Economic Impact

Cooperation on Climate Is Emerging in the Middle East

January 14, 2023

By David Kaufman

After the Abraham Accords, partnerships between companies in Israel and Arab countries have led to the kinds of initiatives that will be on the Davos agenda.

In December 2020, the Israeli company Watergen signed a partnership agreement with the Abu Dhabi-based multinational firm Al Dahra to install their fresh water production devices in the United Arab Emirates. The deal was notable both for its timing and the parties involved.

Arriving just two months after the signing of the Abraham Accords— an agreement forged by the Trump administration that established diplomatic relations between Israel and a handful of formerly adversarial Arab nations — the Watergen deal soon resulted in dozens of water production units operating in commercial and government buildings across the United Arab Emirates.

The partnership was among the first collaborations between Israel and these onetime foes aimed at combating climate-related challenges such as rising temperatures and shrinking water resources. Since then, nearly a half-dozen additional like-minded agreements have been discussed or reached, including a plan to generate hydrogen power in Morocco and a United States-supported and Emirates-funded deal for Jordan to sell solar power to Israel in exchange for fresh water.

As the World Economic Forum meets in Davos, Switzerland, next week, under the theme of “Cooperation in a Fragmented World,” the most unlikely of places — the Middle East — may be offering hints of how that can be achieved. Since the signing of the Abraham Accords, there has been progress on the diplomatic and economic fronts, but especially in addressing the global climate crisis — a major focus of the forum.

Kelsey Goodman, associate director for the Middle East and North Africa for the World Economic Forum, said “the climate and energy nexus is top of mind at the annual meeting,” particularly when it comes to the Mideast-North Africa region, known as MENA.

Those nations are expected to turn out in record numbers at Davos, whose talks are being seen as a springboard for next year’s COP28 climate summit to be held in Dubai, Ms. Goodman said. The trend, she said, toward greater engagement on climate issues from MENA policymakers and business leaders is a reflection of momentum on climate solutions in the region.

The accords have played a role in driving that momentum, experts said. Spearheaded by Jared Kushner, former President Donald J. Trump’s son-in-law and a presidential adviser, they ushered in a long-eluded normalization between Israel and the United Arab Emirates, Bahrain, Morocco and Sudan.

Since then, agreements on defense and tourism have been reached between Israel and the Persian Gulf states; over the past two years, for instance, with the country now open to them, some 500,000 Israelis visited the Emirates.

The Emirates also recently signed a first-of-its-kind deal to acquire Israeli-made air defense systems. And academic cooperation partnerships, like the one between Israel’s University of Haifa and the Emirates’ Zayed University for joint research on environmental issues, have been formed.

But with their shared desert topography and collective climate crises, green partnerships like the Watergen agreement have become among the most vibrant arenas for cooperation. Israel provides decades of environmental research, technology and manufacturing, while the oil-rich gulf nations deliver funding and access to new markets.

“This type of regional harmonization makes a lot of sense,” Ms. Goodman said, “because the Middle East and gulf are far more suited to tech-based — rather than nature-based — environmental solutions” to climate change. “Embracing alternative technologies is far more ideal in this region than, say, trying to plant new forests in deserts without water,” Ms. Goodman added.

“We are coming with technology, they are coming with technology, we are coming with funding and they are coming with funding,” said Amir Hayek, Israel’s first-ever ambassador to Abu Dhabi, about the nations’ environmental agreements. “Israel and the U.A.E. are cooperating on a fully equal level.”

The accord between Israel and Morocco led to a large and potentially significant deal, signed last November, between the Israeli hydrogen production company H2Pro and Gaia Energy in Morocco, which focuses on renewable energy projects across North Africa and Egypt.

Under the agreement, H2Pro plans to build a green hydrogen production facility powered by Morocco’s abundant wind and sunlight. The hydrogen will be exported to Europe for industrial use.

H2Pro will initially construct a modest sized test facility in Morocco, but potential for growth lies in Europe’s untapped green hydrogen market, which is expected to swell as global demand rises more than sevenfold by 2050, according to a recent McKinsey & Company survey.

Rotem Arad, H2Pro’s director of business development, said the company has plans to scale production “all the way up to the gigawatt level, which is potentially worth hundreds of millions of dollars.”

For H2Pro and other Israeli companies, the accords may open markets not just within the region but in Asia, India, China and beyond.

“If Israel was once known as the ‘start-up nation,’” said Mr. Rutman from Watergen, “the next decade of gulf partnerships will see us become the ‘scale up’ nation.”

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