Conclusion

BOX 2.3

Carbon Wealth in the Middle East and North Africa and Its Potential Pitfalls (Continued)

the EU based on the emissions embedded in those products (EC 2021). The rationale for this carbon tariff is twofold: First, it would prevent carbon leakage and disincentivize consumers from switching to foreign suppliers, hence also protecting domestic production. Second, it would incentivize other countries globally to also decarbonize their value chains. However, even for those oil exporting countries in the Middle East and North Africa for which Europe is not a main trading partner, the EU’s transition away from fossil fuels and toward renewable energy sources will have an impact, if only a small one, because Europe accounts for around 20 percent of global crude oil imports.

The change in the European energy landscape will be incremental, with the European Commission projecting that about half the EU’s energy in 2030 will still be provided from fossil fuels. The use of coal must be substantially reduced by 2030, while most of the change in oil and gas demand will happen between 2030 and 2050.

The decades after 2030 will be characterized by lower demand in the EU for oil (dropping by almost 80 percent) and for gas (dropping by around 60 percent) (Leonard et al. 2021). Oil- and gas-producing countries will feel the repercussions through both the direct channel of lower exports and the indirect channel of lower global prices for fossil fuels. It is hence important for the Middle East and North Africa’s oil exporting countries—but also for its oil-dependent economies with carbon-intensive industries—to start changing their production base and their economic mix. One particularly promising way to do so is to intensify the expansion of renewable energy sources, for which the region holds great prospects (as further discussed within chapter 3’s “Policy Review” section).

economic risks, concomitant actions to reduce the carbon intensity of current processes and production patterns and to prepare for economic diversification are crucial to make Middle East and North Africa economies in general—but the oil exporting ones in particular—ready for a decarbonized future.

CONCLUSION

Blue skies will improve residents’ health and resilience in the Middle East and North Africa, reduce economic costs, and make the cities better places to live and work. Better air quality will reduce the impacts of respiratory diseases on lives and livelihoods. Those respiratory diseases include

COVID-1918 (whose severity is exacerbated by air pollution) and other diseases to which air pollution has been linked, including cardiovascular diseases, ischemic heart diseases, diabetes, kidney diseases, and many others.19

With better health, people become more resilient. Improved air quality benefits everybody but especially the poor, who often work outdoors. Air pollution can also decrease earnings, both when workers are unwell and when they must take time off to care for family members, including children, who are exposed to air pollution. With a large share of the workforce in the informal sector in many Middle East and North Africa economies (Gatti et al. 2014), these sick days are equivalent to lost income. Another concern for gender inclusion is that women generally assume responsibility for the care of sick relatives. Thus, women’s ability to work is particularly affected by family illness related to air pollution. Importantly, the benefits of better air quality are inclusive.

Reducing air pollution will also reduce the costs it incurs, which are upward of 3 percent of GDP in some of the region’s economies (as further discussed in chapter 3). Moreover, enhancing air quality can make countries more attractive to tourists (Łapko et al. 2020), while the ability to manage pollution will influence their ability to grow and hence a city’s competitiveness (Lozano-Gracia and Soppelsa 2019).

Key policies to improve air quality include a switch away from polluting fossil fuels (which also contribute to global warming); better public transportation and urban planning; and city greening—all elements of greener development and improved urban livability.

Blue seas, including well-managed coastlines and reduced plastic pollution, will increase the resilience and sustainability of coastal economies. Every Middle East and North Africa economy has a coastline; each has access to an ocean or a sea. Well-managed coastlines and marine ecosystems—free of plastic pollution—ensure the sustainability of coastal cities’ key economic sectors such as beach tourism, ports, and fisheries, as well as the jobs dependent on those sectors. They also increase the resilience of coastal areas to the impacts of rising sea levels from climate change. Improved solid waste management, including management of plastics, reduces the incidence of flooding by unblocking drainage channels, further increasing resilience.

Blue skies and blue seas also demonstrate the extent to which management of all aspects of natural capital are interconnected. Poor land management, an energy mix that is overdependent on fossil fuels, and poor urban and transportation planning damage air quality, public health, and productivity. The result is that the Middle East and North Africa’s skies are not blue. Poor management of water resources and water quality and inadequate management of solid waste and plastics reduce coastal resilience and the broader blue economy. The result is that the Middle East