How climate change can impact UAE industries

How climate change can impact UAE industries

By Rabiya Shabeeh

Published: Wed 26 Apr 2017, 3:40 PM

Last updated: Wed 26 Apr 2017, 5:50 PM

The UAE's society and economy have not just managed to survive but also thrive under its naturally enduring harsh environmental conditions, water scarcity, and intense heat. But should global temperatures continue to rise, the increased variability of climates and unpredictable patterns of extreme events that will follow could eventually exceed the coping capacity of many industrial sectors of the country. According to a report, UAE Climate Change: Risks and Resilience, released in March 2017 by the Emirates Wildlife Society and World Wildlife Fund (EWS-WWF), a two per cent increase in global temperature by 2050 will exact a heavy toll on at least a dozen sectors across the UAE.
"The UAE's efforts towards achieving economic diversification and the overall wellbeing of the population will be slowed down by climate change impacts if left unmanaged," stated the report. The report's release comes just months after the UAE ratified its commitment to the UN Framework Convention on Climate Change to reduce fossil-fuel based electricity production by incorporating a 27 per cent renewable energy mix by 2021.
The UAE was also the first of the GCC countries to ratify the Paris Agreement in December 2015 which pledged not to just keep warming "well below  two degrees Celsius",  but also to "pursue efforts" to limit warming to 1.5 degrees C by 2018.
Several researches including one carried out by Daniel Mitchell and others at Oxford University states the difference between 1.5 degrees and 2 degrees will be marginal in annual average temperatures but would have a significant impact on reducing the probability of destructive weather events like floods, droughts, and heat waves.
EWS-WWF's report elaborates on how changes in air and sea temperatures will lead to a multiplicity of secondary impacts in various sectors of the economy.
"Direct impacts of extreme weather events as well as slow-onset phenomena such as sea level rise, will likely cause disruption in the everyday functioning of transport and infrastructure, impact the value of real estate, and damage the tourism industry," it states.
The UAE is one of the world's fastest growing travel destinations that welcomed over 14.9 million travellers in 2016 and targets to reach 20 million tourists by 2020 as set out by Dubai's Department of Tourism & Commerce Marketing.
While more research is needed to project changes in tourism due to climate (currently the third most common attribute to tourists choosing a destination) changes - some studies predict a 55 per cent decline in tourism to the country by the end of the century should temperatures continue to rise, states the report.
"Many of the major tourism and heritage assets that draw tourists to the UAE are in the coastal zone and will be more vulnerable to increased flood risk due to sea level rise."
And the country's coast is not just commercially important to its tourism sector  - the Abu Dhabi Global Environmental Data Initiative estimated that the amenity supplied by Abu Dhabi's coastal and marine resources alone are currently worth approximately $141 million.
Climate change is also projected to impact the reliability of international food markets and ultimately destabilise food security in the UAE as, according to a report by the Abu Dhabi Global Environmental Data Initiative, about 87 per cent of UAE's food supply relies heavily on international food imports.
"Increased severity of weather events are likely to negatively affect production levels and raise food prices considerably by 2050 in many food-exporting countries, and will especially impact lower income expat households" says EWS-WWF.
The UAE also serves as a major regional hub for re-export of food commodities and thermal stress and floods resulting from the climate change could require re-export facilities that see higher costs and efficiency losses, the report adds.
Climate change spikes in temperatures and humidity will also decrease the productivity of outdoor workers and increase their overall risk, the report highlights.
Most companies with a large number of outdoor workers have a centralized framework of operational standards against which compliance is mandatory which this may require changes to adapt to the increase in higher temperatures.
Such consequences of climate change would not just slow down their respective sectors but leave an impact that will be "felt in the whole national economy and the financial sector, and magnified in the context of the global interconnected markets for goods and services" according to the report.
On national levels, climate change would cause fluctuations in many markets, changes in costs/revenues and capital expenditure of businesses, and higher depreciation rates of assets at risk and difficult or more costly to insure (especially in coastal areas) against climate change.
"These impacts could weaken the financial performance of debtors in the medium term, and thus potentially increase the number of non-performing loans  - an issue that has represented a major challenge for the UAE in recent years."  
The writer is a freelance journalist based in Dubai. Views expressed are her own and do not reflect the newspaper's policy

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