Oil depletion and a potential global oil phase-out
As a major petrostate in the world, the UAE is currently facing two enormous problems: a global effort in oil phase-out in the short term and the inevitable depletion of oil in the long term (See Part 2: “Their Stake”). To counter such challenges and prepare the UAE for a post-oil world, MBZ has been carrying out a range of policy solutions to reduce the country’s heavy reliance on this natural resource. MBZ’s general approach to the disappearance of oil focuses on clean energy transition and economic diversification which both aim at reducing the contribution of the oil sector to national GDP.
Clean energy transition
Since joining the Paris climate deal, MBZ has been increasingly vocal about his ambition to transform the UAE from a petrostate to a major renewable and hydrogen powerhouse in the world. At COP21 United Nations Climate Change Conference in December 2015, the UAE affirmed its plan of producing 24% of its electricity from clean energy sources. In addition, after pledging for net zero emissions by 2050, the Gulf country declared plans to increase the contribution of clean energy in the total energy mix from 25% to 50% by 2050 in the UAE Energy Strategy 2050, the first unified energy strategy in the Gulf state. In the UAE Energy Strategy 2050, the country set the target of an energy mix including: 44% clean energy, 38% gas, 12% clean coal, and 6% nuclear. In order to carry out the energy transition, the Gulf country mainly focuses on renewable energy and nuclear energy projects.
Solar power has been the predominant source of renewable energy and hence the primary focus of the UAE in the energy transition, with three of the world’s largest solar power plants located there. The Al Dhafra Solar PV project, expected to be one of the world’s largest solar power plants, is currently under construction in Abu Dhabi and will be in full operation at the end of 2022. With a capacity of two gigawatts and about 3.5 million solar panels, the Al Dhafra Solar PV IPP will generate enough electricity for approximately 160,000 homes across the UAE. It will mitigate 2.4 million tonnes of carbon dioxide annually. The Al Dhafra Solar PV plays a key role in fulfilling the UAE’s ambition of having 44% of its power sourced from clean energy by 2050.
Apart from large-scale solar power plants as mentioned above, the UAE also focuses on installing small-scale solar facilities and programs. Firstly, the Abu Dhabi government has launched the solar rooftop plan as an incentive to make solar PV deployment on rooftops more feasible for the owners of commercial buildings. In addition, it is popular to install solar canopy structures for car parks in the UAE which not only generate green energy but also protect cars and people from solar heat outside. Thirdly, solar energy is harnessed to power water heating facilities in major hotels such as the Aloft Hotel in Abu Dhabi, the Masdar Institute in Abu Dhabi, the Burj Khalifa in Dubai, and the Palm Jumeirah in Dubai. Also, some areas in the UAE such as Masdar and Abu Dhabi are using solar panels for street lighting.
In short, the Gulf state has been pushing forward the construction of major solar power plants, especially the Al Dhafra Solar PV, and the installations of small-scale solar facilities such as solar rooftop plan and parking lot solar canopy structures. This demonstrates the importance of solar power for the UAE authorities in implementing the clean energy transition and slashing out carbon emissions to meet the commitment of the Paris Agreement by 2050.
Knowing that renewables alone cannot meet future energy demand, MBZ has focused on nuclear energy programs as another instrumental part of the energy transition in the UAE due to its high power density. Expected to generate massive quantities of carbon-free electricity compared with other alternative sources, nuclear energy will be the main source for generating non-hydrocarbon based electricity, provide a growing Emirati population with affordable energy, and hence enhance energy security.
At the heart of the UAE’s nuclear journey is the construction of the Barakah nuclear power plant, which has been supervised by MBZ. Comprising four units, the Barakah project was officially launched in 2012 and November 2021 marked the completion of the third unit’s construction. The Barakah nuclear power plant is considered a landmark development for MBZ, the UAE and the entire region for three main reasons. Firstly, this elevates MBZ’s standing in the MENA region as he managed to launch the first operational nuclear reactor in the Gulf. In a 2020 visit to the Barakah plant, MBZ emphasized that “the Barakah Nuclear Power Plant is a historically significant project for the UAE, which will consolidate its leadership position and role in the growing clean energy sector”. Secondly, Barakah is expected to be a vital part of the country’s clean energy transition by providing up to 25% of the electricity for the country upon completion. Finally, the successful operation of the Barakah plant is a test for the potential nuclear energy industry for the whole region and provides a huge incentive for other neighboring countries such as Saudi Arabia and Qatar to develop similar nuclear programs.
The construction of the first nuclear power plant in the turbulent region entails a whole range of hurdles for MBZ. Amidst worrying concerns of nuclear proliferation in the Middle East, MBZ needed to take deliberate measures to reassure the international community, especially the US and Israel, that the Barakah plant complies with the highest standards of nuclear safety and security, without risk for nuclear proliferation. In particular, apart from participating in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and the International Atomic Energy Agency (IAEA) Convention on Nuclear Safety, the UAE has concluded nine bilateral nuclear cooperation agreements with responsible and experienced nuclear countries. MBZ has also worked closely with the US in this nuclear journey. Apart from the UAE-US 123 Agreement, which provides a legal framework for commerce in nuclear energy technology between the two countries, a number of US companies play an important role in the UAE’s nuclear program by providing major components, instrumentation, and technical transfer.
The Barakah nuclear power plant has attracted severe criticisms from regional powers and environmentalists as they consider it a major threat to stability of the region, which is already tense with various conflicts. Qatar, which already has a strained relationship with the UAE, voiced its objection to the Arab’s first nuclear plant and expressed its grave concern over nuclear safety. In 2019, Qatar’s Foreign Affairs ministry sent a letter to IAEA Director General Yukiya Amano, saying that “Qatar believes that the lack of any international co-operation with neighboring states regarding disaster planning, health and safety and the protection of the environment pose a serious threat to the stability of the region and its environment”. Iran, a close ally of Qatar in the region, also expressed its concern about the UAE nuclear power plant. Head of Iran’s Civil Defense Organization Brigadier General Gholamreza Jalali urged the UAE to address the regional states’ concerns about the safety and security of the power plant. However, these criticisms must be taken with a grain of salt, as Qatar and Iran are the UAE’s main regional rivals and seek to weaken the Emirates. For example, despite expressing concern about the safety and security of Barakah, Iran has supplied Houthis with cruise missiles, which were later used to target the nuclear site. Apart from neighboring states, some nuclear energy specialists express disapproval of the Barakah plant as they are afraid the reactors are not only a potential environmental disaster but also a contributing factor to a nuclear arms race between regional rivals. Paul Dorfman, a senior researcher at the international expert body Nuclear Consulting Group (NCG), said “While the UAE has signed non-proliferation treaties and ratified International Atomic Energy Agency (IAEA) agreements, i.e. the UAE’s programs cannot be used to develop atomic bombs, there is still the risk it could share its knowledge with others not bound by similar deals.”
On the other hand, some believe that the Barakah nuclear power plant poses little threat. In a visit to Barakah, the de facto ruler of Saudi Arabia and also a close ally of the UAE, Mohammed bin Salman Al Saud publicly claimed the nuclear power plant is “a pioneering project” and its operation “comes in line with the growing awareness of the importance of nuclear energy”. Mark Hibbs, a senior associate at the Carnegie’s Nuclear Policy Program, said “there is no risk of proliferation” as the UAE “has a record of complete transparency” and “has ratified all IAEA recommendations”. The Nuclear Threat Initiative, a global security organization which focuses on reducing nuclear and biological threats imperiling humanity, reported that the UAE is “often referred to as a model for nuclear newcomers.”
Government’s actions to facilitate the energy transitions
The MBZ-led government has been introducing a whole range of policies, incentives, and tax credits to facilitate the energy transition, especially in terms of solar and nuclear energy. Firstly, the UAE has made some changes to statutory provisions to attract more foreign investors in the solar power sector of the country. In 2020, the UAE cabinet issued Resolution No. 16 of 2020 to allow foreign shareholders to own up to 100% of companies in certain designated sectors, one of which is renewables. This is a huge incentive for foreign investors to explore the UAE markets, especially regarding the solar panels production and green technology. Secondly, some emirates such as Abu Dhabi and Dubai have adopted the Independent Power Producer (IPP) model, which allows private entities to own and operate facilities to generate power and sell it in the open market. The IPP model has been the go-to model for the UAE as it enables the country to meet rapidly rising electricity demand by encouraging the private sector’s participation and international investment in energy projects in the country. In addition, the UAE government also creates favorable conditions for the development of solar energy by setting one of the most cost-competitive tariffs for solar energy set at AED 4.97 fils per kilowatt hour.
Aside from domestic policies, the UAE has been actively building their presence in the clean energy sector via huge investments in renewables abroad. The Gulf state reaffirmed its plan to provide fundings for thousands of megawatts of solar-energy projects in countries across the world. In May 2022, a senior minister at the World Economic Forum in Davos, Switzerland said “The UAE has invested more than $40 billion in clean energy over the last 15 years, and has plans to invest an additional $160 billion in clean and renewable energy sources over the next three decades on the road to net zero”. In April 2021, MBZ received Iraq’s Prime Minister, Mustafa Al Kadhimi in the UAE and announced a $3 billion investment in the country, part of which is allocated for the clean energy sector. In May 2022, the UAE-owned Masdar company started the construction of a 230-megawatt (MW) Garadagh Solar PV Plant in Azerbaijan which is the first foreign investment-based independent solar power project in the country. Masdar is also investing in clean energy in Morocco via the construction of an 800MW solar power plant there.
The emergence of the UAE as a major investor in renewables reflects two things. Firstly, MBZ wants to position the UAE at the center of the global energy transition. He wants to increase his political clout and establish diplomatic relations with those countries by helping them achieve their climate goals. Secondly, investing in clean energy in other countries allows MBZ to acquire more international credit, consolidate his image of a global climate leader, and reaffirm his desire to be a part of the solution to climate change. In addition, MBZ wants to build the UAE’s widespread presence in the renewable business abroad, which promises the country a lot of economic opportunities during the energy transition and in the post-oil world. Finally, the substantial investment in renewables abroad is a part of the UAE’s long-term plan to enhance its energy security. In other words, as a major global investor in renewables, the UAE can secure itself sufficient energy supplies in a post-oil world.
Aside from the clean energy transition, MBZ is leading economic diversification with a focus on the tourism sector, financial hub, and supply chain links; however, these will not be addressed in depth as they do not fit the analysis angle of the report. The UAE authorities have launched an array of tourism initiatives and hugely invested into infrastructures to promote the tourism sector, which contributed 11.6% to the GDP of the UAE in 2019. In addition, MBZ also focuses on the development of the UAE, especially Abu Dhabi, as a key financial hub of the region by attracting multinationals into the country. The emirate, which is already home to many multinational corporations and international businesses, has tailored its tax and legal system to create a dynamic destination and attract more foreign direct investment.
Desertification has remained high on the environmental agenda of MBZ and the UAE due to its threat to the long-term survival of the country. Apart from being a member of the United Nations Convention to Combat Desertification (UNCCD), the UAE has established a National Environmental Strategy (NES) as a guideline to mitigate desertification. A highlight in the UAE’s fight against desertification is its efforts in “greening the desert” or “turning natural desert into productive agricultural land”, which is different from the approaches of other countries and the UNCCD. In particular, in order to push back the encroaching desert, the Gulf state has been focusing on three main areas: agricultural land development, soil resources management, and water resources management.
Firstly, afforestation lies at the core of the UAE’s plan in developing agricultural land. The country has been pushing forward forestry plantations to promote soil fixation and stop sand from encroaching. In addition, the country has built an array of green belts in urban areas and along roadsides to increase vegetation cover, stop and reverse the land degradation.
Secondly, the UAE has made great efforts in managing soil resources. The Abu Dhabi government created a scientific soil inventory, which provides reliable information on soil and landscapes and helps develop a land degradation map in the area. The inventory has proved important for effective land management in the country. In addition, Abu Dhabi has developed salinity mapping and monitoring as a major part of soil resources management. A better understanding of salinity in affected agricultural lands allows the authorities to identify potential management-related problems. The effective soil management and afforestation will accelerate MBZ’s efforts in greening deserts in the UAE.
Finally, since the misuse of water is a contributing factor to desertification, MBZ has focused on the integrated management of water resources, including groundwater, desalinated water, and treated wastewater. The country has implemented a national program to protect groundwater resources via establishing and monitoring a groundwater database. In addition, the Emirati government has been constructing desalination plants and decreasing the prices of desalinated water for people. It is estimated that approximately 70% of treated wastewater is distributed for irrigation purposes in national parks, forests, and gardens. All these approaches allow the UAE to improve their water resources management and alleviate the impacts of desertification.
In short, MBZ and the UAE have focused on agricultural land development, soil management, and water resources management to offset the effects of desertification and further implement the greenification policy driven by Sheikh Zayed and Sheikh Khalifa. The greening efforts reflect MBZ’s deep concerns about the long-term survival of the UAE and his desire to continue the conservation legacy of his family.
With one of the highest levels in the world, air pollution is another key issue on MBZ’s environmental agenda. MBZ’s efforts in curbing air pollution are reflected in the National Agenda of the UAE Vision 2021 which aims to improve the air quality from the current level to 90% by 2021. In order to achieve this, MBZ and his Ministry of Climate Change and Environment have focused on “developing and enhancing the national standards for air pollution and compliance control, the transition to a green economy, and increasing the use of clean energy in different fields, the sustainability of the transport sector, the development of an air quality control network and the reliance on intelligent technologies and solutions in monitoring types of pollutants”. A notable example for this cross-sectoral solution is the zero-carbon Masdar City Project, which was initiated in 2006 and later pushed forward by MBZ.
Masdar City project
Masdar City project is an outstanding example of a cross-sectoral approach to sustainability, based on 7 principles: energy efficiency, sustainable transportation system, water efficiency, energy efficiency, outdoor comfort, zero waste, and high quality of life. Masdar City reflects the economic diversification efforts of MBZ to accelerate the clean energy transition and develop a knowledge-based economy. In 2008, MBZ announced that the government of Abu Dhabi would contribute $15 billion to Masdar, part of which was for developing the world’s first carbon-neutral, zero-waste city. Later when MBZ visited Masdar in 2011, he further emphasized the importance of continuing the far-reaching vision of Sheikh Khalifa to ensure the development of a diversified energy mix via the Masdar project.
From the environmental perspective, the project is significant as upon operation, it will be the first community in the world where the carbon emission is zero with no vehicles powered by fossil fuels. The full carbon-neutrality of Masdar city with a focus on solar power and other renewables will play a major role in curbing air pollution in the country, acting as a catalyst toward sustainable cities and green technologies in the UAE and in the MENA region. Expected to be the world’s first zero-carbon city, the project is a major part of MBZ’s plan to push forward the model of environmental sustainability for other countries to replicate.
MBZ and the UAE are pushing forward the plantation of mangroves as major carbon sinks. In addition to protecting the country from rising sea levels and enhancing biodiversity, mangroves also serve as powerful carbon sinks. They can soak up a significant amount of carbon dioxide in the atmosphere and store it in their roots and branches; mangroves are believed to have the carbon absorption capacity 10 times larger than forests. Compared to forests which keep carbon in biomass and release carbon back to the environment when the trees die, mangroves sequester carbon in the soil and sediments and hence air pollutants can stay there for millenia if undisturbed.
Realizing the huge environmental values of these plants, the UAE pledged to plant 100 million mangroves by 2030 at COP26 in Glasgow. In February 2022, Khaled bin Mohamed bin Zayed, MBZ’s son, had a meeting with Prince William to launch the Abu Dhabi Mangrove Initiative to enhance the mass scaling of mangrove recovery. By expanding the mangrove cover as a blue carbon ecosystem, the country can reduce significant carbon emissions and mitigate climate change.
In an attempt to continue the nature conservation tradition of the Nahyan family, preserve biodiversity of the UAE, and develop the tourism sector, MBZ has led significant conservation efforts to protect wildlife.
Firstly, MBZ played a central role in the establishment of the Environmental Agency – Abu Dhabi which is the environmental regulator of the emirate and has been actively involved in conservation projects in the UAE. A highlight of his conservation efforts is the establishment of Mohammed Bin Zayed Conservation Fund which awards grants to species conservation initiatives not only in the UAE but also all around the world. By creating this fund with a global focus, MBZ wants to recognize leaders in the field and elevate the importance of conservation. MBZ also managed to form a partnership with Mubadala Investment Company, the Abu Dhabi-based sovereign investor, to increase the capacity of the fund and support other initiatives. In addition to the fund, MBZ has been continuing Sheikh Zayed’s efforts in protecting Arabian Oryx which is considered the official national animal of the UAE. In 2007, following the directives of his father, MBZ launched the Sheikh Mohamed Bin Zayed Arabian Oryx Reintroduction Programme to increase the animal’s population and save it from extinction.