Oil in a Low-carbon Economy

When it comes to the subject of energy in the Middle East, we instinctively think of oil -- the black gold that has been the source of stable and healthy economies in the region. Nevertheless, this is about to change. With the lead up to the United Nations Climate Change Conference in Copenhagen, Governments are realizing the imminent threat of climate change, and that there is no choice but to act fast. According to the "2009 World Economic and Social Survey: Promoting Development, Saving the Planet",1 we need to transform our economy similar to a wartime setting. When United Nations Secretary-General Ban Ki-moon announced that he will convene an unprecedented Climate Change Summit at UN Headquarters on 22 September 2009, he said that we have less than ten years to halt the rise in greenhouse gas emissions if we are to avoid catastrophic consequences for people and the planet. Small Island Developing States that are under the threat of rising sea levels are calling for a peak in emissions by the end of 2010, and to stabilize greenhouse gas concentration at 350 parts per million (ppm) CO2 equivalent as fast as possible.
This rapid transformation has of course raised tremendous concern in the oil-rich countries of the Arab region, whose economies are mainly dependent on oil trade. The cost of climate change is too high to accept. Even the Arab region will suffer, especially with agriculture and water resources. Sea level rise will also threaten many low-lying countries and agricultural areas in the region, such as Bahrain, Qatar, the United Arab Emirates and the Nile basin. Lebanon is currently battling with increased forest fires that are devastating its forests. Therefore, the overall transformation of our societies to a low-carbon economy needs to happen. The question for the region should be, "What is our role in the campaign for a low-carbon economy?"
Although the region is the main supplier of the world's oil, it still has one of the richest areas to generate renewable energy. If only around one per cent of Arabian deserts are used to produce solar energy, it can supply Europe, Africa and most of Asia with clean solar energy. This concept is not new, and there have already been reports and studies on how to make this happen, including foundations such as the DESERTEC Industrial Initiative, which aims to analyze and develop the "technical, economic, political, social and ecological framework for carbon-free power generation in the deserts of North Africa and the Middle East". The DESERTEC concept focuses mainly on one technology, concentrated solar thermal power (CSP), which uses huge mirrors to concentrate sunlight on one spot to create heat, which in turn produces steam to drive a turbine that generates electricity. In the future, solar power plants like these will be constructed all over the deserts of North Africa and the Middle East, and several pilot projects have already started. In July 2009, twelve major European companies signed a memorandum of understanding2 in Munich to start the DESERTEC Initiative. Although these initiatives are mainly aimed at providing solar energy to Europe, they can easily be expanded, and a super-smart electrical grid created to transport solar energy to African and West Asian countries.
The Arab region could therefore continue to play a key role in the energy sector in the future, and the strength of this role will be determined by the decisions it takes now. The first to invest in developing CSP technology will benefit from selling the technology or the energy generated by it in the future, similar to what wind energy technology did for some European countries. Renewable energy brings a unique opportunity to the Arab region. If the newly industrialized oil-exporting Arab countries invest their healthy revenues from oil trade into solar technology, they will not only help save life on the planet from climate change, but also ensure that their economies will benefits from exporting clean solar energy. At the same time, this will help them diversify their economy, and prolong the life of their oil, which will become even more valuable in the future.
Some oil-exporting Arab countries are starting to see this opportunity. The United Arab Emirates is becoming one of the leaders in the development of renewable energies, establishing the Masdar Initiative3 which aims at developing the first carbon-neutral, zero-waste city. This initiative attracted renewable energy researchers and developers from across the globe. Masdar is now also the headquarters of the International Renewable Energy Agency (IRENA), an intergovernmental agency aiming to be the main driver to promote renewable energy deployment on a global scale. Deciding on the United Arab Emirates as the hub for renewable energy shows that Governments are recognizing the role that the region can play in the renewable energy sector.
In the transition from fossil fuels to renewable energy, the Arab region can also play an important role. It is unlikely that the world will be able to switch from oil and coal to renewable energy as fast as needed. There will be a transformational period, where many countries will still need to expand their energy production. This is especially true in emerging economies like China and India, where the demand for energy is growing fast. In these countries there will still be a need to construct conventional power plants. Nevertheless, the choice of fuel can make a big difference. If these countries opt for natural gas -- the cleanest of the fossil fuels -- as a way to produce electricity, they will reduce emissions by a substantial amount. Natural gas produces more than 30 per cent less carbon dioxide than coal when combusted. Therefore, during the transformational period, natural gas power plants should have a higher priority over those producing coal and oil. Here, again, the Arab region has an important role to play: Qatar is estimated to have has the third largest natural gas reserves, followed by Saudi Arabia and the United Arab Emirates in the fourth and fifth place respectively, while Algeria and Iraq come in ninth and tenth.
No matter what the future holds, the Arab world will continue to play an important role in providing the planet with energy. Choosing whether this energy will be produced in a clean and sustainable way that will insure the planet against climate change does not depend on the region alone, but also on world leaders. The opportunity to do so is only a month away in Copenhagen.

Notes 1 http://www.un.org/esa/policy/wess/wess2009files/wess09/wess09pressreleases/pr_en.pdf
2 http://www.desertec.org/en/press/press-releases/090713-01-assembly-desertec-industrial-initiative/
3 http://www.masdar.ae/en/home/index.aspx