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Published in Forbes.Com on Sept. 3, 2009
Masdar City

Published by Current on 2009-09-03

Who says that an oil-rich sheikdom in the Middle East cannot also be a world leader in developing conservation policies and environment-friendly technologies?

Long before the "green" movement girdled the globe, long before environmentalists started railing against corporations for allegedly polluting the earth, and long before eco-gurus began accumulating fame and fortunes by holding forth against global warming, Abu Dhabi had already turned its harsh desert into green. You could even argue that Abu Dhabi - capital of the oil-rich United Arab Emirates - was the world's first truly green city.

That was because of the single-minded determination of Sheikh Zayed bin Sultan Al Nahyan, who helped marshaled an assortment of seven sheikhdoms into a federation in December 1971. As the UAE's first president, he was also quite possibly the world's first head of state to recognize that there need not be a conflict between environmental security and economic progress. So Sheikh Zayed ordered the planting of more than five million trees, and the creation of dozens of parks. At the same time, he encouraged the development of manufacturing and agro-business. Today, you'd be hard pressed to imagine Abu Dhabi as a city that rose from an unrelenting desert at the edge of the Persian Gulf.

But Abu Dhabi hasn't stopped at just planting trees and fashioning gardens. It has launched Masdar City which, says Sultan Al Jaber, Chief Executive Officer of Masdar, will "position Abu Dhabi as a world-class research and development hub for new energy technologies, effectively balancing its strong position in an evolving world energy market. We want to promote development and commercialization of innovative technologies in renewable and sustainable energies as well as sustainable design."

That's another way of saying that Masdar City is the most ambitious sustainable development project in the world - it will be the world's first zero carbon, zero waste city powered entirely by renewable energy sources. The idea is that Masdar will play a decisive role in Abu Dhabi's transition from technology consumer to technology producer, according to Mr. Al Jaber. The idea also is that the UAE - which produces 2.2 million barrels of oil daily and whose proven reserves of 98 billion barrels should last for another 150 years - will reduce its carbon footprint and spur other fellow-members of the 12-nation oil cartel, the Organization of Petroleum Exporting Countries, to pursue more environment-friendly policies.

The latter, of course, is easier said than done. Everyone pays lip service to the notion of environmental sustainability. But few countries that have signed on to various international codicils concerning environmental protection have actually implemented stringent measures. Developing countries - such as India, China and Brazil - argue that new environmental technologies are expensive to acquire and maintain; moreover, they say, their economies need to expand pollution-causing manufacturing because of growing populations and rising expectations of increasingly educated masses.

Western countries aver that this argument is specious, and that even though some of them - like the United States - are willing to subsidize modern environmental technologies to poor countries, the leaders of the latter often find it politically expedient to play to their domestic galleries and oppose measures proposed by the industrialized nations. These leaders say that imposing strict environmental policies would mean fewer jobs domestically - an argument that may have some merit but isn't entirely insurmountable.

In fact, among Masdar City's plans is one that would develop cheap manufacturing technology that is also easy on the environment. Some of the research for such technology will be carried out by a new global agency that's being housed in Abu Dhabi, International Renewable Energy Agency (IRENA). The selection of Masdar to be IRENA's home marks the first time that an international organization has chosen a Middle East city for its headquarters.

According to IRENA officials, the 131-member organization - which was formed in January 2009 -- aims at becoming the main driving force in promoting a rapid transition toward the widespread and sustainable use of renewable energy on a global scale. Acting as the global voice for renewable energies, IRENA will provide practical advice and support for both industrialized and developing countries, help them improve their regulatory frameworks and build capacity, the officials said. The agency will facilitate access to all relevant information including reliable data on the potential of renewable energy, best practices, effective financial mechanisms and state-of-the-art technological expertise.

IRENA, of course, will work closely with Masdar's parent body, the Mubadala Development Company (Mubadala). Mubadala is wholly owned by the Abu Dhabi government, the wealthiest of the seven sheikhdoms that constitute the UAE on account of the fact that nearly 95 percent of UAE's oil is to be found in this emirate.

This wealth enabled the UAE to make a huge commitment to IRENA during the campaign for the headquarters (the UAE's competitors included Germany and Denmark, both countries with stellar environmental records). Under the UAE commitment, it will give IRENA a grant of $136 million over a six-year period, while also covering all operational costs in perpetuity. At the same time, the Abu Dhabi Fund for Development has created a special endowment of $50 million until 2016 for IRENA; the money is to be used for loans in support of renewable energy projects in the developing world.

The larger point to be made about Masdar is that the initiative comes from a country whose population of four million consists of just 10 percent local Emiratis. But they are an ambitious people, well-versed in dealing with the world on account of their centuries-old trading. Thriving, futuristic cities like Abu Dhabi and Dubai were once small ports but they dealt with merchants and travelers from around the globe.

Now they are showing the world new and innovative ways of dealing with the problems of globalization - problems such as environmental degradation. It wouldn't be hyperbole to say that Masdar is leading the way.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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