Climate change poses grave macroeconomic risks for nations and regional financial firms in MENA. Greater investment in sustainable infrastructure and awareness of climate issues will be imperative to mitigate the effects of water scarcity and rising temperatures across the region.
The Middle East and North Africa (MENA) is one of the most water-scarce, hottest regions in the world and is particularly vulnerable to climate change. A shift in the availability and abundance of natural resources could spark economic decline, labor migration, and civil conflict.
Looking ahead to the Paris climate change conference at the end of November, Gulf nations are likely to continue to push for greater investment on sustainable development projects, seeking to boost economic resilience in light of environmental changes.
Key Impacts of Climate Change
The effects of climate change in MENA are already visible and are like to continue to impact long-term political risks in the region.
A recent study published by Nature Climate Change projects that by the end of the century temperatures in the Middle East will be too hot for human beings to survive. Outdoor activities will be “severely impacted” by the extreme temperatures, especially agriculture and tourism, two key staples of domestic economies in the region.
Rising temperatures are also likely to speed up the effects of drought, currently one of the biggest environmental challenges facing the region. The World Resource Institute (WRI) says 14 of the world’s 33 most water-stressed countries are in the Middle East and North Africa region, including Bahrain, Kuwait, Qatar, the United Arab Emirates, Palestine, Israel, Saudi Arabia, Oman, Iran, and Lebanon.
Source: World Resource Institute
Experts also point out that rising temperatures could affect critical infrastructure in cities near sea level. Low-lying coastal areas in Tunisia, Qatar, Libya, UAE, Kuwait, and Egypt are at particular risk.
In the case of Alexandria, Egypt, for instance, a 0.5-meter rise would leave more than 2 million people displaced, with $35 billion in projected losses in land, property, and infrastructure.
Income and employment are also likely to be impacted as a result of more frequent droughts in rural areas, and flooding and sea surges in urban and coastal areas.
Mitigating Long Term Risks
Conflict and the rising threat of terrorism in the region has dominated government agendas over the last decade, but some Middle East nations have also made climate change a priority.
The U.A.E. and Morocco are the most active when it comes to environmental issues. The U.A.E. government invests heavily in renewable energy deployment and research, and is a leading voice within the Arab Group negotiating bloc on climate issues.
Morocco has also demonstrated a strong commitment to sustainability and is building one of the world’s largest solar energy plants in the Sahara desert.
Looking ahead to the 2015 United Nations Climate Change Conference (COP21) in Paris at the end of November, Middle East nations are likely to be actively engaged in discussions.
GRI spoke with a U.S. State Department official close to the conference who explained that Arab Group positions will likely focus on drought and oil revenues. Oil production is a particularly controversial topic, as it remains a staple of Gulf economies.
While the conference is not likely to address specific regional topics during formal discussions, the official noted that if a durable agreement on global climate change is reached in Paris, it would seek to mitigate climate change and its many impacts, including problems like drought.
Climate to Conflict
Increasing literature points to the fact that long-term consequences of climate change can ignite a volatile mix of underlying causes that can often lead to conflict.
Climate change can act as a threat multiplier, adding resource pressure on local societies by fueling labor migration and unemployment changes. The inability of governments to effectively address these consequences creates a potential avenue for extremist ideologies seeking to fill institutional gaps.
Environmental issues, for example, played a key role in sparking the outbreak of the Syrian civil war. Between 2006-2010, Syria experienced a devastating drought, turning 60% of the country into in dry desert. Thousands of farmers were forced into penury as livestock perished and crops failed.
Rather than responding to the crisis with a plan to boost jobs and housing for newly displaced farmers in Syria’s major cities, President Bashar al-Assad cut food and fuel subsidies, adding to the misery of the migrants and stoking the flames for revolt. Overcrowding, poor infrastructure, unemployment, and crime engulfed major cities in Syria, serving as catalysts for protests.
U.S. Secretary of State John Kerry is a strong advocate for climate change issues in the region, emphasizing its relevance when it comes to regional conflict. “It would be better for all of us if I was exaggerating the urgency of this threat, but the science tells us unequivocally that those who continue to make climate change a political fight put us all at risk,” says Kerry.
In light of the Paris attacks and the upcoming climate change summit, world leaders must acknowledge the link between climate change and conflict as a way to further mitigate the risk of regional wars and terrorist ideologies. Climate change should continue being a priority for Middle East nations moving forward, especially as water resources begin to dwindle and temperatures begin to rise.
Gulf nations especially should continue leading the way for climate action, drawing on international expertise, devising supportive renewable energy policies and regulations to enhance investment in the renewable energy sector.
If ignored, climate change could instigate a ripple effect of profoundly negative consequences for political risk environments in the region and beyond.
