"A model in preparation for a ‘post-oil’ world"

In February the UAE launched a nationwide energy sustainability campaign under the name, “Heroes of the UAE”. Developed in conjunction with the Emirates Wildlife Society, the WorldWide Fund for Nature and the Environmental Agency-Abu Dhabi, the campaign’s goal is to seismically reduce the high carbon footprint and energy consumption by UAE nationals and a multitude of expatriates and foreign visitors. The “Heroes” campaign could not have been born at a better historical moment.
With one eye on the volatile global energy market, Saudi Arabia plans to make solar power an essential pillar of its energy mix, and to export this new energy much like it does in-ground fossil fuels. At a 2007 Riyadh summit, Gulf Opec members pledged approximately $750 million to fund clean technology research as part of an enterprise that will undertake meaningful carbon capture and storage.

Along these lines, Abu Dhabi’s Masdar Future Energy Company launched a $15 billion initiative to construct the world’s first “zero pollution, zero waste” city. This enterprise will house 50,000 people in close vicinity to their workplaces, industries and educational facilities. The city’s energy needs will come largely from solar power, which will be aided, conducted and contained by an advanced architecture design that permits a passive energy balance. The built-in energy savings will be buttressed by extensive waste recycling and an advanced public transport system. If successful, this futuristic model may become a “green” template for the West and, for that matter, for the rest of the world.
Masdar plans clean energy investments for projects that will span across the greater Middle East and North Africa region. On July 23, 2008, Masdar and Bahrain’s Gulf Petrochemical Industries Company formed a strategic partnership to dramatically reduce greenhouse gas emissions within the framework of the United Nations Clean Development Mechanism (CDM). By limiting carbon emissions, the partnership will earn certified emissions reductions certificates that can be sold on the open carbon market to companies that cannot otherwise comply with carbon emissions mitigation obligations. GCC states are not under binding emissions ceilings, since the CDM classifies them as “developing nations”. Therefore, GCC states and their trading partners can creatively tailor advantageous carbon abatement programmes at drastically reduced CDM costs.
On the technology front, the Masdar Institute of Science and Technology is partnering with the Massachusetts Institute of Technology to develop forward-looking renewable energy technology. Through this partnership, the UAE will establish its credentials not only as a hydrocarbon exporter, but also an exporter of expert, advanced technology. With exploitation of its natural solar advantages, the Gulf should reach beyond a comprehensive renewable energy plan and create a regional carbon trading system on a scale more impressive than either the European Union Emissions Trading System or the Chicago Climate Exchange.
If successful, the “Heroes” template should enable the UAE and the wider GCC to progress through a possible “post-oil world”. The GGC states have experienced an exponential increase in domestic demand for hydrocarbons as a result of demographic increases, combined with enlarged industrial demands arising from economic diversification. An astute and comprehensive plan should incorporate renewable energy as an integral part of the UAE’s diversification strategy. The UAE may become known for its creative leadership in the global market and for the practicality of its carbon mitigation projects.
As always, some energy experts may argue that the Gulf states should have moved faster along this technological and commercial trajectory. However, an initial technological lead may also allow the UAE additional opportunities for creativity attached to its status as an already successful energy pioneer. Through leadership in monetising its carbon emissions, and through the assistance of regional banks such as the First Energy Bank, the UAE will have an opportunity to incorporate Islamic financial instruments, such as sukuk (Islamic bonds), as the logical next step of carbon project financing for a country that – through foresight and patience – is determined to be one step ahead.