Tuesday, 20 December 2022

2022 saw the climate crisis intensify — and Egypt’s transition to a greener economy step up a gear

In 2022, the impacts of climate change became more apparent than ever — at the same time as our green economy seemed to come of age: This year has been a whirlwind one for news on the climate crisis and the green economy here at home. Egypt’s role as host of the COP27 climate summit catalyzed fresh regulation and initiatives in sectors from solar power to EVs, put sustainability at the top of the agenda for private sector firms, and drummed up USD bns of investment in new green and renewables projects. On the flipside, 2022 also brought home the real-word costs of climate change, as sectors from agriculture to tourism suffered from increasing environmental damage.

This week, we take a look at the impacts of climate change on Egypt in 2022, as well as promising growth in our nascent EV industry. Next week, we’ll review the sweeping progress on renewables, emissions targets, green hydrogen, and climate finance driven by our hosting of COP.

On a global scale, 2022 saw scientists issue their starkest warning yet on the climate crisis: The final installment in a years-long series of landmark UN climate reports dropped in April. The climate scientists’ key message? The world needs to make “immediate and deep” cuts to greenhouse gas emissions to have any hope of averting a runaway climate catastrophe. Flooding, heatwaves, and irreversible damage to ecosystems including our coral reefs are all on the cards for Egypt if steps aren’t taken to limit global warming to 1.5°C. Achieving that target will require massive investment in renewable energy and greentech — and the African continent in particular needs to see a significant increase in funding to adapt to the climate change that’s already in motion. Here at home, our deep dive on climate literacy levels showed that more education is needed to make citizens aware of these dire climate risks, and how to mitigate them.

Egyptian crop farms are already feeling the effects: It was a mixed year for crop farmers, as a longer winter and milder spring caused difficulties for growers of olives and corn but brought unexpected upsides for wheat, cotton, and especially mangoes, which staged a recovery after a dire 2021 season. That said, higher year-round temperatures and unpredictable weather patterns spell trouble for the agriculture sector in the long term, with key local crops including wheat, rice and maize expected to see productivity decline by 11-19% by 2050. Meanwhile, encroaching salinity in the Nile Delta — thanks in part to sea-level rises — had farmers scrambling to adapt to saltier soil conditions.

Livestock and bee farmers aren’t faring much better: Some local dairy farmers told Enterprise that they had been forced to cut their size of their herds or go out of business completely this year, as heat stress to animals and rising feed prices pressure milk production. Climate change is also taking its toll on the honey industry, as unusual cold spells running through spring saw production fall to about half of usual rates.

Our coasts also saw further climate-related damage this year: A World Bank report cast light on the threat posed by coastal erosion on tourism, industrial infrastructure, and residential communities along Egypt’s coasts. If left unchecked, the price tag on the damage is likely to run into bns of USDs annually — and could see half of our beaches lost to the sea by 2050. Meanwhile, we took a closer look at the gradual loss of our vital Red Sea coral reefs to overfishing and unsustainable tourism practices — which was exacerbated when an oil spill in the Gulf of Aqaba hit Dahab’s shores. Coral farming could pose one solution to reverse some of the damage.

It wasn’t all doom and gloom in 2022, as green industries picked up pace — key among them EVs: We’re tempted to describe 2022 as the year that establishing a market for electric vehicles went from a pipe dream to a distinct near-term possibility.

Progress on regulation is enticing the private sector to build EV charging infrastructure: The Electricity Ministry got things off to a promising start in February, setting the tariffs motorists will pay to charge EVs in Egypt and paving the way for private-sector players to enter the nascent sector. Soon after, the government launched a bid for private-sector firms to join a soon-to-be-established state-owned EV charging firm, with 14 companies including Hassan Allam Utilities, Infinity, and Huawei reportedly registering their interest. Private players from KarmSolar to Elsewedy Electric also took steps to enter the local EV charging sector. Meanwhile, our friends at renewable energy player Infinity have built at least 115 charging stations so far nationwide, part of a plan with the government to set up 6k vehicle charging points at 3k stations across the country.

Things are also looking promising for local EV assembly: In October, the House of Representatives passed a bill to establish a new regulatory body that will set policy for EV assembly in Egypt, which we expect to be a key part of the country’s long-awaited automotive strategy. Egypt is expected to start working on its first locally manufactured EV next year, once state-owned El Nasr Automotive wraps up a protracted search for a partner to help produce them. Al Mansour Auto and GM are also looking at partnering to locally assemble up to 15k EVs in Egypt over the next three years. Stellantis and Abou Ghaly were among local automakers who also signaled they could launch EV assembly lines in the near future.

And you, dear Enterprise readers, are getting on board: Some 90% of those who responded to our October EV survey are planning to buy a EV within the next 10 years — and one in five they’ll make a purchase in the next 12 months.

Your top green economy stories for the week:

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