Arab Monetary Fund urges greater green-energy focus

TDT | Manama                                                

The Daily Tribune – www.newsofbahrain.com     

The Arab Monetary Fund has issued a call for increased adoption of renewable energy sources in the Arab countries in order to effectively mitigate CO2 emissions.

The recommendations came in a study exposing the non-linear relationship between real GDP per capita and CO2 emissions in Arab countries, emphasising the need for greater reliance on renewable energy.

Using the Environmental Kuznets Curve (EKC) framework, the study, titled ‘The GDP-CO2 Emissions Nexus in Arab Countries,’ examined the economic and environmental performance of these nations from 1990 to 2020.

The study found that CO2 emissions increase up to a certain income turning point, beyond which further GDP growth actually leads to a reduction in CO2 emissions.

Explaining, it said the analysis of high-income countries showed that GDP contributed to an increase in CO2 emissions until the turning point was reached ($58,151 for high-income countries, $9,685 for low-income countries), after which it facilitated a decline in emissions.

Furthermore, the study demonstrated an inverse relationship between the consumption of renewable energy and carbon dioxide emissions.

It also revealed that energy price fluctuations were inversely correlated with CO2 emissions in Arab countries.

The report also highlighted the significant impact of higher energy prices on CO2 emissions, particularly in middle- and low-income countries.

To address these issues, the study stressed the importance of implementing economic reforms that eliminate energy subsidies, increase investment in renewable energies (such as solar and wind power), and promote the development of green technologies to reduce CO2 emissions.

Consequently, the Arab Monetary Fund advises Arab countries to formulate strategies that promote the expansion of renewable energy sources, enact reforms in energy subsidy policies, and decrease reliance on fossil fuels.

The report further underscores the necessity of encouraging environmentally friendly manufacturing methods, establishing green finance mechanisms, and investing in technologies that effectively minimise greenhouse gas emissions.