This section seeks to analyze the defining moment in MBZ’s environmental agenda which refers to a pivotal event in life that shaped him into a climate leader in the MENA region and in the world. September 2016 is hence a milestone for the UAE when MBZ ratified the Paris Accords, making the UAE the first Arab Gulf country to accept the climate deal which is the first-ever universal, legally binding global climate change agreement. The ratification is pivotal as it reaffirms to the world how MBZ sees climate action not only as a responsibility for the environment but also as an essential preparation for his country in a post-oil world and hence a national priority. The agreement is also an effective vehicle for the president to gain more international recognition and consolidate his power in the region.
The 2014-2016 oil prices crisis
Between 2014 and 2016, the world witnessed one of the sharpest declines in oil prices in modern history when “prices (on a monthly average basis) fell from over US$100 per barrel in July 2014 to less than half that by January 2015”. According to the World Bank, “the 70 percent price drop during that period was one of the three biggest declines since World War II, and the longest lasting since the supply-driven collapse of 1986”. There are two main reasons for this oil price drop: the growth of US shale oil production and the low demand from the oil-importing markets.
Plummeting global oil prices severely hit the UAE and led to a subsequent dwindle in the country’s hydrocarbon exports and revenues. The US Energy Information Administration (EIA) suggested that the Gulf country underwent a decrease by half in terms of real oil export revenue between 2014 and 2015 alone. The oil price crash in 2014 had a greater magnitude and duration than any other oil shocks before, thus exerting more significant impacts on public finances in the UAE. In response to the oil price volatility and its impacts, the UAE decided to cut expenditures and implement tax reforms such as goods or services tax to compensate for the loss of government revenues.
For MBZ, this oil crash in 2014 heightened how the UAE’s economy is strongly dependent on fossil fuels production and hence highly vulnerable to the oil price fluctuation. At that time, the UAE was the only Arab country that managed to considerably reduce the contribution of oil to the national GDP, with fossil fuels accounting for 38.9% of GDP in the UAE, compared to 45.1% and 54.4% in Saudi Arabia and Qatar respectively. Although economic diversification had been well underway during the reign of Sheikh Zayed and Sheikh Khalifa, the oil shocks in 2014 struck MBZ that it was crucial for him to accelerate his commitment of shifting the UAE economy towards multiple sources of revenues other than oil. MBZ’s strong focus on environmental agenda such as the array of renewable energy and the conservation projects plays an important part in his efforts in diversifying the UAE economy, fighting climate change, gaining international recognition as a climate leader and consolidating the UAE’s position in the international community.
The Paris Accords 2016
When the Paris Agreement was adopted in 2015, it received huge resistance from major oil-producing countries, especially Saudi Arabia, as the agreement posed threats to their main revenue source and would undermine their position as one of the world’s largest oil producers. As the de facto ruler of OPEC and an influential country in the region, Saudi Arabia voiced its strong opposition to the Paris Accords. Bearing this in mind, petrostates such as Qatar and the UAE were expected to be reluctant to diverge from Saudi Arabia’s position in terms of the climate deal, especially since the two countries were close allies of Saudi Arabia in dealing with the Yemen conflict and the Islamic State at that time. Yet, amidst the oil prices shock from 2014 to 2016, MBZ still took bold action by ratifying the Paris Agreement in 2016, making the UAE the first Gulf state to enter the climate deal. The Paris Agreement is a milestone for both MBZ and the UAE, mainly driven by MBZ’s policies of economic diversification to reduce the country’s vulnerability to oil shocks, the need to fight climate change inherited from the Nahyan family, and his desire to gain more international recognition and bolster the position of the UAE in the international community.
The Paris Agreement is a legally binding international treaty on climate change and a landmark in the multilateral climate change process because, for the first time, a binding agreement brings all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects. The first key aspect of the Paris Agreement is the Long-term Temperature Goals which aim to limit global temperature increase to well below 2 degrees Celsius and preferably 1.5 degree Celsius. The second one is Global Peaking and ‘Climate Neutrality’, with parties trying to reach global peaking of greenhouse gas emissions (GHGs) as soon as possible. The third aspect of the agreement is Mitigation which is manifested via a nationally determined contribution (NDC), in which each party establishes its domestic policies to fight climate change and achieve the binding commitments of the agreement. Every country communicates their NDCs every 5 year and the successive NDC represents a progression beyond the previous one and reflects the highest possible ambition.
In 2016, on behalf of the UAE government, Dr Thani Ahmad Al Zeyoudi, the Minister of Climate Change and Environment, signed the Paris Climate Agreement in New York. The participation of the UAE in the Paris Accords signified the Gulf state’s commitment to combat climate change and its tireless efforts in diversifying the economy to reduce its heavy reliance on fossil fuels. During the ceremony, the minister said “The Paris Agreement is the world’s first truly durable response to climate change. It allows each country to contribute climate actions in accordance with their own economic and development priorities. For the UAE, this means solutions which create new social and economic opportunities and support our ambitious agenda towards economic diversification”.
The Paris Agreement came as a natural step for the UAE as the Gulf country had been focusing on environmental protection for years. The founding father of the federation, Sheikh Zayed, had long ago realized the coming future of energy transition and therefore laid a solid foundation for the country’s progressive approach to sustainability and climate change. Sheikh Zayed’s vision was then continued by his son, Sheikh Khalifa, who played a key role in successfully diversifying the economy, boosting non-oil revenues, and developing an array of environmental initiatives. That is to say, long before signing the Paris Accords, the Nahyan family had shown their strong commitment to economic diversification and considerable efforts in environmental conservation. This is demonstrated by the Mazda city project and their investment in clean energy projects such as the solar parks and the nuclear energy plants. Having carried out these projects for years, the UAE wants to present itself as a catalyst in the renewable energy transition.
How does MBZ view the Paris Agreement?
MBZ considers the ratification of the Paris Agreement as a milestone that heightened his commitment to accelerate economic diversification and combat climate change. In the Government Summit in 2015, one year before the UAE joined the Paris climate deal, MBZ delivered the main address speech, expressing his vision about the oil depletion in the future: “In 50 years, when we might have the last barrel of oil, the question is: when it is shipped abroad, will we be sad? If we are investing today in the right sectors, I can tell you we will celebrate at that moment.” The statement is significant as it shows how well MBZ is aware of the future oil exhaustion in the petrostate and how clear he is about what to prepare for his country in that future. One year later, the UAE officially ratified the Paris Agreement, joining the other 192 countries in the fight against climate change. Having inherited the tradition of his family in environmental conservation and implemented numerous environmental policies before, MBZ saw the Paris Agreement as a natural step proclaiming that now the UAE is ready to actually pledge for the target of net zero by 2050. For the Emirati president, the UAE’s pledge for net zero by 2050 builds on the country’s past decades of climate efforts and represents a strategic target for its future. From MBZ’s perspective, the Paris Agreement is a strong reminder for him and Emirati people that in order to secure the post-oil future, it is urgent for the country not only to step up its economic diversification, especially after the oil price crash in 2014, but also to reaffirm its commitment in combating climate change.
The Paris Agreement is also an ideal vehicle for MBZ to gain more international credit and increase his influence in the region. As the first Gulf state to commit to a national drive net zero, the UAE received a lot of acclaim for taking the initiative and setting an outstanding example for countries in the region to follow:
Alok Sharma, President of COP26, tweeted “I am delighted that the UAE has announced it will reach net zero carbon by 2050. As the first net zero carbon commitment in the Gulf, this is a historic announcement. I look to others in the region to also announce ambitious climate action commitments ahead of”.
Tanzeed Alam, climate change and energy director at Emirates Wildlife Society – WWF said “This is great news because the UAE has now become a positive example to others in the region and farther afield”.
This bold move by MBZ and the UAE has put more pressure on countries in the region, especially Saudi Arabia, to push forward their environmental agenda and be a part of the solution to climate change. The ratification therefore elevates MBZ and the UAE’s standing and distinguishes it as a global climate leader in the MENA region which is still dominated by fossil fuels. Secondly, the ratification of the Paris Agreement allows the UAE to gain more support from the US and facilitates the cooperation between the two countries in the environmental sector. In April 2021, US Special Presidential Envoy for Climate John Kerry praised the UAE’s climate leadership: “It’s remarkable to find the UAE trying to lead many other nations in the search of new technology to address the global climate challenge and in transitioning to the new economy while facing this crisis.” Although the two countries had been collaborating in environmental projects before, the cooperation was further promoted after the UAE joined the Paris Accords in 2016. To illustrate, the Massachusetts Institute of Technology (MIT) was central to establishing and advancing the Masdar Institute of Science and Technology, a graduate institute dedicated to renewable energy research that is today part of Khalifa University. Aside from that, the two countries jointly initiated the Agriculture Innovation Mission for Climate (AIM for Climate) to accelerate innovation and research and development in agriculture and food systems in order to spur low-carbon growth and enhance food security. As a significant global investor in sustainable energy, the UAE is building solar and wind projects across the US, collaborated with the US to establish Mission Innovation, a partnership to double clean energy R&D within 5 years, and is working together with the US on implementation of the $50 million UAE-Caribbean Renewable Energy Fund, which is building solar power plants in 16 countries. Such cooperation with the US is instrumental to the UAE’s environmental agenda and economic diversification.
To conclude, the ratification of the Paris Accords is a pivotal moment in MBZ’s environmental agenda. It made the UAE the first state in the Gulf to accept the Paris climate deal and pledge for net zero by 2050, signifying MBZ’s commitment in continuing his family’s legacy in conservationism and accelerating economic diversification. The ratification also reflects his desire to acquire more international credit as a climate leader and reinforce the UAE’s position in the region.