Efforts Towards Constructing A Gulf Carbon Market Report By Justin Dargin

By Author: Justin Dargin
Total Articles: 4
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The Gulf countries are now taking serious first steps in the fight against climate change. Of late, a number of GCC nations undertook multi-billion dollar investment plans, in an effort to be identified as “green.”

In 2007, Qatar received the dubious distinction of being singled out by the annual United
Nations Development Programme (UNDP) Human Development Report for the highest per capita carbon emissions in the world, estimated to be at 79.3 tons per capita.7 As with most Gulf countries, Qatar’s extremely high emissions result from the confluence of large oil and gas sectors and a relatively small population. In a bid to change its global image, Qatar became the first GCC member to join the World Bank’s Global Gas Flaring Reduction (GGFR) project. The objective of the project is to reduce emissions by exercising tight controls on gas flaring, which, in fact, is a major contributor to the region’s CO2 emissions.

Also in this vein, Abu Dhabi launched a $15 billion (US) future energy initiative house in the
Emirate’s Energy City, as it endeavored to construct the world’s first “zero ...
... pollution, zero waste city.” The company commissioned to carry out its vision is the Abu-Dhabi based Masdar Company
(Masdar), which plans to leverage funds to produce a clean energy portfolio for investment in clean energy technology across the Middle East and North Africa.

To further capitalize on the synergy developed by the initiative, Masdar announced a plan to
Strategically construct regional carbon capture storage facilities in the Gulf. These plans were
Initially designed to take advantage of a carbon trading exchange that was to commence in
Dubai in 2009. Most regional plans were, however, derailed with the late 2008 financial crisis. At the time of writing, the bulk of these plans remain on hold.

One of the major projects to change the way that Gulf states emit greenhouse gases is reflected in the UAE-Bahrain carbon captures agreement. On July 23, 2008, Masdar signed a strategic agreement with Bahrain’s Gulf Petrochemical Industries Company (GPIC) to jointly reduce greenhouse gas emissions under the United Nations’s Clean Development Mechanism, and, thereby, earn CER certificates for sale on the open market to firms in industrialized nations.

Before the global financial crisis unfolded, the Gulf hosted two competing plans to develop carbon emissions trading platforms. A project in Dubai was to be built jointly by the state-run Dubai
Multi Commodities Centre (DMCC) and the London-listed carbon credit company EcoSecurities no later than the end of 2009. And the other proposed exchange was to be built in Doha, Qatar, by the Doha Bank in 2009. Each project was to make its respective country the regional hub of global carbon credits trading and to take advantage of the burgeoning carbon capture projects that could potentially earn CER certifications under the UN Clean Development Mechanism.

Justin Dargin is a Research Fellow with The Dubai Initiative and a Fulbright Scholar of the Middle East. Justin Dargin is a specialist in International Law and Energy Law, and a prolific author on energy affairs.