is the one that augments vision, 251 00:28:19,280 --> 00:28:23,420 I should say, is the one that offers the most for the environment. Because of that, 252 00:28:23,420 --> 00:28:30,110 I want to give you examples of how environmental listed in the magnificent and the environment and 253 00:28:30,110 --> 00:28:35,900 natural resources specifically are listed as a national priority of mostly what really matters. 254 00:28:35,900 --> 00:28:43,490 Again, we see the wording of support the domestic economy, the national economy, and there is a balance, of course, 255 00:28:43,490 --> 00:28:49,430 between what the environment needs as well as the local unconstrained comic need is really interesting about this. 256 00:28:49,430 --> 00:28:55,850 Is that enrichment in the last era, the last quick point. 257 00:28:55,850 --> 00:29:05,510 Similarly, the aim is to actually move towards the use of raw materials and manufacturing and goods instead of exporting them, as is. 258 00:29:05,510 --> 00:29:11,780 What that means is instead of exporting natural resources, they want to use them in manufacturing and export the manufacturing. 259 00:29:11,780 --> 00:29:17,510 So again, the use of the raw materials is not being to preserve it, so to speak, and that is preserving the environment, 260 00:29:17,510 --> 00:29:23,960 but really using it for diversification purposes and producing or exporting other goods. 261 00:29:23,960 --> 00:29:30,780 Manufacturing in this case other than oil and gas. Here's another example from the UAE. 262 00:29:30,780 --> 00:29:39,240 The reason I thought it would be good to mention the UAE because the UAE has perhaps been a 263 00:29:39,240 --> 00:29:48,180 leader across the states in trying to preserve the environment and having more carbon friendly. 264 00:29:48,180 --> 00:29:56,030 Let me say projects ahead of or before the other states in this case in the UAE. 265 00:29:56,030 --> 00:30:06,230 Again, there is an importance of correcting the irritation and ensuring the state or the government country is attracting business and investment, 266 00:30:06,230 --> 00:30:11,540 so you can see again, we're looking at what how we as a country look to the outside world. 267 00:30:11,540 --> 00:30:15,260 There is a reference to in the process of nurturing a sustainable environment, 268 00:30:15,260 --> 00:30:22,040 but a lot of this is really linked to family cohesion, values rather than the actual environmental resources. 269 00:30:22,040 --> 00:30:27,950 And then there's also a lot of linked with preserving the natural environment for national initiatives. 270 00:30:27,950 --> 00:30:36,830 So it is important that the target not necessarily isn't necessarily protecting the domestic resources to the point that they should be. 271 00:30:36,830 --> 00:30:47,000 But really, how do we just make natural? Sorry. How do any international initiatives and kind of appear to be conscientious from a global perspective? 272 00:30:47,000 --> 00:30:53,080 So this is another example from Saudi Arabia and the you? 273 00:30:53,080 --> 00:30:57,010 And here you can see I know it's probably very small, 274 00:30:57,010 --> 00:31:00,670 maybe something I cannot see them amongst the various different targets I did 275 00:31:00,670 --> 00:31:09,190 mention earlier that performance was listed in the foggy vision is to be achieved, 276 00:31:09,190 --> 00:31:19,420 for example, number one. That's why some were twenty five top for trees on the Global Competitiveness Index. 277 00:31:19,420 --> 00:31:23,680 A lot of the language, and this is an example of the language it's written around the visions and 278 00:31:23,680 --> 00:31:29,470 then other projects that have been achieved or after as a result of revisions. 279 00:31:29,470 --> 00:31:36,670 A lot of the language is kind of basically centring around making this achieving a status as one of the largest economies in the world, 280 00:31:36,670 --> 00:31:45,700 one of the most competitive. But it also has things like, you know, increasing competitiveness, localisation of energy management, 281 00:31:45,700 --> 00:31:52,960 expanding the role of the oil and gas industry and even the glowing gas industry also still being an important part. 282 00:31:52,960 --> 00:31:59,770 Which one would understand being an important parts even in this new vision of energy and economic diversification? 283 00:31:59,770 --> 00:32:05,140 And there are limited environmental references, but as I mentioned before, it's mostly waste management and pollution. 284 00:32:05,140 --> 00:32:14,080 But a lot of the projects don't seem to be achieving or targeting a lot of the issues that I mentioned earlier with the environment, 285 00:32:14,080 --> 00:32:22,210 whether they were high emissions, for example, or the issue of water shortages or even pollution. 286 00:32:22,210 --> 00:32:30,100 OK. And again, we see another emphasis again on economic achievement from global near how we rank at a global perspective, 287 00:32:30,100 --> 00:32:40,450 and here is an example for from bottom left hand side from Bahrain, where Bahrain is celebrating the fourth most improved economy. 288 00:32:40,450 --> 00:32:48,910 And with Qatar, an important showing or displaying excellent sustainability at the World Cup in 2022. 289 00:32:48,910 --> 00:32:56,710 And then obviously for Saudi Arabia, there's also examples of Saudi Aramco's strategic transformation programmes and 290 00:32:56,710 --> 00:33:04,130 the idea when basically enlarging its FDI and natural transformative programmes. 291 00:33:04,130 --> 00:33:13,900 So again, we see that keeping this large scale economy or economic achievement is really a driver in the vision. 292 00:33:13,900 --> 00:33:17,380 At the point of this past section was really to kind of show that the role in 293 00:33:17,380 --> 00:33:21,820 the environment of the environment and the visions has been really limited, 294 00:33:21,820 --> 00:33:25,240 even though the environment has features as as a goal. 295 00:33:25,240 --> 00:33:33,160 But it often kind of is just part of a longer vision or idea of a sustainable living without really big 296 00:33:33,160 --> 00:33:41,890 emphasis on improving the quality of the environment and resources that have that that exist in the Gulf. 297 00:33:41,890 --> 00:33:46,100 However, there have been some recent developments that are very positive on the environment front, 298 00:33:46,100 --> 00:33:50,690 and so this is I don't want to come across as I'm, you know, this is doom and gloom. 299 00:33:50,690 --> 00:33:55,060 Not necessarily. But part of the recent developments that I want to show, 300 00:33:55,060 --> 00:34:04,870 because they're really very much important and also in the right direction that I think helps the environment and overall sustainability. 301 00:34:04,870 --> 00:34:09,760 So for example, again, this is not a comprehensive list of examples. 302 00:34:09,760 --> 00:34:18,490 So in the UAE, for example, there's been the substitution with the first zero carbon city in the world, and this is not new. 303 00:34:18,490 --> 00:34:25,390 I think it's from about 2000. And so it's kind of been going on for for some time. 304 00:34:25,390 --> 00:34:37,900 Also in the UAE, there's a nuclear power plant, also an excuse to increase the share of clean electricity in the domestic economy. 305 00:34:37,900 --> 00:34:45,790 Other examples of Saudi Arabia is the new city. Neom is a giga project, a billion dollars project, very massive. 306 00:34:45,790 --> 00:34:52,210 But the idea of just creating a whole city that is pretty much self-sustaining and also very carbon neutral and friendly. 307 00:34:52,210 --> 00:35:00,490 And there have been some projects with the name that have been, for example, hydrogen projects I'll talk about in a little bit. 308 00:35:00,490 --> 00:35:04,090 But a hydrogen project that also is a green hydrogen project. 309 00:35:04,090 --> 00:35:14,500 So producing or creating a new source of energy that is also clean and can be exported importantly, so it hits the economic diversification target. 310 00:35:14,500 --> 00:35:25,060 There's also the green initiative to announce 2021, whereby Saudi Arabia committed to planting could increase in the desert, 311 00:35:25,060 --> 00:35:36,070 and there's about like one percent that's been achieved so far. It also got 40 million or so to this point and also across the Middle East. 312 00:35:36,070 --> 00:35:41,080 Again, very positive point forward in Kuwait. 313 00:35:41,080 --> 00:35:49,990 This might be one of my favourite examples because there has been a very domestic project and aimed at not really exports, 314 00:35:49,990 --> 00:35:56,290 but just really improving the domestic livelihood of transforming a tyre graveyard to a smart city. 315 00:35:56,290 --> 00:36:04,030 And this was this was in the news about a month ago or so with the idea of having over 20000 thousand houses that will be built on the city. 316 00:36:04,030 --> 00:36:11,110 So again, we see and this is obviously very important from the environmental perspective, but also the economic perspective. 317 00:36:11,110 --> 00:36:16,660 Because tires pollute the environment, they're when they're burned, they're really bad for pollution, et cetera. 318 00:36:16,660 --> 00:36:22,360 And also, they just exist there. So what do you do with them unless you transform them to something usable and recyclable? 319 00:36:22,360 --> 00:36:31,120 And then finally, you know, man, there's been initiatives for cleaning enough oil reserves and water and ocean which have date back, 320 00:36:31,120 --> 00:36:36,370 I think, from 2016 onwards as far as I know, but they could have might as well. 321 00:36:36,370 --> 00:36:44,650 It's possible that they've actually started before that. So there's some recent achievements and really good achievements that I exist. 322 00:36:44,650 --> 00:36:48,760 Another achievements as well for mention of the very beginning, the hydrogen stuff. 323 00:36:48,760 --> 00:36:54,250 And I've written quite a bit on this, but I just want to give you an idea of what hydrogen is and how it fits in this. 324 00:36:54,250 --> 00:37:02,740 So hydrogen, as you know, we we it's it's a it's one of the most abundant, actually the most abundant elements on Earth. 325 00:37:02,740 --> 00:37:13,050 But hydrogen has been known to be very useful in energy applications because it can be used as a for for energy. 326 00:37:13,050 --> 00:37:21,900 It solves that aircraft carrier or even a storage medium. And it can be it has various different applications and. 327 00:37:21,900 --> 00:37:29,730 Importantly, because hydrogen and nature exist by itself, it exists with other elements. 328 00:37:29,730 --> 00:37:37,440 For example, it would water. It's a two 000 remember middle school chemistry or with hydrocarbons with the carbon. 329 00:37:37,440 --> 00:37:42,750 Basically, what that means is hydrogen can be separated from different elements that we have. 330 00:37:42,750 --> 00:37:50,850 So that means that we can also use water, for example, to separate the hydrogen from it, using green renewable power. 331 00:37:50,850 --> 00:37:57,760 And if we use that, the renewable power through a process called electrolysis to get a hydrogen that is called green hydrogen. 332 00:37:57,760 --> 00:38:00,480 So this is the cleanest hydrogen, if you will. 333 00:38:00,480 --> 00:38:08,460 But then we can also use hydrocarbons, the oil and gas and that fill of coal and oil and natural gas and hydrogen, 334 00:38:08,460 --> 00:38:14,340 which at the moment probably the most about 90 percent of the world's hybrid this way. 335 00:38:14,340 --> 00:38:16,830 But then that emits a lot of carbon. 336 00:38:16,830 --> 00:38:25,860 If we capture that carbon through ecologies and carbon capture and sequestration and storage, then that becomes blue. 337 00:38:25,860 --> 00:38:31,500 What that means is we can still use hydrocarbons to get a hydrogen, a clean hydrogen, 338 00:38:31,500 --> 00:38:36,390 and we actually have a solution for the carbon because of these properties and 339 00:38:36,390 --> 00:38:41,190 the ability to use hydrogen in local consumption for decarbonisation purposes, 340 00:38:41,190 --> 00:38:52,680 but also for exports. Hydrogen has become really an important as kind of been looked at as the golden solution, so to speak, 341 00:38:52,680 --> 00:39:03,180 for future energy needs that meets the world's needs for clean energy, but also energy in general because the batch in 2020. 342 00:39:03,180 --> 00:39:11,370 Last year, there was about 20 countries in the world that have had either established hydrogen projects or established 343 00:39:11,370 --> 00:39:18,210 hydrogen strategies of how to develop markets and export them or use the hydrogen and domestic industries. 344 00:39:18,210 --> 00:39:23,700 Gulf countries have been really lagging behind, but we see them starting to catch up. 345 00:39:23,700 --> 00:39:34,600 So in Saudi Arabia in 2020, I did mention the large city of Neom with this idea of green hydrogen and the clean hydrogen from renewable energy. 346 00:39:34,600 --> 00:39:41,160 Also, importantly, there was a blue ammonia cargo that with Japan, 347 00:39:41,160 --> 00:39:46,590 ammonia also carries nitrogen and hydrogen so that ammonia can be then shipped to Japan. 348 00:39:46,590 --> 00:39:51,360 And it's Japan separated what we call cracks to separate the hydrogen from it. 349 00:39:51,360 --> 00:40:03,120 So here is an example again, where this opportunity is being used for the export market and not decarbonising the domestic system. 350 00:40:03,120 --> 00:40:07,680 And then also, Kuwait and Saudi Arabia did adopt a hydrogen strategy in the beginning of this. 351 00:40:07,680 --> 00:40:10,400 No, not beginning about in about a few months ago. 352 00:40:10,400 --> 00:40:20,970 And by August of this year, the UAE also has had some of the largest energy projects across the region, 353 00:40:20,970 --> 00:40:28,440 but also it included the region's first industrial scale green hydrogen project that was also announced in twenty twenty one. 354 00:40:28,440 --> 00:40:34,860 Oman also has a hydrogen economy strategy, as well as project to advance the hydrogen again. 355 00:40:34,860 --> 00:40:39,990 A green hydrogen project with the idea of most of these will be targeting the export market. 356 00:40:39,990 --> 00:40:44,430 And then finally, in Kuwait, there has been a white paper towards a national hydrogen strategy, 357 00:40:44,430 --> 00:40:48,330 but without actual products announced or a strategy put forth. 358 00:40:48,330 --> 00:40:56,940 But again, what what this shows is the the Gulf states are really catching up to kind of not 359 00:40:56,940 --> 00:41:01,770 just do what was in the visions of having financial centres and tourist centres, 360 00:41:01,770 --> 00:41:05,340 et cetera, in their economic diversification plan. 361 00:41:05,340 --> 00:41:15,060 But really looking at how do we join the energy transition process and use a diversification of energy as also a source of economic diversification, 362 00:41:15,060 --> 00:41:17,910 which from an economic perspective makes a lot of sense, of course. 363 00:41:17,910 --> 00:41:25,060 But the role of that in the domestic environment remains to be very little at the moment. 364 00:41:25,060 --> 00:41:34,720 And we the rest on a remarkable change that has happened related to the environment in the Gulf states as the recent 365 00:41:34,720 --> 00:41:42,970 historic announcements of net zero emissions commitments by the UAE to achieve that to achieve net zero emissions by 2050, 366 00:41:42,970 --> 00:41:47,250 followed by Saudi Arabia in 2016, Bahrain and twenty six. 367 00:41:47,250 --> 00:41:55,750 Now, of course, there is a cop going on and I'll be joining them tomorrow, as you have heard. 368 00:41:55,750 --> 00:42:06,490 But with that with the cop, this like all states, this is not just the Gulf states have had to submit new commitments, so to speak to the UNFCCC. 369 00:42:06,490 --> 00:42:13,450 So with new intended nationally determined contributions and in them committing to what they believe they will. 370 00:42:13,450 --> 00:42:16,810 How much they will reduce their emissions by. 371 00:42:16,810 --> 00:42:26,440 And what's interesting in the new indices submission is that the emphasis there is still on the role of hydrocarbons that still exist 372 00:42:26,440 --> 00:42:36,100 as an important role in the in in the economy and focussing on diversifying the domestic economy as a way to reduce emissions, 373 00:42:36,100 --> 00:42:43,960 as well as using carbon capture mechanisms as well. So really, I think, needs to be more details on how that will happen. 374 00:42:43,960 --> 00:42:52,990 But it sounds that there isn't this idea that is presented as having completely transformative or completely new projects to save the environment, 375 00:42:52,990 --> 00:43:01,030 so to speak, but more on kind of just addressing emissions and diversification. 376 00:43:01,030 --> 00:43:12,310 Another important element to this whole carbon emissions story is the circular carbon economy, and this is not a new idea at all. 377 00:43:12,310 --> 00:43:25,540 But I'm mentioning it in a separate slide because in Saudi Arabia's announcement of reducing emissions by or achieving carbon neutrality by 2060, 378 00:43:25,540 --> 00:43:29,800 a big part of the way that they will achieve that will rely on circular carbon economy. 379 00:43:29,800 --> 00:43:37,570 And what that means is basically ways to be able to continue to use fossil fuels and other methods that emit carbon. 380 00:43:37,570 --> 00:43:41,500 But then finding technologies that can capture that carbon that is emitted 381 00:43:41,500 --> 00:43:46,390 and then either finding different uses for it or storing it in an oil wells, 382 00:43:46,390 --> 00:43:56,420 for example, or using it for other purposes. And the thing about this this was adopted also with the G20 that was held in Saudi Arabia last year. 383 00:43:56,420 --> 00:44:03,430 And the thing about this is that it offers a kind of a flexible approach of handling 384 00:44:03,430 --> 00:44:08,380 or for different countries to really target and have a solution for super carbon. 385 00:44:08,380 --> 00:44:15,160 There also, as you said, that the green list to and I've mentioned the the his quote here, 386 00:44:15,160 --> 00:44:22,760 there's still an emphasis on not going away from fossil fuels, but continuing to use fossil fuels in the picture. 387 00:44:22,760 --> 00:44:24,560 We're going to conclude now, 388 00:44:24,560 --> 00:44:32,180 so I just want to give you an idea of even though I have now shown you how the environment has had a limited role in the vision. 389 00:44:32,180 --> 00:44:41,750 And even though we have had now very recently more pro-environment and more pro climate developments on the energy and economic diversification front, 390 00:44:41,750 --> 00:44:46,580 I still believe environment is discounted and I'm going to give you a couple of examples here. 391 00:44:46,580 --> 00:44:54,380 Because remember, environment that I'm talking about here is not just a contribution to the rest of the world in terms of what we export being green, 392 00:44:54,380 --> 00:45:03,770 but also how it affects the domestic environment. And I'll give very briefly a few ideas to make my point as evidence. 393 00:45:03,770 --> 00:45:07,610 The first one is very requirements and harmonisation regulatory frameworks in 394 00:45:07,610 --> 00:45:12,080 these states and across all the states of across the different domains of carbon. 395 00:45:12,080 --> 00:45:17,210 There's either a lack of implicit regulation or lack of regulation altogether. 396 00:45:17,210 --> 00:45:22,920 And sometimes when there is regulation, it can be quite inadequate. 397 00:45:22,920 --> 00:45:28,260 In addition, there is little research and development expenditures on low carbon energy, 398 00:45:28,260 --> 00:45:32,010 and this is important as the driver for the hydrogen economy that I described, 399 00:45:32,010 --> 00:45:38,070 as well as all the circular carbon economy that I also mentioned, which can be a fantastic solution. 400 00:45:38,070 --> 00:45:46,140 They're really driven by improvements in technology, and there was very we're so really behind the technologies, 401 00:45:46,140 --> 00:45:54,450 particularly to make hydrogen to low carbon energy options price competitive with fossil fuels. 402 00:45:54,450 --> 00:46:03,060 The Gulf states have historically and still have very low share of their GDP being spent on R&D development. 403 00:46:03,060 --> 00:46:08,250 And if you compare that to the highest in the world between banks 10 from the US, 404 00:46:08,250 --> 00:46:12,900 ranging from four point three to approximately three percent of GDP in the Gulf, 405 00:46:12,900 --> 00:46:17,580 it hasn't exceeded one percent, except potentially for the UAE in the past couple of years. 406 00:46:17,580 --> 00:46:21,840 And the same when it comes to clean hydrogen technologies. 407 00:46:21,840 --> 00:46:27,900 In addition, the third reason is, even though we have these massive plans, for example, to establish green hydrogen, 408 00:46:27,900 --> 00:46:33,420 which relies on renewables, renewable energy still remains very, very low and the Gulf states. 409 00:46:33,420 --> 00:46:43,140 But there are ambitious plans as part of this vision, relying on hydrogen cities on renewables anywhere from 15 percent in the case of Kuwait, 410 00:46:43,140 --> 00:46:47,640 all the way to about forty five percent in UAE and Saudi, then. 411 00:46:47,640 --> 00:46:55,230 At the moment, we saw about less than three percent on average installed capacity being from renewables. 412 00:46:55,230 --> 00:46:58,200 So there's really slow development. 413 00:46:58,200 --> 00:47:06,330 Another example Another reason is that we saw of a slow progress on a lot of the programmes with these visions are particularly environment driven. 414 00:47:06,330 --> 00:47:10,230 And here's one example, and this is various some patients are maybe ahead of others, 415 00:47:10,230 --> 00:47:16,710 but this is an example from Kuwait looking at the different projects they have for the sustainable living environment. 416 00:47:16,710 --> 00:47:20,190 And you see, when it comes to the air quality and the renewable energy, 417 00:47:20,190 --> 00:47:27,700 they're very much behind in terms of the progress achieved to meet the project completion by the day and driven. 418 00:47:27,700 --> 00:47:33,150 While there's it seems to be when it comes to sewage and waste management, a bit more advancements on that front. 419 00:47:33,150 --> 00:47:36,330 But overall will, so they're still behind schedule. 420 00:47:36,330 --> 00:47:44,100 And that also leads me to this other this other point that environment remains in a state of degradation. 421 00:47:44,100 --> 00:47:53,550 And for example, even though the UAE had lost the city, which was the first carbon neutral city in the world by Sandoz, 422 00:47:53,550 --> 00:47:57,690 one of the as the most polluted city in the world or sorry in the Gulf, 423 00:47:57,690 --> 00:48:07,320 not in the world and the Gulf, but also there are other cities across the different regions across the region Ahmadi, Riyadh or Baghdad. 424 00:48:07,320 --> 00:48:15,030 They're also very polluted cities, and at the moment, even the greenhouse gas emissions remain very high. 425 00:48:15,030 --> 00:48:22,740 I admit that there seems to be improvement in the INTC, the commitments that submitted to the UNFCCC, 426 00:48:22,740 --> 00:48:27,840 but still, there is no real example of how that will affect the environment. 427 00:48:27,840 --> 00:48:34,830 And then finally, I should say another challenge is the fact that there is financial constraints on the 428 00:48:34,830 --> 00:48:40,860 financial constraints means less money that could support projects that help the environment. 429 00:48:40,860 --> 00:48:48,030 I'm going to skip this one and then finally for a final challenge, which is the subsidies, because if you continue to have subsidies, 430 00:48:48,030 --> 00:48:50,460 particularly if you have subsidies for clean energy, 431 00:48:50,460 --> 00:48:58,380 then what that would mean it would reduce the existing part that could be exported, expand the part that is used domestically. 432 00:48:58,380 --> 00:49:06,150 But the cost of that will be obviously fiscal cost. So this will be what we call the distortion from in the economic literature. 433 00:49:06,150 --> 00:49:17,130 And that would also not necessarily achieve the best ideal use of resources that could also maximise the role of or the protection of the environment. 434 00:49:17,130 --> 00:49:22,320 And this is really it's my of the talks. 435 00:49:22,320 --> 00:49:29,850 I in summary, I guess the environment has not been necessarily despite large improvements. 436 00:49:29,850 --> 00:49:35,610 It hasn't been the primary motivator to date in terms of economic and energy diversification. 437 00:49:35,610 --> 00:49:44,490 However, I think it remains an important element that needs to be addressed, particularly if were to maximise energy and economic sustainability. 438 00:49:44,490 --> 00:49:54,090 And I thank you very much for listening to the long fox, and I would very much love to hear your questions and discuss them. 439 00:49:54,090 --> 00:49:58,290 OK, we have my colleague, Michael Willis, has been curating the questions, 440 00:49:58,290 --> 00:50:02,220 so I'm going to turn it over to him to to bring our questions from the audience. 441 00:50:02,220 --> 00:50:08,850 I have a couple of questions of my own, but we do have audience questions, so I think we should give priority to those. 442 00:50:08,850 --> 00:50:13,220 Thank you very much. Well, well done, thank you very much. 443 00:50:13,220 --> 00:50:20,970 Meanwhile, we have about I think we'll be about 10 minutes of questions, so I'll go through some of the questions here. 444 00:50:20,970 --> 00:50:30,330 The first one really deals if something you deal with right on your last screen, which focuses on the international dimension of this. 445 00:50:30,330 --> 00:50:34,650 And this comes from Yacine Yildirim. Thank you for your question. 446 00:50:34,650 --> 00:50:41,100 And the question is by considering the green theory in international relations to overcome most common environmental 447 00:50:41,100 --> 00:50:49,770 problems in the Gulf is relying on intra regional collaboration amongst Gulf nations a realistic or convenient way? 448 00:50:49,770 --> 00:50:57,240 Or do we need more effective method like global cooperation processes with the contribution of other middle nations? 449 00:50:57,240 --> 00:51:03,580 Quite possibly under the supervision of the United Nations? Very much for the question, 450 00:51:03,580 --> 00:51:13,030 I think part of the problem is a lot of the UN or international level mandates or regulation are not really compulsory, right? 451 00:51:13,030 --> 00:51:17,500 There is an issue of regulatory compliance here, 452 00:51:17,500 --> 00:51:26,650 but I do very much believe that a lot of the the region as a whole and despite the the borders of the nation state has the same challenges. 453 00:51:26,650 --> 00:51:32,380 And I think they will benefit significantly if there's cooperation, both in terms of particularly, 454 00:51:32,380 --> 00:51:37,720 for example, when it comes to oceans and waters that are open across the countries. 455 00:51:37,720 --> 00:51:43,370 I think there will be significant benefit when it comes to having a targeting that from a regional level. 456 00:51:43,370 --> 00:51:53,230 But I also believe, particularly with the point that I mentioned earlier on the low R&D point, as well as the fiscal restraint. 457 00:51:53,230 --> 00:52:00,160 I also think there's probably an opportunity for a regional collaboration similar to what you see across Europe, 458 00:52:00,160 --> 00:52:01,960 but to see it across the United States, 459 00:52:01,960 --> 00:52:12,640 where they pull resources together and also focus that on maybe having a region wide R&D centre or region wide hydrogen centre, et cetera. 460 00:52:12,640 --> 00:52:20,260 And I I'll I'll I'll stop here as I'm cognisant of other questions and the list. 461 00:52:20,260 --> 00:52:26,560 Thank you very much. Meanwhile, we're getting quite a few questions that people are actually fascinated by the data that 462 00:52:26,560 --> 00:52:33,670 you've been putting up and whether your slides in the presentation will be available. That's to let you know that we will be making it available. 463 00:52:33,670 --> 00:52:41,140 A recording will be put out both a sound recording on SoundCloud and on the YouTube channel that will take a little while, just edits and puts out. 464 00:52:41,140 --> 00:52:46,810 So do keep an eye on the Middle East centre of social media outputs where that will come through on that. 465 00:52:46,810 --> 00:52:52,240 So to those, if you ask me about that because there's a lot of information about absolute fascinating information. 466 00:52:52,240 --> 00:52:59,440 OK, another question Sami Fahmy asks You looked at the Hydrox look at the hydrogen issue and he wants 467 00:52:59,440 --> 00:53:07,550 to know is the hydrogen cost competitive in the economies that you've been looking at tonight? 468 00:53:07,550 --> 00:53:15,440 An excellent question, because if it's not competitive, then it would not make sense to get into it from an economic diversification perspective. 469 00:53:15,440 --> 00:53:23,480 So I have to say that clean hydrogen at the moment in general across the world is not competitive with oil and gas and with that in coal, 470 00:53:23,480 --> 00:53:29,150 what that means is oil and gas and coal are cheaper to us than green hydrogen. 471 00:53:29,150 --> 00:53:34,850 Having said, though, Gulf region, compared to other regions, have a comparative potential, 472 00:53:34,850 --> 00:53:38,390 I should say potential comparative advantage in the production of both blue hydrogen, 473 00:53:38,390 --> 00:53:43,880 which is hydrogen from fossil fuels with carbon capture and sequestration technology, 474 00:53:43,880 --> 00:53:49,820 as well as a potential comparative advantage in the production of green hydrogen, which relies on renewables. 475 00:53:49,820 --> 00:53:57,170 And I didn't really mention in the slides that renewables, even though I mentioned, are low. 476 00:53:57,170 --> 00:54:02,060 But the quality of the renewable resources that exists in the Gulf is amongst the best in the world. 477 00:54:02,060 --> 00:54:07,820 And also what that means is that they're able to produce some of the lowest renewable energy globally. 478 00:54:07,820 --> 00:54:10,280 And because of that, this will also translate, 479 00:54:10,280 --> 00:54:19,040 particularly for green hydrogen in producing low hydrogen costs very competitive with the rest of the world. 480 00:54:19,040 --> 00:54:24,380 But yet there are the challenges that I mentioned in terms of the there is not enough 481 00:54:24,380 --> 00:54:29,270 renewables at the moment to be used for producing green hydrogen and for blue hydrogen. 482 00:54:29,270 --> 00:54:37,250 I think Saudi Aramco particularly is trying to really be the world leader in blue hydrogen space. 483 00:54:37,250 --> 00:54:45,200 And they do have again a comparative potential comparative advantage because of their comparative advantage in the hydrocarbon space. 484 00:54:45,200 --> 00:54:52,040 But for that to compete with fossil fuels and completely replace them, I think we need to either see carbon taxes, for example, 485 00:54:52,040 --> 00:55:00,390 or some sort of a different structure and the change sorry at a structural change in the price of energy sources. 486 00:55:00,390 --> 00:55:09,620 Thank you very much, man, Alan, next question coming from Becky Evans, who comes from Ursula's college, I hope I'm pronouncing maths and science. 487 00:55:09,620 --> 00:55:11,290 I a you thank you very much. 488 00:55:11,290 --> 00:55:17,730 Yeah, as you can gather, the panel knows that because she's an alumnus of that college, and Becky is very proud to play me with such. 489 00:55:17,730 --> 00:55:26,880 So very pleased to have a question. Then Becky's question is, does the commitment to low carbon energy sources and environmental sustainability depend 490 00:55:26,880 --> 00:55:32,670 on the willingness of individual leaders of GCC countries to embrace such approach? 491 00:55:32,670 --> 00:55:36,960 Does domestic and or global public opinion play an influential role? 492 00:55:36,960 --> 00:55:45,550 So in other words, what are going to be the drivers of change internationally or do we have to rely on on the leaders within the states themselves? 493 00:55:45,550 --> 00:55:52,300 And greetings from Oxford scientists and hello to Becky, and thanks for the question. 494 00:55:52,300 --> 00:56:01,030 Yes, actually, this is a very important question because it does go into the point of the drive or the motivation for low carbon technologies. 495 00:56:01,030 --> 00:56:07,600 I think if you listen, for example, to the Saudi announcement, 496 00:56:07,600 --> 00:56:13,810 there has been a lot of talk about or use of language like we want to be leading in the world, 497 00:56:13,810 --> 00:56:21,700 we want to be known for being the leaders and in climate technologies and or circular carbon economy. 498 00:56:21,700 --> 00:56:31,570 So there's definitely this emphasis or interest of moving, joining really the the the the energy transition step, 499 00:56:31,570 --> 00:56:38,260 which has started to scale already and kind of joining that from being not only oil and gas leaders, 500 00:56:38,260 --> 00:56:41,170 but to energy transition leaders and also their reputation. 501 00:56:41,170 --> 00:56:51,010 And this is really very, very close came across very vividly in the past month or so with the zero emission targets. 502 00:56:51,010 --> 00:56:55,690 What's been really interesting in that is also this it's not just the reputation. 503 00:56:55,690 --> 00:56:58,780 I think that's important, but this position as global leaders. 504 00:56:58,780 --> 00:57:06,910 And also another thing that's interesting in terms of the part of the question is that in the Gulf, 505 00:57:06,910 --> 00:57:13,900 the individual leaders tend to be the decision makers are obviously very important in achieving a lot of the change. 506 00:57:13,900 --> 00:57:22,270 So I think they if a lot of the change has to come from the top down, we see Kuwait, for example, 507 00:57:22,270 --> 00:57:29,350 where the parliament has more of a prominent role being really lagging in terms of achieving change. 508 00:57:29,350 --> 00:57:35,410 So I think it's the interest of both the reputational interest leading the world in being the global leader in this, 509 00:57:35,410 --> 00:57:39,840 as well as the reputation for sure. Thank you. 510 00:57:39,840 --> 00:57:45,330 Now a couple of questions that sort of look at very similar themes about to what extent, 511 00:57:45,330 --> 00:57:50,280 what is the then the moves that have been made on the environmental issue. 512 00:57:50,280 --> 00:57:55,350 A really about an it's an image to the external world. 513 00:57:55,350 --> 00:58:00,840 We have Matteo Renzi, very good friend of the centre, former graduate of the centre, 514 00:58:00,840 --> 00:58:07,200 who asked all the sort of measures been introduced what you could call ornamental environmentalism. 515 00:58:07,200 --> 00:58:17,320 And we have an Alkhawaja who says all the the plans for carbon neutrality really just to appease global calls for climate change. 516 00:58:17,320 --> 00:58:22,980 So is it really about maintaining an external image or is this something more than you've answered that a little bit, 517 00:58:22,980 --> 00:58:27,270 but I'd like you be nice to hear something very direct on this. 518 00:58:27,270 --> 00:58:35,100 OK, something very direct. I think what's been really interesting is the Gulf states have been considered, have been fighting, 519 00:58:35,100 --> 00:58:44,160 so to speak, to preserve the role of fossil fuels in climate negotiations and in UNFCCC circles, et cetera. 520 00:58:44,160 --> 00:58:50,280 And some have even called them trying to obstruct, so to speak, climate negotiations. 521 00:58:50,280 --> 00:59:00,300 And we really see a 180 degree change in this year where I think there are clearly realising the world is moving towards an energy transition sphere. 522 00:59:00,300 --> 00:59:05,130 The world is really moving towards less fossil fuel consumption and more green. 523 00:59:05,130 --> 00:59:13,800 So let's join that phase. I think a big part of it, then one could argue that a lot of the projects that have been passed for sure are part. 524 00:59:13,800 --> 00:59:20,880 And this is actually the theme of my talk is it's not really driven by the domestic interest of protecting the environment domestically, 525 00:59:20,880 --> 00:59:26,190 but really protecting this leading role as as leading in the energy sphere. 526 00:59:26,190 --> 00:59:34,410 And now energy is inseparable from climate. So to be in leading in the energy sphere, you have to be a leading in the in the climate sphere as well. 527 00:59:34,410 --> 00:59:40,560 So there's definitely parts of that. But you can also read in the subtext when things say, for example, 528 00:59:40,560 --> 00:59:48,900 we will continue to use fossil fuels and there is this, there is this, I think, point that we well, 529 00:59:48,900 --> 00:59:53,970 the Gulf states will join the climate and be not obstructionist anymore, 530 00:59:53,970 --> 01:00:01,380 but will drive reduction in climate and emissions, for example, and improvement of the climate conditions. 531 01:00:01,380 --> 01:00:05,700 But at the same time, it's going to be on their own terms of what they want to achieve, right? 532 01:00:05,700 --> 01:00:14,610 So one could also then there say that maybe some of the projects that the the the the the programmes are really an ornament, as Matthew said. 533 01:00:14,610 --> 01:00:20,490 And I think there's two points to this question or two points in my answer, I should say. 534 01:00:20,490 --> 01:00:30,700 One is, I think there's definitely more. There's has to be significant change to the way energy has been consumed, 535 01:00:30,700 --> 01:00:35,520 to the way the economy has been structure and also to a lot of the projects that exist now that really 536 01:00:35,520 --> 01:00:40,800 require significant changes for that to achieve the climate targets that these countries have made. 537 01:00:40,800 --> 01:00:44,910 And there, one could also argue, are these projects really just an ornament? 538 01:00:44,910 --> 01:00:52,080 But in their defence, they're arguing that the projects have. We've yet to see the the proof of the pudding, so to speak. 539 01:00:52,080 --> 01:00:56,220 We've yet to see what will happen in twenty thirty or twenty twenty five, for that matter. 540 01:00:56,220 --> 01:01:07,750 Will the countries be on target? I think even if they are a bit of an ornamental facade, there is what we do see improvements on the climate front. 541 01:01:07,750 --> 01:01:15,480 So even if their motivation isn't necessarily protecting the environment, but to appease the rest of the world vision, they also help the environment. 542 01:01:15,480 --> 01:01:22,540 But I don't think that would be the most productive for the environment, obviously, and most efficient for maximising sustainability. 543 01:01:22,540 --> 01:01:26,740 I hope that was direct enough for your purposes. Yes. Well, thank you very much. I hope he was. 544 01:01:26,740 --> 01:01:30,590 I'm sure all the the audience appreciate it. 545 01:01:30,590 --> 01:01:38,710 Thank you. Perhaps this will be our last question, and it addresses something that's brought up in other countries as a way of dealing. 546 01:01:38,710 --> 01:01:47,530 Environmental issue is the issue of food, particularly food waste and changing patterns of consumption, particularly reducing meat consumption. 547 01:01:47,530 --> 01:01:52,880 Has this had any presence at all in the countries that you've been looking at? 548 01:01:52,880 --> 01:01:57,010 I suspect on evidence to back it up in the air. Not that I know of. 549 01:01:57,010 --> 01:02:04,570 And there are, you know, food consumption baskets, for example. I think parts of the bottoms of that have also included meat products. 550 01:02:04,570 --> 01:02:13,600 And that thing with that was food that is really important is the fact that most of the food consumed in Gulf states is actually imported, right? 551 01:02:13,600 --> 01:02:21,040 It is not all the domestically grown. And so then there is not just the level, at least if we talk from an environmental, 552 01:02:21,040 --> 01:02:23,770 let's say, emissions, but I think the question was on emissions level. 553 01:02:23,770 --> 01:02:27,970 The emissions from the food then, is not just the fact that whatever comes from the meat consumption, 554 01:02:27,970 --> 01:02:32,050 but also the transportation of that and securing the imports into the country. 555 01:02:32,050 --> 01:02:36,430 So that, to my knowledge, is definitely not hasn't been something that's been addressed. 556 01:02:36,430 --> 01:02:40,690 But also remember these states, as I mentioned, are welfare states. 557 01:02:40,690 --> 01:02:49,720 Even subsidy reform has been very contentious. So also reforming or telling people, now we're going to give you less support welfare, 558 01:02:49,720 --> 01:02:54,460 but also you should start changing your your behavioural patterns when it comes to food, 559 01:02:54,460 --> 01:02:57,520 I think will be quite shocking and an environmental perspective. 560 01:02:57,520 --> 01:03:06,880 But there are very small not within divisions, but there are small groups within a grassroot effort, so to speak, that talk about, for example, 561 01:03:06,880 --> 01:03:12,640 sustaining the fish that comes out of the ocean because it's not sustainable and those kind of efforts, 562 01:03:12,640 --> 01:03:16,680 but nothing at a division level, as far as I know. Thank you very much. 563 01:03:16,680 --> 01:03:26,340 Unfortunately, we're rapidly approaching the end of our time, so we haven't been able to answer all the questions, but I'll hand you back to Walter. 564 01:03:26,340 --> 01:03:33,510 OK. Yes, I'm sorry that I didn't get a chance to ask my question, but I've already gone to the end. 565 01:03:33,510 --> 01:03:39,900 So on behalf of the Middle East Centre and on behalf of our very lively and competitive audience, 566 01:03:39,900 --> 01:03:44,400 I want to thank you now for an excellent presentation. My absolute joy. 567 01:03:44,400 --> 01:04:00,277 It's been wonderful to be with all of you and many thanks for the audience in the Q&A and for arresting me today.