Energy Efficiency Perspectives for MENA

MENA countries are facing an increasing challenge in reducing greenhouse gas emissions from the energy sector. Qatar, Kuwait, UAE, Bahrain and Saudi Arabia figure among the world’s top-10 per capita carbon emitters. In case of business-as-usual scenario, GHGs emissions from the energy sector will continue to rise throughout the region. According to a recent report by International Energy Agency (IEA), energy intensity demand in MENA is mainly driven by population and economic growth and reliance of heavy industries on generous energy subsidy. It is projected that primary energy demand in the region will be doubled by 2030 and the region’s share in global oil production will increase from 35% now to 44% in 2030. MENA countries together have 840 billion barrels of proven crude oil reserves (57% of world’s oil) and 80 trillion cubic meters of proven gas reserves (41% of world’s natural gas). Population growth and economic expansion have increased energy demand significantly over the past decade; between 2000 and 2011, domestic consumption almost doubled in Oman and tripled in Qatar. 

Growth in energy demand is driven across the end-use sectors: in the residential sector through increased use of air conditioning and cooling units; in the transportation sector through rising vehicle ownership; and in the industrial sector from greater industrial activity, hydrocarbon production and refining, and energy-intensive desalination plants. One of the central reasons for increased GHG emissions from MENA energy sector is the low efficiency of energy resource consumption. The energy intensity (energy use per unit of GDP) is very high which drives up atmospheric GHG emissions. However it is important to highlight the difference among MENA countries regarding carbon intensity levels where GCC nations are rank higher compared to energy-importing MENA nations like Jordan, Egypt, Lebanon etc. All these facts stress the urgent need to increase energy efficiency in order to precipitate decline in energy intensity and thus reduce GHG emissions.

There is a wide array of measures on both supply side and demand side, to boost MENA energy efficiency levels by promoting stringent environmental, energy saving policies to combat climate change.  Formal energy efficiency programs and voluntary measures combined will help the region to maintain its economic strength. Energy conservation programs in residential, commercial and industrial sectors can significantly reduce carbon emissions and augment energy supply in the MENA region. A robust regulatory and institutionalized framework can help to achieve a reduction in GHG emissions through a bundle of non-market based and market-based instruments.

Also known as command and control instruments (CAC), these regulations focus on preventing environmental externalities which is achieved through auditing and monitoring/inspection program and performance-oriented regulations to limit air pollutants. Here are some examples of command and control instruments:

• Awareness and information campaigns
• Labeling & training programs to engage end-users to reduce their emissions voluntarily.
• Information-based programs to spread awareness and encourage efficient consumption patterns.
• Establishing minimum energy performance standards for appliances, equipment and vehicles as a complement to labelling methods.
• Building codes and insulation to save the energy loss.
• Smart reductions such as smart meters, energy audit, energy saving plans etc.
• Phasing out of inefficient lighting like incandescent bulbs and CFLs.

Market-based instruments are defined as a policy instrument that use market, price to provide incentives for polluters to reduce or eliminate their emissions (negative environmental externality). Building regional cap, carbon trading platform and grants/rebates/tax exemption/rewards to encourage efficiency measures are good examples of market-based incentive program that may be implemented in the Middle East.

Conclusion

On account of its huge fossil fuel reserves, MENA has a great role to play in the international efforts towards green economy and sustainable development. Recently, the GCC has embarked on ambitious policies and projects across different sectors which may, explicitly or implicitly, mitigate impacts of GHG on their economies and development priorities. 

Adoption of energy efficiency-based energy policies in commercial, industrial and domestic sectors is integral to climate change mitigation in the MENA region. It is imperative on MENA governments to create an environment that rewards energy-efficient choices and encourages innovation for all kinds of energy users. The Middle East electricity market is growing at a rapid pace due to higher consumption rates in the domestic, commercial and industrial sectors which underlines the need for a successful implementation strategy that can bridge the gap between the current supply and increasing demand.