A digital, solarized vision for the UAE

The first virtual Abu Dhabi Sustainability Week (ADSW) Summit 2021, broadcast live around the world in English and Arabic on January 19, attracted over 17,500 registrants from more than 175 countries. The event featured over 90 influential global leaders from government, business, and technology who explored the social, economic, and technological opportunities available in supporting a sustainable green recovery from the coronavirus pandemic.

During the summit, Gulf Cooperation Council (GCC) leaders reconfirmed their decarbonization pledges to save the equivalent of 354 million barrels of oil through the deployment of renewable energies. This represents a 23% reduction in oil consumption to reduce the power sector’s carbon dioxide emissions by 22%, according to the latest figures from the International Renewable Energy Association (IRENA).

In his opening address, H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advance Technology, Special Envoy for Climate Change and Chairman of Masdar, pointed out that with the coronavirus pandemic, society is now witnessing the implementation of digital currencies, artificial intelligence (AI), and blockchain technology worldwide. Accordingly, electrification, decarbonization, and digitalization initiatives have become increasingly important “across all industries.” He laid out what UAE is doing in this regard as follows:

Masdar’s solar energy initiatives

New digital technologies require a high consumption of electricity. In the UAE, this is currently predominantly generated from fossil fuels. However, the UAE’s zero emissions by 2050 commitment is heavily reliant on solar energy to diversify Abu Dhabi’s energy sector into renewable sources. Solar energy is seen as an anchor for Masdar’s renewable strategies from many perspectives.

For instance, green energy company Masdar is building the world’s largest solar power plant in Abu Dhabi, because deserts represent some of the best places on earth for harvesting solar power, boasting high levels of solar irradiation and being a rich source of silicon – the raw material for the semiconductors from which solar cells are made.

Another benefit to installing solar panels in the desert, according to a 2018 study, is that they may create a more humid environment which causes vegetation to spread in order to combat desertification.

Masdar City – UAE’s Aerospace & Tech Zone

Developed by Masdar, Abu Dhabi's Masdar City is one of the world's most sustainable urban communities, offering a strategic base through which companies can build their networks both locally and globally, to explore multiple investment opportunities and test innovative new technologies from inception to implementation to help the UAE diversify its economy.

Housing a free zone area, the city has more than 900 organizations – ranging from international giants to home-grown start-ups – that are developing innovative technologies in the areas of energy, water efficiency, mobility, space, blockchain, and artificial intelligence to address the world's most critical sustainability challenges in more than 30 countries.

Digital economy: The UAE Government has made the digitalization of its economy a priority to bring efficiency to government, creativity to industry, and international leadership. To accomplish this goal, it has established the world’s first graduate-level, research-based artificial intelligence (AI) university in Masdar City, The Mohamad bin Zayed University of Artificial Intelligence – MBZUAI, which welcomed its first students in January 2021.

The UAE has also adopted The Emirates Blockchain Strategy 2021 and The Dubai Blockchain Strategy which has already rolled out several blockchain projects. Emerging Fintech talent and MENA award winner and Blockchain developer Hardik Bhatia, for example, founded SustVest, a crowd-investing blockchain based platform that lets people invest in solar projects and earn returns from consumers who use their funding to put up solar panels. The company is based in Dubai Silicon Oasis Authority, which has built its solution on NEM Blockchain.

“The global rooftop solar segment is booming with opportunities and is valued at over $66 billion. Emerging economies are looking to transition to solar as it offers a green and cheap alternative to conventional energy sources. SustVest enables this transition in emerging economies by crowdfunding rooftop solar projects in emerging economies on its platform,” explained Bhatia.

He added, “We tokenize solar projects granular to the level of individual solar cells, and investors purchasing these tokens can earn dividends generated by the sale of electricity from these individual solar cells. We are opening the gates for retail investment into solar space, and we do so by tokenizing the projects to reduce the barrier of entry and creating a secondary marketplace for providing liquidity to investors.”

Meanwhile, the central bank of the United Arab Emirates (UAECB) is co-developing the world’s first state-backed bilateral central bank digital currency along with the Saudi Arabian Monetary Authority named “Aber,” Arabic for passing by, crossing, or traveling on a road. Aber has initially been set up to help the UAE and Saudi Arabia make more cost-effective, bank-to-bank, cross-border payments and financial settlements using blockchain technology on a probational basis, and for exclusive use by a limited number of banks, according to the official statements.

 Eventually, Aber will be used globally on China’s Blockchain-based Service Network (BSN) which will support future central bank digital currencies (CBDC) from multiple countries, including the UAECB.

Conclusion

A green recovery is imperative for a sustainable social and economic future in the digitalized post-coronavirus pandemic world, said Rt. Hon. Alok Sharma, President of COP26, who also praised the UAE’s undertakings in developing green energy technologies in Masdar City.

Finding financing for this green transition will likely not be too challenging according to H.E. Khaldoon Al Mubarak, Managing Director & Group CEO, Mubadala Investment Corporation and Laurence Fink, Chairman and Chief Executive Officer, BlackRock, Inc. the world’s largest asset manager, because a tectonic shift has occurred since the pandemic with the markets pricing climate risk into the value of securities, which is sparking a fundamental reallocation of capital towards sustainable investing to ensure a green recovery in a post-Covid-19 world.

“I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives.…. No issue ranks higher than climate change on our clients’ lists of priorities …We know that climate risk is investment risk … With the U.S. commitment last week to rejoin the Paris Agreement, 127 governments – responsible for more than 60% of global emissions – are considering or already implementing commitments to net zero. Momentum continues to build, and in 2021 it will accelerate – with dramatic implications for the global economy,” said Fink.[1]

About the author

Selva Ozelli, Esq., CPA is an international tax attorney and CPA who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.