Having a long-term energy plan will boost sustainable long-term investments in the UAE, says a London Business School expert.
This month, the UAE government unveiled a three-decade energy plan that aims to save the country billions of dirhams while still sustaining economic growth. The plan has been designed to balance the environmental goals of the country as well as fulfilling its economic needs.
Commenting on the new Energy Plan, Ioannis Ioannou, Associate Professor of Strategy and Entrepreneurship, London Business School said: “The main goal of the UAE Energy Plan 2050 is for clean energy to account for 44% of total energy production to contribute towards sustainable economic growth for the country in the long run.”
The plan outlines significant cuts to carbon emissions, an increase in clean energy use and to promote overall energy efficiency. Dr Ioannou, whose research focuses on sustainability, explained: “The importance of national institutions in promoting a long-term sustainable future and environmentally responsible behaviour by corporates cannot be overemphasized. In fact, research suggests that nation-level institutions are key drivers of corporate environmental performance.
“The UAE plan is undoubtedly a solid step in the right direction. It represents a public commitment by the government and hence, reduces potential uncertainties regarding future energy policy. At the same time, this reduction in uncertainty combined with the long-term time horizon of the plan is likely to attract sustainable long-term investments in domains such as renewable energy and energy efficiency solutions.
“It is also important to note that the announcement of the plan represents a strong commitment to the UN’s Sustainable Development Goals (SDGs) by the UAE. It establishes the framework and the context for companies and other entities to set up operations that are consistent with the principles of sustainable economic growth.”
Dr Ioannou concluded: “Of course, it will be challenging for a country so heavily reliant and invested in hydrocarbon energy to leverage its extensive experience and unique skills to build an economy based on a diversified mix of predominantly clean energy sources. The devil is often in the details, and organizational change is always difficult. Yet it certainly helps, and is commendable, when institutions are put in place to enable a transition to a more sustainable future.”