Achieving a low carbon future in the Middle East and Central Asia

What is it about?

To mitigate climate change, countries in the Middle East and Central Asia are trying to reduce the amount of greenhouse gases they emit. This is in line with the commitment they have made as a part of the global Paris Agreement. Increasing the price of fossil fuels or spending more on renewable energy are two broad ways to achieve a low carbon future. However, both measures could negatively affect the growth of countries in this region. This paper looks at the long term effects of these measures. It also considers the best options that can help these regions achieve their goals. The paper suggests that removing all fuel subsidies and introducing a phase carbon tax can lead to the use of cleaner fuels and is beneficial for future generations. Alternatively, investing in renewable energy between 2023 and 2030 can help achieve the region’s emissions goals. This could lead to reduced fuel subsidies without any carbon tax but could leave the future generations in debt. Hence, a mix of both policies and their early application with monetary and technological support can help these countries achieve these goals more effectively.

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Photo by Matt Artz on Unsplash

Photo by Matt Artz on Unsplash

Why is it important?

Failure to meet the goals of the Paris Agreement by 2030 can result in very high levels of global warming. Countries in the Middle East and Central Asia will have to spend a lot of money on low carbon measures which could reduce the funds available for fulfilling other needs. A study of the measures listed in this paper will be helpful for the policymakers in these regions to launch sustainable policies. KEY TAKEAWAY: No matter which emission mitigation options countries in the Middle East and Central Asia choose, their quick application is needed to meet the Paris Agreement goals and reduce carbon emissions. Disclaimer - This summary was prepared by Kudos Innovations Ltd and does not necessarily represent the views of International Monetary Fund (IMF).