United Arab Emirates
Solar power and segregation
When it comes to the transition to a green and fair economy, the United Arab Emirates (UAE) has further to go than most. But this small Gulf country also uniquely understands the power of economic metamorphosis.
In the space of less than half a century, the UAE has transformed itself from a desert backwater exporting fish and pearls, to an extravagant global hub of gleaming skyscrapers and shopping malls – possibly the only country in the world where the police drive Bugattis.1 Powering this astonishing change is, of course, oil: the UAE controls about a seventh of the world’s proven crude oil reserves and has been one of the world’s biggest hydrocarbon exporters since the 1960s.
Billions of dollars in oil revenues have made the UAE one of the world’s richest countries. However, unlike many other petrostates, the Emirates has in recent years begun to diversify its economy. Since 2009, oil’s share of GDP has fallen from 85% to less than 25% today, supplanted by construction, tourism, and financial services.2
This diversification may explain why the UAE has also staked out a (relatively) more progressive position on climate and renewable energy than its OPEC neighbours. Although the Emirates still has the world’s 7th highest carbon emissions per capita, in 2018 it became the first Gulf state to set a carbon reduction target - albeit a very modest one. It has poured billions into developing its world-class solar energy resources, with the world’s largest solar farm going online in June 2019.
The impact of COVID-19 on international oil prices - and the collapsing export revenues of oil-producing states - may well convince other Gulf states to follow the UAE's strategy of diversifying away from hydrocarbons. But so far at least, the UAE's policy response to COVID has reinforced business-as-usual activity, with no green measures, investments or support for a green recovery apparent in economic support packages to date.
But the UAE's sunny green vision has a dark side of inequality, exclusion and opaque governance. Fossil fuels may have financed the UAE’s economic boom, but it is the millions of migrant workers who have built its skyscrapers and shopping malls. While Emirati citizens enjoy free healthcare, free university education, heavily subsidised water and energy, and zero income tax, the 85% of the population who are migrants receive almost no social support whatsoever.
Segregated into work camps, with few legal rights and little redress against abuse, these mostly South Asian labourers are barred from forming unions, collective bargaining or striking. Hundreds die from heat stress every year.3 Social and gender inequality also still pervade Emirati society, with women requiring permission from male guardians to marry, and homosexuality a capital offence. 4
UAE’s low standards of inclusive governance flow from its status as a federal absolute monarchy. Political parties are banned and transfer of power and positions is hereditary; citizens can expect little input into government or the policymaking process. Perversely, this democratic vacuum has led to some experimentation with consultative structures for engaging the private sector and corporate actors in green policy-making.
Overcoming the legacy of oil and dismantling the Emirati system of legal and economic segregation will not be easy. But the UAE has already seen one radical economic transformation. Perhaps the next is already underway.
Policy Scores
Last updated 28 Dec 2024
Green COVID-19 Recovery
The COVID-19 pandemic and subsequent drop in international oil prices have adversely impacted the economy of the United Arab Emirates (UAE). In response to the immediate health and economic crisis, the government introduced a series of relatively small stimulus recovery measures totalling approximately USD$8.7 billion or 2.8% of GDP according to the IMF. Stimulus announced at the federal level, as well as by individual emirates governments including Abu Dhabi and Dubai, during 2020 has not incorporated any substantive measures for a green and low carbon economic recovery. These stimulus packages introduce a raft of untargeted measures designed to support existing, largely carbon-intensive industries and the economy in the broadest sense - implying the continuation of negative environmental impacts from UAE's high dependence on export revenues from oil and gas.
Measures include reducing a wide range of government fees and charges to cut business costs, providing credit guarantees and liquidity support to SMEs, deferring commercial lease payments and accelerating major infrastructure projects. Unconditional support is provided to existing environmentally harmful industries through cancelled rental/docking fees for shipping and aviation, alongside providing indirect support to fossil fuels (worth over USD$1.4 billion) in the form of electricity subsidies. At the level of individual emirates, the Ras Al Khaimah governments stimulus package includes providing companies with access to a tree-planting offset scheme as an alternative to payment of environmental fines incurred before March 2020. Without details on the severity of environmental violations and tree compensation requirements, the environmental impact of the scheme is unclear; but could be negative. Taken alongside fine and fee reductions of up to 50% for extractive industries (including cement factories), it seems likely that it forms part of general loosening of existing, limited environmental penalties and restrictions.
Overall, the UAE's stimulus has reinforced business as usual activity, with no green measures, investments or support for a green recovery apparent in economic support packages to date. While the government has announced a longer-term stimulus plan, prioritising investment in the digital economy (5G, telecommunications and future industries) and aims to support a "sustainable development path" in its third and final phase, details of the budget commitments and specific initiatives remain unknown.
The COVID-19 pandemic and subsequent drop in international oil prices have adversely impacted the economy of the United Arab Emirates (UAE). In response to the immediate health and economic crisis, the government introduced a series of relatively small stimulus recovery measures totalling approximately USD$8.7 billion or 2.8% of GDP according to the IMF. Stimulus announced at the federal level, as well as by individual emirates governments including Abu Dhabi and Dubai, during 2020 has not incorporated any substantive measures for a green and low carbon economic recovery. These stimulus packages introduce a raft of untargeted measures designed to support existing, largely carbon-intensive industries and the economy in the broadest sense - implying the continuation of negative environmental impacts from UAE's high dependence on export revenues from oil and gas.
Measures include reducing a wide range of government fees and charges to cut business costs, providing credit guarantees and liquidity support to SMEs, deferring commercial lease payments and accelerating major infrastructure projects. Unconditional support is provided to existing environmentally harmful industries through cancelled rental/docking fees for shipping and aviation, alongside providing indirect support to fossil fuels (worth over USD$1.4 billion) in the form of electricity subsidies. At the level of individual emirates, the Ras Al Khaimah governments stimulus package includes providing companies with access to a tree-planting offset scheme as an alternative to payment of environmental fines incurred before March 2020. Without details on the severity of environmental violations and tree compensation requirements, the environmental impact of the scheme is unclear; but could be negative. Taken alongside fine and fee reductions of up to 50% for extractive industries (including cement factories), it seems likely that it forms part of general loosening of existing, limited environmental penalties and restrictions.
Overall, the UAE's stimulus has reinforced business as usual activity, with no green measures, investments or support for a green recovery apparent in economic support packages to date. While the government has announced a longer-term stimulus plan, prioritising investment in the digital economy (5G, telecommunications and future industries) and aims to support a "sustainable development path" in its third and final phase, details of the budget commitments and specific initiatives remain unknown.
Governance
National green economy plan
Key legislation includes the Green Agenda 2015-30 (2015), which mandates annual State of the Green Economy reports, and the National Climate Change Plan (2017), both reasonably well-aligned with the UN Sustainable Development Goals. However, the macroeconomic analysis that underpins the Green Agenda was conducted in 2013, has not been updated since, and has never been publicly released. Meanwhile the climate plan lacks any carbon reduction targets or commitments.
Key legislation includes the Green Agenda 2015-30 (2015), which mandates annual State of the Green Economy reports, and the National Climate Change Plan (2017), both reasonably well-aligned with the UN Sustainable Development Goals. However, the macroeconomic analysis that underpins the Green Agenda was conducted in 2013, has not been updated since, and has never been publicly released. Meanwhile the climate plan lacks any carbon reduction targets or commitments.
Inclusive governance
Dialogue with the private sector is becoming more prevalent, and environment and business councils established for consultation. However, trade unions, collective bargaining and strikes are all illegal under UAE law. The Ministry of Labour can force workers to return to work, and migrant labourers who strike can have their work permits cancelled and be deported.Freedom of association is severely restricted, and state censorship of civil society is pervasive. Media is subject to strict censorship; criticism of the government is a punishable offence.
Dialogue with the private sector is becoming more prevalent, and environment and business councils established for consultation. However, trade unions, collective bargaining and strikes are all illegal under UAE law. The Ministry of Labour can force workers to return to work, and migrant labourers who strike can have their work permits cancelled and be deported.Freedom of association is severely restricted, and state censorship of civil society is pervasive. Media is subject to strict censorship; criticism of the government is a punishable offence.
SDG business strategy
The UAE 2018 voluntary SDG progress report outlined the importance of engaging the private sector, but the country still lacks a tangible or specific SDG business strategy.
The UAE 2018 voluntary SDG progress report outlined the importance of engaging the private sector, but the country still lacks a tangible or specific SDG business strategy.
Wealth accounting
Poor. The Federal Competitiveness and Statistics Authority has been repeatedly restructured and reorganised over recent years, leading to confusion over even basic metrics like population and GDP, and there are no current plans to explore national wealth accounts or natural capital approaches.
Poor. The Federal Competitiveness and Statistics Authority has been repeatedly restructured and reorganised over recent years, leading to confusion over even basic metrics like population and GDP, and there are no current plans to explore national wealth accounts or natural capital approaches.
Finance
Green finance plan
An area of positive momentum for UAE, which is seeking to becoming a leader in global green financial policy with the Dubai Declaration on Sustainable Finance (2016) the State of Green Finance Report (2017), and the Abu Dhabi Sustainable Finance Declaration (2019). Green bonds also an area of strong commitment and growth, with commitments to invest US$10 billion over 10 years in sustainable financing according to Green Bond Principles.
An area of positive momentum for UAE, which is seeking to becoming a leader in global green financial policy with the Dubai Declaration on Sustainable Finance (2016) the State of Green Finance Report (2017), and the Abu Dhabi Sustainable Finance Declaration (2019). Green bonds also an area of strong commitment and growth, with commitments to invest US$10 billion over 10 years in sustainable financing according to Green Bond Principles.
Green fiscal & monetary policy
In theory two bodies exist to review government policy for sustainability, but considerable confusion over mandate, remit and levels of activity and ability to enforce plans across the broader economy. Minimal engagement with monetary policy.
In theory two bodies exist to review government policy for sustainability, but considerable confusion over mandate, remit and levels of activity and ability to enforce plans across the broader economy. Minimal engagement with monetary policy.
Safe & accountable banks
Consistent stress tests organised by the central bank, but only according to financial indicators, with no social or environmental elements. Some central bank engagement with environmental sustainability thanks to the Dubai and Abu Dhabi sustainable finance declarations.
Consistent stress tests organised by the central bank, but only according to financial indicators, with no social or environmental elements. Some central bank engagement with environmental sustainability thanks to the Dubai and Abu Dhabi sustainable finance declarations.
Pricing carbon
Carbon taxation or carbon trading not under consideration. Without a target for reducing carbon emissions, a national price on carbon will not be systematically pursued.
Carbon taxation or carbon trading not under consideration. Without a target for reducing carbon emissions, a national price on carbon will not be systematically pursued.
Sectors
Green sectoral policy plan
Sectoral planning and implementation on the Green Agenda is divided across several ministries, with multiple plans; split jurisdiction between climate and energy is a source of potential confusion (see also 2.2 above). However, SDG work is coordinated by a cross-governmental committee, and numerous individual sectoral plans covering water, energy, fisheries, sustainable consumption, green buildings etc.
Sectoral planning and implementation on the Green Agenda is divided across several ministries, with multiple plans; split jurisdiction between climate and energy is a source of potential confusion (see also 2.2 above). However, SDG work is coordinated by a cross-governmental committee, and numerous individual sectoral plans covering water, energy, fisheries, sustainable consumption, green buildings etc.
Small business support
All business support policies are geared towards large businesses, leaving limited (if any) support for SMEs, green or otherwise. Significant barriers to start-ups include prohibitively high costs to obtain trade licenses, high regulatory burden, and no legal form for social enterprise.
All business support policies are geared towards large businesses, leaving limited (if any) support for SMEs, green or otherwise. Significant barriers to start-ups include prohibitively high costs to obtain trade licenses, high regulatory burden, and no legal form for social enterprise.
Carbon budgeting
Carbon budget not currently considered; the UAE had no carbon reduction plans or emissions targets of any kind until June 2018, when a goal of reducing CO2e by 16% to 2021 was announced.
Carbon budget not currently considered; the UAE had no carbon reduction plans or emissions targets of any kind until June 2018, when a goal of reducing CO2e by 16% to 2021 was announced.
Clean energy policy
The 2017 Energy Strategy 2050 sets long-term targets of 50% clean energy including nuclear by mid-century, with an interim goal of 27% by 2021. However, current targets and policy are cautious, given the UAEs world-leading solar resources and booming national investment in solar technology.
The 2017 Energy Strategy 2050 sets long-term targets of 50% clean energy including nuclear by mid-century, with an interim goal of 27% by 2021. However, current targets and policy are cautious, given the UAEs world-leading solar resources and booming national investment in solar technology.
People
Green jobs
A strong green jobs policy is acknowledged as a key component of UAEs planned green diversification, and the Ministry of Climate Change and Environment has produced job growth projections, recommendations for supply-side policies to catalyse green job growth, and new research. No specific targets for job numbers however, and the extent to which marginalised non-citizens are included in green jobs planning is questionable.
A strong green jobs policy is acknowledged as a key component of UAEs planned green diversification, and the Ministry of Climate Change and Environment has produced job growth projections, recommendations for supply-side policies to catalyse green job growth, and new research. No specific targets for job numbers however, and the extent to which marginalised non-citizens are included in green jobs planning is questionable.
Pro-poor policy
The UAE runs a remarkably generous welfare state, but only for Emirati citizens who make up only around 15% of the population. The rest including millions of virtually rightless migrant labourers receive no state assistance. There is no government policy on poverty reduction, let alone environmentally conscious pro-poor projects.
The UAE runs a remarkably generous welfare state, but only for Emirati citizens who make up only around 15% of the population. The rest including millions of virtually rightless migrant labourers receive no state assistance. There is no government policy on poverty reduction, let alone environmentally conscious pro-poor projects.
Participatory policymaking
A 1-year consultation process helped to develop the Green Agenda 2030, but gender elements were limited, and no consultation of marginalised communities including migrant labourers. No consistent assessment of social impacts, although SDG initiatives are introducing annual review commitments, and youth engagement is a priority area. Independent assessment of government policy from civil society groups or NGOs, for example is not tolerated.
A 1-year consultation process helped to develop the Green Agenda 2030, but gender elements were limited, and no consultation of marginalised communities including migrant labourers. No consistent assessment of social impacts, although SDG initiatives are introducing annual review commitments, and youth engagement is a priority area. Independent assessment of government policy from civil society groups or NGOs, for example is not tolerated.
Innovative social protection
No programmes, pilot schemes or research planned for increasing social protection or widening access to green economy; the government has prioritised the welfare of citizens, but even the social protection available to Emiratis does not consider specifically green economy factors.
No programmes, pilot schemes or research planned for increasing social protection or widening access to green economy; the government has prioritised the welfare of citizens, but even the social protection available to Emiratis does not consider specifically green economy factors.
Nature
Ocean & land conservation
A national biodiversity strategy and action plan in place, with five strategic guidelines and 21 national targets, including several covering SDGs 14 &15. However, policies are only valid to 2021 and so the 2020 Convention on Biological Diversity will be an important opportunity to increase ambition. Green Agenda 2030 also includes SDG commitments.
A national biodiversity strategy and action plan in place, with five strategic guidelines and 21 national targets, including several covering SDGs 14 &15. However, policies are only valid to 2021 and so the 2020 Convention on Biological Diversity will be an important opportunity to increase ambition. Green Agenda 2030 also includes SDG commitments.
Natural capital accounts
Full natural capital accounts planned, based on expanding existing deep water, coastal and marine accounts, but the process is yet to start. Some ecosystem services evaluations carried out by NGOs and private firms, but little analysis of social or environmental capitals and no national policies yet in place.
Full natural capital accounts planned, based on expanding existing deep water, coastal and marine accounts, but the process is yet to start. Some ecosystem services evaluations carried out by NGOs and private firms, but little analysis of social or environmental capitals and no national policies yet in place.
Natural capital committee
Natural capital work is still in its very early stages (see 5.2 above) and no commission or similar body is currently planned. Ongoing feasibility studies are expected to recommend governance mechanisms, perhaps through existing agencies.
Natural capital work is still in its very early stages (see 5.2 above) and no commission or similar body is currently planned. Ongoing feasibility studies are expected to recommend governance mechanisms, perhaps through existing agencies.
Nature-based fiscal reform
Fuel subsidies have been somewhat reformed, but energy and water are still heavily subsidised and there are no fiscal policies related to natural capital; emerging natural capital studies have yet to result in new taxes, fees or penalties.
Fuel subsidies have been somewhat reformed, but energy and water are still heavily subsidised and there are no fiscal policies related to natural capital; emerging natural capital studies have yet to result in new taxes, fees or penalties.
References
- https://www.thenational.ae/lifestyle/motoring/from-a-bugatti-to-lamborghinis-the-supercars-of-the-uae-police-in-pictures-1.738842
- http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Country=AE
- https://www.theguardian.com/global-development/2019/oct/03/workers-at-dubai-expo-2020-heat-stress
- https://www.theguardian.com/th...