UAE needs $671 billion for transition to climate neutrality

The UAE needs at least $671 billion for transition to climate neutrality, and it is well positioned to benefit from the main economic opportunities on the path, Standard Chartered Bank said.

In a study entitled “Just in Time,” which it conducted to measure the financing requirements required for the transition to climate neutrality in emerging markets and how to finance them, the bank explained that if the financing required for the transition to climate neutrality is provided from developed markets, spending may rise households in the UAE increased by 2 trillion dirhams ($551.2 billion) compared to self-financing.

The study showed that while the value of the investments required to transition to climate neutrality in the UAE reached $671 billion, emerging markets as a whole need an additional investment of $94.8 trillion to move to climate neutrality, noting that this amount was higher than the annual global GDP, at a time when there has been an urgent need to meet long-term global warming goals, and this is in addition to the capital already allocated by governments under their current climate policies.

The study announced that private sector investors can contribute more than $83 billion out of the required total investment, which confirms the urgent need for financial institutions to fulfill green and transitional financial pledges in terms of strategy, financing and public policies for the transition to climate neutrality, as well as the importance of banks fulfilling the commitments, they made during the United Nations Conference on Climate Change (COP26) if they want to avoid families from bearing the costs of the transition to climate neutrality.

UAE Placed Comfortably

In her comments, Rola Abu Manneh, CEO of Standard Chartered Bank in the UAE, said that the Emirates enjoyed a leading position and was all set to benefit from the main economic opportunities offered on the path to achieve climate neutrality.

She also noted that reaching this goal requires a strong focus on Ensuring economic prosperity during the transition process plus a significant amount of investment.

“The public and financial sectors must unite to help facilitate the flow of investment into climate neutrality, as failure to provide transition financing may lead to the failure to achieve the required climate goals, which will lead to an environmental catastrophe,” she said.

She said that Standard Chartered announced its commitment to reach climate neutrality in its financed emissions by 2050, with interim targets for the carbon-intensive sectors by 2030.

She also announced that the Bank plans to mobilize more than $300 billion of green and transitional financing by 2030 to support the government transition to achieve climate neutrality in accessible markets, with support from its Transitional Financing Framework.

The bank was working to accelerate the provision of new solutions, by setting up a specialized team working to expedite the transition to climate neutrality and support customers in high-emissions sectors.