Green finance has potential to unlock $2trln GDP, over 1mln jobs in GCC states
GCC governments have the potential to unlock $2 trillion in cumulative GDP contribution, more than 1 million jobs and foreign direct investment in sustainable industries through green finance, a new report said.
According to Strategy&, Middle East, part of the PwC network, this could come about by the bloc developing the right structure and mechanisms for green finance.
"While all GCC countries have already begun their respective sustainability journeys, policymakers must act decisively and in a differentiated manner to capture the largest share of the economic prize," it said in a report entitled "Middle East Green Finance: A $2 Trillion Opportunity."
The consulting firm advises governments to focus on four priorities:
- Enact policies that promote environmental sustainability in all industries
- Create a green sovereign wealth fund
- Strengthen capital markets
- Develop standardized and transparent reporting mechanisms for environmental performance
Aurelien Vincent, Partner with Strategy& Middle East, said: "Investors around the world are pouring capital into projects with a strong environmental, social, and governance (ESG) angle. Our analysis has found that green investments in six key GCC industries could have a profound socioeconomic impact that has the potential to create over 1 million skilled jobs and turbocharge foreign direct investment in highly sustainable industries.”
GCC countries, which have some of the highest solar exposures in the world, have the solar advantage too. A solar-photovoltaic panel in a GCC country produces twice as much output as it would in Germany or any climatically similar European country - 1,750 to 1,930 hours of full-load operation per year.
In addition, there are clear opportunities in green hydrogen where production technologies are easily accessible, reducing barriers to entry, the report said.
"Based on our global supply and demand analysis, exporting countries can potentially capture a market of approximately 200 million tons of green hydrogen by 2050, worth $300 billion yearly. The green hydrogen export market can also create 400,000 operations and maintenance jobs,” said Anthony Yammine, Principal with Strategy& Middle East.
