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The Black sea protection initiative: What should we remember?

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The Black sea protection initiative: What should we remember?
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Climate change is widespread, rapid, and intensifying, and some trends are now irreversible, at least during the present time frame, according to the latest much-anticipated Intergovernmental Panel on Climate Change (IPCC) report, released on Monday.

Human-induced climate change is already affecting many weather and climate extremes in every region across the globe. Scientists are also observing changes across the whole of Earth’s climate system; in the atmosphere, in the oceans, ice floes, and on land.

Many of these changes are unprecedented, and some of the shifts are in motion now, while some – such as continued sea level rise – are already ‘irreversible’ for centuries to millennia, ahead, the report warns.

But there is still time to limit climate change, IPCC experts say. Strong and sustained reductions in emissions of carbon dioxide (CO2) and other greenhouse gases, could quickly make air quality better, and in 20 to 30 years global temperatures could stabilize.

‘Code red for humanity’

The UN Secretary-General António Guterres said the Working Group’s report was nothing less than “a code red for humanity. The alarm bells are deafening, and the evidence is irrefutable”.

He noted that the internationally-agreed threshold of 1.5 degrees above pre-industrial levels of global heating was “perilously close. We are at imminent risk of hitting 1.5 degrees in the near term. The only way to prevent exceeding this threshold, is by urgently stepping up our efforts, and persuing the most ambitious path.

“We must act decisively now, to keep 1.5 alive.”

The UN chief in a detailed reaction to the report, said that solutions were clear. “Inclusive and green economies, prosperity, cleaner air and better health are possible for all, if we respond to this crisis with solidarity and courage“, he said.

He added that ahead of the crucial COP26 climate conference in Glasgow in November, all nations – especiall the advanced G20 economies – needed to join the net zero emissions coaltion, and reinforce their promises on slowing down and reversing global heating, “with credible, concrete, and enhanced Nationally Determined Contributions (NDCs)” that lay out detailed steps.

Human handiwork

The report, prepared by 234 scientists from 66 countries, highlights that human influence has warmed the climate at a rate that is unprecedented in at least the last 2,000 years.

In 2019, atmospheric CO2 concentrations were higher than at any time in at least 2 million years, and concentrations of methane and nitrous oxide were higher than at any time in the last 800,000 years.

Global surface temperature has increased faster since 1970 than in any other 50-year period over a least the last 2,000 years. For example, temperatures during the most recent decade (2011–2020) exceed those of the most recent multi-century warm period, around 6,500 years ago, the report indicates.

Meanwhile, global mean sea level has risen faster since 1900, than over any preceding century in at least the last 3,000 years.

The document shows that emissions of greenhouse gases from human activities are responsible for approximately 1.1°C of warming between 1850-1900, and finds that averaged over the next 20 years, global temperature is expected to reach or exceed 1.5°C of heating.

Time is running out

The IPCC scientists warn global warming of 2°C will be exceeded during the 21st century. Unless rapid and deep reductions in CO2 and other greenhouse gas emissions occur in the coming decades, achieving the goals of the 2015 Paris Agreement “will be beyond reach”.

The assessment is based on improved data on historical warming, as well as progress in scientific understanding of the response of the climate system to human-caused emissions.

“It has been clear for decades that the Earth’s climate is changing, and the role of human influence on the climate system is undisputed,” said IPCC Working Group I Co-Chair, Valérie Masson-Delmotte. “Yet the new report also reflects major advances in the science of attribution – understanding the role of climate change in intensifying specific weather and climate events”.

Extreme changes

The experts reveal that human activities affect all major climate system components, with some responding over decades and others over centuries.

Scientists also point out that evidence of observed changes in extremes such as heatwaves, heavy precipitation, droughts, and tropical cyclones, and their attribution to human influence, has strengthened.

They add that many changes in the climate system become larger in direct relation to increasing global warming.

This includes increases in the frequency and intensity of heat extremes, marine heatwaves, and heavy precipitation; agricultural and ecological droughts in some regions; the proportion of intense tropical cyclones; as well as reductions in Arctic sea ice, snow cover and permafrost.

The report makes clear that while natural drivers will modulate human-caused changes, especially at regional levels and in the near term, they will have little effect on long-term global warming.

A century of change, everywhere

The IPCC experts project that in the coming decades climate changes will increase in all regions. For 1.5°C of global warming, there will be increasing heat waves, longer warm seasons and shorter cold seasons.

At 2°C of global warming, heat extremes are more likely to reach critical tolerance thresholds for agriculture and health.

But it won’t be just about temperature. For example, climate change is intensifying the natural production of water – the water cycle. This brings more intense rainfall and associated flooding, as well as more intense drought in many regions.

It is also affecting rainfall patterns. In high latitudes, precipitation is likely to increase, while it is projected to decrease over large parts of the subtropics. Changes to monsoon rain patterns are expected, which will vary by region, the report warns.

Moreover, coastal areas will see continued sea level rise throughout the 21st century, contributing to more frequent and severe coastal flooding in low-lying areas and coastal erosion.

Extreme sea level events that previously occurred once in 100 years could happen every year by the end of this century.

The report also indicates that further warming will amplify permafrost thawing, and the loss of seasonal snow cover, melting of glaciers and ice sheets, and loss of summer Arctic sea ice.

Changes to the ocean, including warming, more frequent marine heatwaves, ocean acidification, and reduced oxygen levels, affect both ocean ecosystems and the people that rely on them, and they will continue throughout at least the rest of this century.

Magnified in cities

Experts warn that for cities, some aspects of climate change may be magnified, including heat, flooding from heavy precipitation events and sea level rise in coastal cities.

Furthermore, IPCC scientists caution that low-likelihood outcomes, such as ice sheet collapse or abrupt ocean circulation changes, cannot be ruled out.

Limiting climate change

“Stabilizing the climate will require strong, rapid, and sustained reductions in greenhouse gas emissions, and reaching net zero CO2 emissions. Limiting other greenhouse gases and air pollutants, especially methane, could have benefits both for health and the climate,” highlights IPCC Working Group I Co-Chair Panmao Zhai.

The report explains that from a physical science perspective, limiting human-induced global warming to a specific level requires limiting cumulative carbon dioxide emissions, reaching at least net zero CO2 emissions, along with strong reductions in other greenhouse gas emissions.

“Strong, rapid and sustained reductions in methane emissions would also limit the warming effect resulting from declining aerosol pollution”, IPCC scientists underscore.

About the IPCC

The Intergovernmental Panel on Climate Change (IPCC) is the UN body for assessing the science related to climate change. It was established by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) in 1988 to provide political leaders with periodic scientific assessments concerning climate change, its implications and risks, as well as to put forward adaptation and mitigation strategies.

In the same year the UN General Assembly endorsed the action by the WMO and UNEP in jointly establishing the IPCC. It has 195 member states.

Thousands of people from all over the world contribute to the work of the IPCC. For the assessment reports, IPCC scientists volunteer their time to assess the thousands of scientific papers published each year to provide a comprehensive summary of what is known about the drivers of climate change, its impacts and future risks, and how adaptation and mitigation can reduce those risks.

‘Before our very eyes’

Multiple, recent climate disasters including devastating flooding in central China and western Europe have focused public attention as never before, suggested Inger Andersen, Executive Director of the UN Environment Programme (UNEP).

“As citizens and as businesses and as governments, we are well aware of the drama,” she said “The drama exists, we have seen it and we heard about it in every news bulletin. And that’s what we need to understand, that the expression of what the science says is exhibited before our very eyes, and of course what this excellent report does is, it projects those scenarios outward, and tells us, if we do not take action, what could be the potential outcomes, or if we do take action, what will be a very good outcome.”

Climate adaption critical

Apart from the urgent need for climate mitigation, “it is essential to pay attention to climate adaptation”, said the WMO chief, Peteri Taalas, “since the negative trend in climate will continue for decades and in some cases for thousands of years.

“One powerful way to adapt is to invest in early warning, climate and water services“, he said.”Only half of the 193 members of WMO have such services in place, which means more human and economic losses. We have also severe gaps in weather and hydrological observing networks in Africa, some parts of Latin America and in Pacific and Caribbean island states, which has a major negative impact on the accuracy of weather forecasts in those areas, but also worldwide.

“The message of the IPCC report is crystal clear: we have to raise the ambition level of mitigation.”

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A Labour Government Should not Frighten the Horses

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The UK general election is likely to mean changes, but Gulf citizens need not be too worried.

By James Drummond

If the tension was killing you, now you know. If it wasn’t, then be aware that a general election in the United Kingdom will be held on July 4 – less than six weeks away.

For the hapless Rishi Sunak, it looks like a case of “If it were done when ’tis done, then ’twere well it were done quickly.” Polls indicate that after 14 years of conservatism, real or imagined, voters are likely to elect a new Labour government.

What does this mean for us here in the Gulf?

The six Gulf states are certainly exposed to Britain. The extent of GCC holdings in the UK is enormous, ranging from Qatari ownership of the Shard building in London, stakes in the Sainsburys supermarket chain and Barclays bank, to Sheikh Mohammed bin Rashid’s Godolphin stables in Suffolk.

Manchester City and Newcastle United football clubs are owned by Emirati and Saudi interests, respectively. Kuwait’s wealth is managed by the Kuwait Investment Office near St Pauls Cathedral.

Labour has been careful to detail very few policies (or hostages to fortune, as its strategists may see it), but last week, David Lammy, the likely new foreign secretary, outlined a further campaign against dirty money.

Britain is a “corruption services centre”, while London is a “hotbed of kleptocracy”, Mr Lammy said. He said that he wanted to reward whistleblowers and clamp down on “enablers” of financial crime.

Given the paucity of public announcements, Lammy’s speech is significant, because it implies that the incoming government is likely to act. Fighting financial crime is relatively uncontroversial and attracts cross-party support – although in the UK’s case with limited success.

British politicians have made similarly grandiose statements before. But after Russia’s invasion of Ukraine, London has moved particularly against Russian dirty money, and sanctioned individuals. It finally introduced an obligation mandating the disclosure of beneficial owners of property.

Overseas trusts are also now required to disclose their ultimate beneficial owners, and there is now greater transparency when registering entities at Companies House.

This seems to have had only limited effect, however. Last week Andrew Mitchell, the deputy foreign secretary, cited estimates that 40 percent of the world’s dirty money still passes through London.

Spotlight on Corruption, a non-governmental organisation, wrote in October last year that “major reform is needed to how lawyers and accountants, the property sector and company formation agents are regulated for money laundering.” Lammy may choose to take further action against these and other professionals.

Other so-called enablers include retired politicians, some of them in the House of Lords, who work as advisors to unsavoury actors. Labour could move to tighten disclosure, although several of its senior former members are likely to lobby against further transparency.

It is also possible that Labour will go further in taxing expatriates. In its limited public commitments, the party has promised to clamp down on “tax dodgers”.

Those with property in the UK already pay tax on rental income they receive, and worldwide assets are subject to Britain’s inheritance tax. Some Gulf Arab families with UK property have been caught by inheritance tax.

A government led by Sir Keir Starmer, the Labour leader, could go further, as the US does, in taxing worldwide income of its citizens, more than 200,000 of whom live in the UAE alone. The argument is that if you have the privilege of carrying the passport, you have an obligation to pay tax.

Another question surrounds nationalisation. Labour is committed to re-nationalising the railways for one, although the infrastructure is already under central government control.

But another target may – may – be England’s water supply network, which was privatised in 1989. Shareholders in various of the rump companies include the Qatar Investment Authority and Adia of the UAE.

The water companies have been the subject of a vociferous campaign, for allegedly paying their shareholders high dividends while neglecting maintenance and investment. It is possible that an incoming Labour government will nationalise the industry.

All that said, the primacy of the rule of law and respect for property rights remain strong in Britain.

Barratt, a mass housebuilder, reported earlier this week that London remains the top choice among world cities for UAE investors looking to buy overseas. The holdings of Gulf states and rights of Gulf citizens in the UK remain secure, even with a Labour government.

James Drummond is Editor-in-Chief of the AGBi

Courtesy: The AGBI.Com


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Kuwait’s Political Crisis Adds to Economic Uncertainty

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Kuwait’s latest standoff is deeply concerning for both the near and long term, writes Andrew Cunningham

The decision by Kuwaiti emir Sheikh Mishal Al-Ahmad to dissolve the country’s recently elected parliament just days before its inaugural session on May 14 presents overseas investors and Kuwaiti citizens with more uncertainty.

The situation raises concerns about the country’s economic prospects over both the short and long term.

Disputes and stand-offs between Kuwait’s emirs and its boisterous parliament are nothing new. Parliament has been dissolved, and the constitution suspended, numerous times over the past 40 years. The country has held four elections in the past four years.

Squabbling between the two sides is rooted in political disagreements and this most recent outbreak is no different.

A major factor behind the latest dissolution is believed to have been parliament’s objection to Sheikh Mishal’s choice of crown prince. Although the crown prince is nominated by the emir, the appointment has to be ratified by the parliament.

But these political, and sometimes personal, disputes have real consequences for Kuwait’s economy and financial system and, ultimately, for the long-term welfare of its citizens.

Kuwait is a prosperous country. If we take a snapshot today, we see it producing nearly 2.5 million barrels of oil per day (bpd), and there are plans under way to increase production capacity to 4 million bpd by 2035.

State foreign reserves are around $930 billion, according to National Bank of Kuwait, the country’s largest bank. With a population of a little over 4 million, its GDP per capita is one of the highest in the world.

Squabbling between the two sides is rooted in political disagreements and this most recent outbreak is no different.

A major factor behind the latest dissolution is believed to have been parliament’s objection to Sheikh Mishal’s choice of crown prince. Although the crown prince is nominated by the emir, the appointment has to be ratified by the parliament.

But these political, and sometimes personal, disputes have real consequences for Kuwait’s economy and financial system and, ultimately, for the long-term welfare of its citizens.

Kuwait is a prosperous country. If we take a snapshot today, we see it producing nearly 2.5 million barrels of oil per day (bpd), and there are plans under way to increase production capacity to 4 million bpd by 2035.

State foreign reserves are around $930 billion, according to National Bank of Kuwait, the country’s largest bank. With a population of a little over 4 million, its GDP per capita is one of the highest in the world.

In March this year, rating agency Fitch described Kuwait’s fiscal and external balance sheets as among the strongest of any of the governments it rates.

But when we look at long-term trends, the picture is more complex and less secure.

Kuwaiti government spending remains overwhelmingly dependent on oil and gas revenues. The government has made almost no progress, over many decades, in diversifying the economy away from oil, or in reducing the huge burden of government salaries and welfare payments.

Oil and gas revenues currently account for nearly 70 percent of total income and, according to IMF projections, will continue to do so for the rest of the decade.

These revenues have served the country well in the past, despite the volatility of oil prices, but such overwhelming dependence looks foolhardy when consumers worldwide are striving to reduce consumption of oil and gas and investors and energy firms have pivoted towards renewables.

Nearly all of the Kuwaiti government’s non-oil and gas revenue arises from overseas investments and from dividends from state-owned companies. Tax revenues account for less than 1 percent of total government income.

Looking beyond the fiscal imperative to diversify the economy is the need to provide employment opportunities for Kuwaiti citizens.

No less than 84 percent of the Kuwaiti workforce was employed by the government at the end of 2022. It is hardly surprising that nearly half of government expenditure is allocated to the salaries of public employees.

Pressure for social spending will increase in the years ahead. A World Bank report, published last year, showed that levels of obesity and Type 2 diabetes were higher in Kuwait than in any of the other GCC countries and nearly double the average in OECD countries.

Partly as a result of this, the World Bank estimated that Kuwait’s old age dependency ratio – the number of people over 65 years old in relation to those of working age – will be nearly double that of its neighbours by 2040.

Kuwait is also a country that is being significantly affected, even today, by climate change. Temperatures during the summer can exceed 50 degrees, making Kuwait one of the hottest places on earth.

These are difficult and complex challenges, both economic and social, but they are hardly unique to Kuwait. That they are, in some cases, more acute in Kuwait than elsewhere is due to decades’ long procrastination and political paralysis.

The government’s General Reserve Fund, which held most of its liquid assets, was entirely depleted in September 2020, according to Kuwait’s own ministry of finance. With AA ratings, the obvious solution was to borrow money – Kuwait’s debt-to-GDP ratio is less than 5 percent. Yet the parliament has still not passed a so-called ‘Liquidity Law‘ that would allow modest issuance of foreign currency debt.

The parliament also held up the introduction of Value Added Tax (VAT), making Kuwait one of two of the six GCC countries not to fulfil a joint commitment to implement a minimum VAT of 5 percent.

Over the past four years, all three of the big international credit rating agencies have downgraded the government of Kuwait.

In their rating reports, all agencies cited a dysfunctional and slow-moving political environment that was reducing the country’s financial flexibility and delaying much needed economic and financial reform.

Politics matters.

It is unrealistic to think that after decades of enmity the ruling family and the parliament will soon form a harmonious working relationship.

But they do need to find some common ground that will enable them to start addressing fundamental economic and social issues while the country still has large financial reserves and strong credit ratings.

Time is running out.

Andrew Cunningham writes and consults on risk and governance in Middle East and sharia-compliant banking systems


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ICD and JSC Ziraat Bank Collaborate to Boost Uzbekistan’s Private Sector

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At the 3rd Tashkent Investment Forum, the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan took a significant step forward in their partnership to empower small and medium-sized enterprises (SMEs) and foster economic growth in Uzbekistan. The forum, held in the capital city of Uzbekistan, brought together key stakeholders from the public and private sectors to discuss investment opportunities and economic development strategies for the region. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is aimed at boosting the private sector in Uzbekistan.

During the forum, ICD and JSC Ziraat Bank Uzbekistan formalized an expression of intent to collaborate on various initiatives aimed at supporting SMEs. One of the key elements of this collaboration is the provision of a Line of Financing (LoF) facility by ICD to JSC Ziraat Bank Uzbekistan. This LoF facility will enable the bank to fund private sector projects as an agent of ICD, thereby providing SMEs with access to the necessary capital to initiate and grow their businesses.

The partnership between ICD and JSC Ziraat Bank Uzbekistan is expected to have a significant impact on the SME landscape in Uzbekistan. By equipping entrepreneurs with the resources they need to succeed, this collaboration will not only support the growth of individual businesses but also contribute to the overall economic development of the country. SMEs play a crucial role in driving economic growth, creating jobs, and fostering innovation, and this partnership will help strengthen the SME ecosystem in Uzbekistan.

JSC Ziraat Bank Uzbekistan, as a strategic partner for ICD, brings a wealth of experience and expertise to the table. As a prominent commercial bank with foreign capital, JSC Ziraat Bank Uzbekistan has a strong track record of supporting SMEs and promoting economic development. The bank’s partnership with ICD further underscores its commitment to advancing the private sector in Uzbekistan and its dedication to supporting the country’s economic growth.

ICD, for its part, is a leading multilateral development financial institution that focuses on supporting the economic development of its member countries through the provision of finance and advisory services to private sector enterprises. By partnering with JSC Ziraat Bank Uzbekistan, ICD is furthering its mission of promoting economic development and fostering entrepreneurship in Uzbekistan and across the Islamic world.

The LoF facility provided by ICD to JSC Ziraat Bank Uzbekistan is just one example of the many initiatives that the two entities are undertaking to support SMEs in Uzbekistan. In addition to providing financial support, the partnership between ICD and JSC Ziraat Bank Uzbekistan will also include capacity-building initiatives and technical assistance programs to help SMEs succeed in today’s competitive business environment.

Overall, the partnership between ICD and JSC Ziraat Bank Uzbekistan represents a significant step forward in supporting SMEs and fostering economic growth in Uzbekistan. By working together, these two institutions are helping to create a more vibrant and dynamic private sector in Uzbekistan, which will ultimately benefit the country’s economy and its people. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is expected to have a far-reaching impact on the private sector in Uzbekistan.


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