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Investing to address climate change

Climate change
(File photo: Jordan News)
Climate change

Hamzeh S. Al-Alayani

The writer is a board member of a Jordanian public-sector government investments management company and a regular commentator on regional energy and industrial matters.

For Jordan to achieve climate-compatible growth, governments need to pursue fiscal and structural reforms that support low greenhouse gas emissions, and resilient investments backed up by efficient, cost-effective climate policies. اضافة اعلان

Water scarcity, rising temperatures, and extreme weather conditions should push Jordan to become more resource-efficient and competitive. Investing in the greening of infrastructure and services creates jobs and economic value. Upscaling requires coalitions of public, private, and civil society actors with similar goals and motivations.

The Organization for Economic Co-operation and Development estimates of the global infrastructure financing gap are roughly $6.3 trillion, with an additional $0.6 trillion per year needed to make investments compatible with climate goals between now and 2030. The private sector could help close this financing gap through increased use of public-private partnerships (PPPs). This requires that policymakers anticipate and address complexities in risk allocation between the public and private sectors.

When governments, capital market investors, commercial lenders, and businesses, from multinational corporations to small enterprises, work together toward climate resilience and mitigation, the result will be a more robust world economy.

The financial markets are only just beginning to see climate-related tailwinds, which means that investors have the opportunity to gain a first-mover advantage.

The public sector can direct investment and prevent possible bottlenecks by prioritizing specific infrastructure projects. The public sector will be able to fill the infrastructure gap only by mobilizing private sector expertise, and harnessing innovative thinking, investment capacity, and finance. PPPs are key to promoting investment in climate-smart infrastructure.

Taking advantage of opportunities to invest in natural assets could help nations become global innovators in a sustainable ecosystem. Scaling green PPPs can create a pipeline of bankable infrastructure projects that can help deliver regional infrastructure needs. By developing a robust PPP model for a single deal, and replicating it, costs could be spread, the impact enhanced, and programmatic, competitive tendering encouraged.

Investing in water is investing in the future; green, climate-friendly investment entails creating infrastructure that delivers clean drinking water and reliable sanitation, as well as managing water resources and risks.
Co-locating supply and demand helps overcome the specific challenges of the agriculture value chain, and simultaneous development of production, storage, and transport, de-risk investment and drive self-reinforcing growth.
Water can support more environment-friendly agriculture, such as hydro- and aquaponic food production. Furthermore, the irrigation technology has integrated soil and plant data to direct measured doses of water to optimize yield while reducing water consumption and fertilizer usage by 40 percent.

Investing in Jordan’s agricultural production and value chains can help serve a growing local market and contribute to enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.

Co-locating supply and demand helps overcome the specific challenges of the agriculture value chain, and simultaneous development of production, storage, and transport, de-risk investment and drive self-reinforcing growth.

A hydrogen economy requires governments to establish hydrogen clusters: areas where hydrogen production and consumption are developed, ensuring demand and supply scale. The clusters will decarbonize energy uses that cannot be electrified. Net zero energy mixes will include hydrogen on a far larger scale than today. Global hydrogen use is expected to grow five to seven times, to account for 15–20 percent of energy demand, and global hydrogen investment in 2020–50 could total $15 trillion.

Aqaba has an excellent opportunity to turn this around and regain its competitive edge, minimize its environmental impact, become a more attractive city to live and work in, and develop a strong sense of character and identity in the region. Climate change investment would accelerate mobility, environment, and urbanization of Aqaba’s future livability and resilience.

These opportunities could be spearheaded by start-ups seeking funding for innovations. Differing return profiles create an opportunity for diversification of investment in low-carbon, environmental goods and services sectors, areas that support building the skills and knowledge of women, and youth, to increase their employability and support the transition to green employment.


Hamzeh S. Al-Alayani is a board member of a Jordanian public-sector government investments management company and a regular regional energy and industrial commentator.


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