Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Saudi Arabia to Become Global Leader in Carbon Trading

Saudi Arabia to Become Global Leader in Carbon Trading

Saturday, 18 September, 2021 - 11:00
A Saudi man looks at a solar plant in Uyayna, north of Riyadh, Saudi Arabia, April 10, 2018. REUTERS/Faisal Al Nasser

In light of international demands to reduce carbon emissions, experts affirmed that Saudi Arabia was leading expectations with a higher growth rate and a rising economic value, through policies that promote carbon neutrality and meet local and global green initiatives.

As Saudi Arabia appears to be a leading candidate to benefit from the increase in carbon trade, Abdullah Al-Malehi - a Saudi investor in the green economy - pointed out that the carbon emissions market was proving to be profitable for many, as energy trading companies, especially oil and gas, focus their attention on carbon trading operations.

According to Al-Malehi, carbon emitters can buy additional allowances for their emissions, as well as sell the excess to other companies, paving the way for a trading market that grew 23 percent year on year in 2020, to reach USD 281 billion. He added that banks and funds were also eyeing carbon trading activities.

In remarks to Asharq Al-Awsat, Eng. Faisal Al-Fadl, a non-governmental environmental observer to the United Nations from the Saudi Green Building Forum, stressed the need to regulate carbon trading by responsible governments or international organizations, by providing companies with a set amount of carbon they can emit annually.

According to Al-Fadl, Saudi Arabia is achieving the goal of the Paris Agreement, to reach the safe range. In his opinion, none of the important investments will be possible for the private sector unless its goals are directed to the right policies, which means creating and benefiting from incentives for change.

He explained that after eliminating fossil fuel subsidies, introducing carbon pricing, increasing energy efficiency standards, and implementing auctions for cheaper renewable energy, there will be a radical change in the leadership of major companies.

Fadl also stressed that carbon pricing was one of the policies that would play an important role in contributing to the implementation of the Paris Agreement and the commitments of countries.

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