The Gulf Cooperation Council (GCC) member states have initiated measures to boost their green economies. The UAE has allocated over $40 billion for clean energy investments, intending to invest an additional $163.5 billion further. Meanwhile, Saudi Arabia has introduced a $500 billion initiative to construct a new mega-city powered by renewable energy.
According to a recent report from Century International Holdings, adopting green and sustainable projects has the potential to double the gross domestic product (GDP) of Gulf countries to reach $13 trillion by the year 2050.
The Gulf Investment Report 2023 has indicated that the combined GDP of GCC states has already crossed the $2 trillion milestone, with an initial projection to reach $6 trillion by 2050. Also, the report suggests that by adopting a green growth strategy, these countries could achieve a GDP of $13 trillion by 2050.
One of the key areas that the GCC states can focus on is the production of green and blue hydrogen.
The region also stands to capture up to $300 billion in foreign direct investment (FDI) if it promptly positions itself as the central hub for global value chains (GVC) currently realigning toward more robust and sustainable industries.
According to Issam Abou Sleiman, the Regional Director of the World Bank in the MENA region, the GCC economy expanded by 7% last year, with Saudi Arabia playing a leading role in this growth. The shift towards a low-carbon economy has gained momentum, driven by elevated oil and gas prices and the imperative for enhanced energy security, particularly in the aftermath of the Russia-Ukraine conflict.
“The region also has the potential to be a lead producer of green and blue hydrogen. With the right regulations, policies, and investments to support the transition,” Sleiman says. “GCC countries can emerge with stronger, more sustainable economies that generate rewarding jobs for their youth while simultaneously protecting the planet.”
As per Strategy&, the GCC region is in a promising position to emerge as a worldwide leader in the green economy. The area boasts ample renewable energy sources, including solar and wind power, and benefits from its strategic location at the crossroads of global trade routes.
However, the report highlights that the GCC states must take further action to expedite their transition towards a green economy. This entails increased investments in research and development, establishing green infrastructure, and formulating a conducive regulatory framework.