Kippreport investigates if oil prices aren’t the only cause for the market slumpAugust 27, 2015 12:00
Power in the GCC
February 8, 2010 4:58 by kippreport
Even though the region is slowly diversifying away from fossil fuels like oil and gas, they are still the main sources of electricity generation. And the burning of these fossil fuels is one of the biggest contributors to the rising levels of carbon dioxide (CO2) in the atmosphere, leading to global warming.
The GCC has just 0.6 percent of the world’s population but produces around 2.4 percent of global emissions, according to international research reports. The United Nations Environmental program said that the six countries contribute approximately 45 to 50 percent of the Arab countries’ cumulative CO2 emissions.
Analysts blame low electricity charges for excessive domestic power usage in the region. A policy brief released by the Dubai School of Government (DSG) this month quotes research as saying that households are responsible for 53 percent of energy use in Saudi, and that they account for 57 percent of the UAE’s ecological footprint.
“[In the GCC] gas is sold at rates far below those of the global market, allowing for electricity tariffs that can be a tenth of those in the US. Pricing distortions have allowed buildings – and entire cities – to be built without regard for energy efficiency,” says the DSG brief.
Kuwait and Qatar offer electricity for free to their citizens, while Saudi, Bahrain and Oman subsidize the electricity rates and have relatively low prices. The only measures to curb personal consumption have been government-sponsored campaigns urging consumers to reduce their electricity use. But that’s not enough, say experts.
The DSG brief suggests three ways to change the situation: “First, raise prices. Second, retrofit buildings for energy efficiency. Third, ban inefficient air conditioners and other appliances.”
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