Mohieldin: Economies of Arab Countries Affected by Successive Global & Regional Crises

Dr. Mahmoud Mohieldin, UN Climate Change High-Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda said that facing the challenges of climate and development action in Arab countries requires enhancing investment in human capital, and developing policies and institutional legislation that incentivize the implementation of climate and development projects.

This came during his participation in the Third ERF GCC Conference entitled “GCC Economies in an Era of Energy Transition”, hosted by King Abdullah Petroleum Studies and Research Center in Riyadh, KSA, in a session attended by Dr. Ibrahim Elbadawi, Managing Director of ERF, and a number of economists, academics and representatives of governments and corporates from GCC countries.

Mohieldin stated that the economic situation of the Arab countries in general was affected by the successive global and regional crises, as well as the challenges of demographic transitions, urbanization, climate change, shifts in the global economy and the rapid technological development, in addition to geopolitical disturbances, the latest of which are the grievous events in Gaza Strip, which represents a continuous threat to stability and development in the region.

Mohieldin noted that the international community in general, including Arab region, needs to strengthen efforts to bring SDGs back on track, which requires more investment in human capital, support for health, education and employment services, and the implementation of economic diversification plans and financial reforms, stressing that achieving development helps achieving stability in various societies, countries and regions.

Mohieldin pointed to the negative impact of climate change on the Arab region in particular, which is witnessing an increase in temperatures exceeding the average of global warming, explaining that climate change negatively affects the economy and the financial sector and increases the risks that threaten GDP of countries.

“COP27 in Sharm El Sheikh confirmed that development action and climate action are integral, and that financing of climate projects is financing for development.” Mohieldin said, adding that the conference also dealt with the file of climate finance in a comprehensive way, stressed the need to mobilize finance from its public, private, domestic and external resources.

Mohieldin also stressed that fixing climate and development finance crisis should not exacerbate the debt crisis in developing countries and emerging economies.

The climate champion said that Egypt succeeded during the conference in rebalancing the climate action as stipulated in Paris Agreement by launching the Loss and Damage Fund, and placing the file of climate adaptation on the global climate action map by launching Sharm El Sheikh Adaptation Agenda (SAA), which includes key areas of action that achieve climate and development goals, namely food and agriculture, water and nature, coasts and oceans, human settlements, and infrastructure, pointing out, in this context, the extreme importance of SAA for Arab countries and societies.

He added that COP27 focused on strengthening the regional and local dimensions of climate action through the launch of two pioneering initiatives, the Five Regional Roundtables Initiative, launched by the Egyptian presidency of the conference in cooperation with the UN regional economic commissions and HLCs, which aimed to find investable, bankable and implementable climate and development projects.

The second initiative, according to Mohieldin, is the National Initiative for Smart Green Projects (NISGP) launched by the Egyptian government under the direct auspices of President Abdel Fattah El-Sisi, and is implemented according to a regulatory framework developed by Prime Minister Dr. Mustafa Madbouly, explaining that the initiative succeeded in raising awareness of climate and development issues, and contributed to drawing an investment map in all governorates through a large number of projects that rely on sustainability and technology.

Mohieldin stressed that the implementation of climate action requires the mobilization of $2.4 trillion annually, of which $1.4 trillion must be collected from domestic funding resources, explaining that bridging the climate finance gap requires the implementation of innovative finance mechanisms, debt swaps for investment in nature and climate, and the establishment of carbon markets in developing countries such as the African Carbon Markets Initiative (ACMI) launched during the Sharm El Sheikh conference, as well as the need to reform IFIs and MDBs to enhance their capital, and adopt more effective policies for concessional finance.

Mohieldin stated that COP28 will promote efforts to reduce carbon emissions by accelerating the process of just energy transition that includes phasing out fossil fuels and investing in renewables while taking into account the socioeconomic impacts of this process. The conference will also work to put nature at the heart of climate action, and mobilize for more inclusive climate action, as well as showcasing the results of the first GST.