Dh10b adaptation investment to contribute over Dh100b to UAE GDP by 2030 – News

Adaptation costs in developing countries are projected to reach US$ 300 billion per year by 2030. In comparison, global adaptation financial flows in 2020 were only US$46 billion, of which only US$28.6 billion went to developing countries.That’s not enough, according to the World Economic Forum

A man in traditional Emirati clothing looks at a row of wind turbines at sunset. Analysts at the World Economic Forum have warned that developing countries will be hit harder by climate change.

A Dh10 billion investment in climate adaptation to combat projected climate disruption could contribute more than Dh100 billion to the UAE’s gross domestic product by 2030, Standard Chartered said in a study released on Monday.

“The UAE is at the forefront of the fight against climate change, with a strong commitment to achieve its net-zero emissions target by 2050; thus, setting an example not only at the regional level but also at the international level. Adaptation is a common need, as our research highlights Failure to act could create a shared social burden with multiplied costs, as we have done,” said Rola Abu Manneh, chief executive of Standard Chartered Bank in the United Arab Emirates.

Climate experts and investment funds predict that the global climate adaptation market is expected to reach $2 trillion by 2026, according to the World Economic Forum, and that demand for adaptation solutions will increase as climate impacts become more pervasive.

Adaptation costs in developing countries are projected to reach US$ 300 billion per year by 2030. In comparison, global adaptation financial flows in 2020 were only US$46 billion, of which only US$28.6 billion went to developing countries. According to the World Economic Forum, that’s not enough.

Analysts at the World Economic Forum have warned that developing countries will be hit harder by climate change. The 55 most climate-vulnerable economies in the world have already lost 20% of their GDP. “There is a clear need for increased funding for climate adaptation, especially in developing countries,” they said.

Rola Abu Manneh, chief executive of Standard Chartered Bank in the United Arab Emirates, said adaptation is a common need.

The Standard Chartered study covers 10 markets, including the UAE, India, China and Pakistan, and highlights that failure to act could cost billions of dollars in climate damages and lost GDP growth this decade. Across the study, without investments of at least AED 110 billion, the markets included in the study would face projected losses of over AED 1 trillion and lost GDP growth.

“The financial sector plays a crucial role in directing capital towards adaptation and creating evidence that adaptation investments are a commercially viable and attractive proposition for the private sector and will have a positive impact on overall economic growth,” Manneh said. positive influence.” .

The AED 110 billion investment required for the 10 countries to adapt is only slightly more than 0.1% of the combined annual GDP of the 10 markets in the study, and far below the estimated AED 347 trillion required for emerging markets to transition to net zero emissions using mitigation measures Ram, as outlined in Standard Chartered’s timely report.

Of the 10 markets included in the study, India is projected to benefit the most from adaptation investments. Under a scenario of 1.5°C warming, the market estimates that AED40 billion is required to prevent climate damage and AED500 billion in lost growth – which equates to a 13-to-1 return on investment in climate adaptation for the Indian economy.

Pakistan will need AED 2.2 billion in adaptation investments to prevent climate disruption and AED 27.8 billion in lost growth.

The bank’s projections assume the world succeeds in limiting temperature rise to 1.5°C, in line with the Paris Agreement. In a 3.5°C scenario, the estimated minimum investment would need to more than double to AED 225 billion, and potential losses would increase dramatically without investment.

Examples of climate adaptation projects include creating coastal barrier protection solutions for flood-prone areas, developing drought-resistant crops and early warning systems for impending natural disasters.

According to the study, China could avoid costs of about Dh410 billion by investing only Dh30 billion. Kenya, which requires the least investment, can avoid costs of about 8 billion dirhams by investing 730 million dirhams in adaptation.

The study argues that even if countries around the world manage to meet the goals of the Paris Agreement, adaptation to climate change must go hand-in-hand with the global decarbonization agenda, with the banking sector playing a key role in unlocking finance.

— issacjohn@khaleejtimes.com