Route to net zero emissions will cost global economy $5tr annually: BofA

Route to net zero emissions will cost global economy $5tr annually: BofA
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Updated 20 October 2021

Route to net zero emissions will cost global economy $5tr annually: BofA

Route to net zero emissions will cost global economy $5tr annually: BofA

A report from Bank of America has warned reaching net zero will cost the global economy $5 trillion annually for the next 30 years.

On the eve of the UN’s COP26 environmental conference in Scotland this month, where countries who signed the 2015 Paris Agreement to reduce carbon emissions will review their progress and outline policies to achieve net zero by 2050, the report offers a stark reminder of the cost of transitioning to greener energy.

However, the report also warned that failing to address climate change could lead to the loss of 3 percent of global gross domestic product annually this decade, amounting to around $69 trillion by the end of this century.

A key priority at COP26 is for governments to agree on specific cash-backed policies that will accelerate the transition toward net zero, including a commitment to phase out the use of coal, sharply reduce deforestation, speed up the transition to electric vehicles and green heating systems, and implement fiscal measures to encourage increased investment in renewable energy.

In addition, the summit, which is taking place in Scotland’s former industrial heartland of Glasgow, will also attempt to get western governments to make good the $20 billion a year shortfall in helping emerging nations transition to greener energy.

Developed nations had agreed to provide $100 billion per year to emerging nations. Not only have they fallen short on that commitment, but the UN wants agreement in Glasgow to increase that funding further.

The UN Environment Programme estimates the cost of transition in emerging countries will reach $140-300 billion by 2030, and $280-500 billion by 2050. San Francisco based think tank, the Climate Policy Initiative, estimates Africa on its own may require up to $3 trillion by the end of this decade.

Against this backdrop, Bank of America estimates the total cost of transitioning will be $150 trillion, at least four times the amount that global COVID-19 stimulus packages are forecast to cost governments this decade.

The report states financing the trillions of dollars of investment needed for net zero will require “significant changes in capital allocation.”

As Arab News reported last week, the World Resources Institute said G20 countries still account for 75 percent of global greenhouse gas emissions. Meanwhile, a report by Moody’s Investors Service revealed financial institutions in the G20 were carrying almost $22 trillion of exposure to carbon-intensive sectors.

However, Bank of America said the use of labelled bonds and loans to address environmental issues is expanding rapidly.

It is forecasting more than $1 trillion in labeled bond issuance this year, with $900 billion in green, social and sustainability bonds and a further $100 billion in sustainability-linked bonds.

The report adds that labeled bonds already account for more than 20 percent of European high grade and European high yield issuance for corporates this year, driven by environmental, social and governance (ESG) concerns and EU regulations, more than twice the rate in 2020.

However, while the report is bullish about the ability of Western governments to pay for greening the planet, the report notes that while around 50 countries, along with the EU — which between them account for almost 75 percent of CO2 emissions — have committed to reaching net zero, only 10 countries have so far enshrined that commitment in legislation.

The report adds while a number of the countries have pledged to long-term targets, centered on 2050 or the end of the century, they have failed to make 2030 commitments in line with the Paris Agreement.

The good news? Well, Bank of America’s cost estimate is considerably lower than an earlier forecast, published in the summer, by BloombergNEF’s closely watched New Energy Outlook, which put the figure at $173 trillion, of $5.8 trillion annually.

Progress of sorts as the world heads to Glasgow. 


Bitcoin prices likely to double over the next 12 months

Bitcoin prices likely to double over the next 12 months
Updated 59 min 32 sec ago

Bitcoin prices likely to double over the next 12 months

Bitcoin prices likely to double over the next 12 months
  • Fall in largest digital currency is a ‘major buying opportunity’

RIYADH: The discovery of a new coronavirus variant, B.1.1.529, may have weighed on Bitcoin, the world’s largest digital currency, but financial experts expect its value to “double over the next 12 months.”

The fall in Bitcoin value should be seen as a major buying opportunity, said Nigel Green, chief executive and founder of deVere Group.

Bitcoin tumbled over 9 percent on Friday, dragging smaller tokens down.

Bitcoin hit an all-time high of $69,000 earlier this month as more large investors embraced cryptocurrencies, with many drawn to its purported inflation-resistant qualities.

Others have piled into the digital token on the promise of quick gains, a draw that has been heightened by record low or negative interest rates.

“The discovery of a new coronavirus variant has rattled global stock markets as it brings in a new wave of uncertainty,” said Green.

“The crypto markets have mirrored the reaction of other financial markets. This underscores how mainstream digital assets have now become, as an increasing number of institutional investors have piled into Bitcoin this year.

“But for this reason, when they temporarily reduce exposure to most risk-on assets, despite the longer-term outlook, they also do the same with Bitcoin. In turn, due to Bitcoin’s mammoth market share, it weighs down the entire crypto sector,” the head of the fintech organization said.

He continued: “However, I think this a knee-jerk reaction from the crypto market. It will move on from this relatively quickly as it did with the delta variant in the summer.”

Bitcoin is often referred to as “digital gold” because like the precious metal it is a medium of exchange, a unit of account, non-sovereign, decentralized, scarce, and a store of value.

“In addition, investors will once again focus on the heightening global inflation fears caused by lingering supply-side issues,” says the deVere CEO.

Bitcoin is widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.

“This ‘inflation shield’ will continue to bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise and reputational pull – and further driving up prices.”

Echoing similar sentiments, Martha Reyes, head of research at digital asset prime brokerage and exchange BEQUANT, said: “The news of a new coronavirus variant coming out of South Africa led to a broad-based sell-off across asset classes.

“If lockdowns do ensue, which is not our base case scenario, that will lead to further helicopter money, which ultimately benefits digital assets.”

Ruud Feltkamp’s view supports the opinions of both experts. The CEO of cloud-based automated crypto trading bot Cryptohopper said: “Inflation is skyrocketing, and people are searching for more alternatives for their money on the bank. I don't think it'll take long until investors see this as a ‘cheap’ buying moment. We are still in the midst of the bull cycle, and I think rising inflation will lead to more money being allocated to stocks and crypto.”


Saudi women comprise 50% of flyadeal’s cabin crew as it doubles its fleet

Saudi women comprise 50% of flyadeal’s cabin crew as it doubles its fleet
Updated 27 November 2021

Saudi women comprise 50% of flyadeal’s cabin crew as it doubles its fleet

Saudi women comprise 50% of flyadeal’s cabin crew as it doubles its fleet
  • Kingdom’s budget airline vows to promote, nurture local talent

JEDDAH: Saudi Arabia’s budget airline flyadeal aims to nurture and promote local female talent as it's doubling its fleet by end of next year, its chief commercial officer told Arab News.
Ahmed Albrahim said the low-cost airline’s fleet contains 15 A320 narrowbodies, and it will continue to receive more aircraft of the A320 Neo class.
Albrahim expects the fleet to reach up to 30 aircraft by the end of 2022. 
The airline seeks to be the fastest-growing company in the region next year, he said.
He said that 50 percent of the airlines’ cabin crew consists of Saudi women and the number will continue to rise.
“We are very proud that we are creating jobs for our young Saudi talents, this year we recruited close to 130 females,” he said.
The airline seeks to empower Saudi women in the aviation industry, he added, saying: “We have the first chief people officer, which is a female, also the first female airport duty manager, and first female pilot.”
The low-cost airline launched its first direct flights from Jeddah to Dubai last week. The new route signaled the company’s first international journey from the airport.
A subsidiary of Saudia, flyadeal now operates six routes to the UAE daily — with the other five originating from Riyadh.
The aviation industry was worst hit by the coronavirus disease (COVID-19) pandemic. 
In a report recently issued by the International Air Transport Association, total airline industry losses from 2020 to 2022 are expected to reach $201 billion despite a post-pandemic improvement.
Net losses are expected to come in at $11.6 billion in 2022 after a $51.8 billion loss in 2021, IATA said in its latest outlook for airline industry financial performance, showing improved results amid the continuing COVID-19 crisis.
Demand is expected to stand at 40 percent of 2019 levels for 2021, rising to 61 percent in 2022.
Albrahim admitted that the last two years had been bad for the industry. Likening it to the 2008 global financial crisis, he said during that time “people lost their spending power.”
“Back in 2008 when the world witnessed the financial crisis, people lost their spending power,” he said, It was a very tough time for everybody including airlines.
However, he added, the COVID-19 has changed people’s behaviors due to social distancing measures and airlines have to work out different strategies to ensure a smooth recovery. Albrahim said people now want all operations carried out electronically or “touchless.”  
Albrahim said this is putting pressure on all airlines. However, the airline official expressed optimism that the industry will recover and the flyadeal will grow from a “lean startup” into a key aviation player.
“We were able to recover a lot because we are domestic airlines, and because we are one of the very few airlines in the region that follows the low-cost carrier,” Albrahim said.


Egypt, Israel sign memorandum on gas supplies for re-export

Egypt, Israel sign memorandum on gas supplies for re-export
Updated 27 November 2021

Egypt, Israel sign memorandum on gas supplies for re-export

Egypt, Israel sign memorandum on gas supplies for re-export
  • The MoU also considers the possibility of using the existing pipeline between the two countries to transport hydrogen in future.

CAIRO: Egypt and Israel have signed a memorandum of understanding to consider the possibility of increasing Israeli gas supplies to Egypt with the aim of re-exporting and using the pipeline between the two countries to transport hydrogen in the future.
Last year, Egypt and Israel announced the start of pumping Israeli gas to Egypt through the EastMed Gas Pipeline, with the purpose of liquefying it at Egyptian liquefaction stations and re-exporting it to Europe.
A statement issued by the Egyptian Ministry of Petroleum added that the agreement is part of efforts aimed at expanding the use of less polluting fuels to reduce greenhouse gas emissions in the region.
The MoU said that natural gas is a transitional fuel, as its use in the Eastern Mediterranean contributes to a significant reduction in emissions, especially after the sharp decline in the use of coal and petroleum in Egypt and Israel.
During the last few months, joint working groups from both countries held several meetings, during which a comprehensive review of the possibility of expanding natural gas supplies for re-export was conducted.
Tarek El Molla, Egyptian minister of petroleum and mineral resources, said that supporting joint cooperation in order to benefit from the natural resources in both countries is important.
Karine Elharrar, the Israeli minister of national infrastructures, energy and water resources, said Egypt is an important partner in achieving energy security in the region.


Sustainable fashion is not a trend, it’s a necessity, says e-commerce platform chief

Sustainable fashion is not a trend, it’s a necessity, says e-commerce platform chief
Updated 27 November 2021

Sustainable fashion is not a trend, it’s a necessity, says e-commerce platform chief

Sustainable fashion is not a trend, it’s a necessity, says e-commerce platform chief
  • E-commerce platform with environment at heart of its strategies

DUBAI: For many, sustainable fashion is an interest or trend. For the founders of global sustainable e-commerce platform Plain Tiger, it’s a necessity.
In the middle of the night, Oliver Baillie woke up in his new home in South Africa to find strange men in his house. He began thrashing, worried it was a robbery until his wife, Alexandra Baillie, explained it was the paramedics. He had had a seizure and needed to be taken to hospital immediately.
The prognosis wasn’t good; a brain tumor — with no prior symptoms – was the cause. Following surgery and treatment, it led to a year of healing practices for the entrepreneur, who had recently moved to Cape Town after a long career heading international operations at a leading British bank based in Dubai. 
“What I learned is that what’s good for the body is also good for the planet,” said Baillie, the co-founder and CEO, during the regional soft launch at the Mandarin Oriental Jumeirah in Dubai.

“A plain tiger is an orange butterfly found in the region and ‘they’ say seeing one signifies positive change. They kept landing on our conference room window as we were building the business. And so, we named the brand Plain Tiger: A global platform for conscious luxury lifestyle products.”
The first of its kind, the platform curates leading ethical and sustainable fashion, beauty and home decor brands from across the world. Many of the 185 brands are exclusively available through Plain Tiger in the Middle East and North Africa and represent the most carefully crafted products from over 20 countries across six continents. These are brands on the rise in cities like Paris, London, Milan, Sydney and New York.
“At a time when sustainability has such a strong focus in the region, it’s the perfect time to be launching in MENA,” said Baillie, who now moved back to Dubai with his wife. “Governments like those of the UAE and Saudi Arabia are driving positive change, and businesses are looking to improve their environmental impact.”  
Last month, Saudi Arabia’s crown prince launched a Middle East Green Initiative, aimed at raising $10.4 billion for an investment fund and clean energy projects to reduce carbon emissions. Meanwhile, the UAE will play host to global climate summit COP 28 in 2023. The steps are in place and brands like Plain Tiger have a true opportunity to make a difference.
The brand is also launching a sustainability accelerator in the region, inviting local startups to assess their ethical practices at early stages of building their businesses.
“Sustainability is a buzzword that can be thrown around, but we have really stringent requirements for brands hosted on our e-commerce platform,” said Baillie.
At a time when many businesses are still setting strategies to become net zero, Plain Tiger has already secured a “climate positive” status. Each order made has a positive impact on the environment thanks to Plain Tiger’s three-part strategy: Conscious product curation, minimizing company carbon emissions, and offsetting double the remaining carbon emissions by investing in reforestation projects in Uganda and Brazil through their partnership with leading offset provider Pachama. 
Plain Tiger also has a 70 percent female team. The featured designers and manufacturers are all selected for their expertise in their craft and commitment to ethical and sustainable practices, often leveraging processes steeped in tradition and indigenous ingredients or materials. Transparency and traceability is key to Plain Tiger’s ethos. 
“We believe you should know the hands that made your products,”  said co-founder and director, Alexandra Baillie. Her background in luxury retail includes Estee Lauder, La Mer and The Four Seasons spas.
From the packaging to the material, any product purchased on the site holds a promise of ethical luxury. Add to that the passion of the founders and you’ve got powerhouse potential with a lot of heart, too.


China’s industrial profits growth accelerates in Oct

China’s industrial profits growth accelerates in Oct
Updated 27 November 2021

China’s industrial profits growth accelerates in Oct

China’s industrial profits growth accelerates in Oct

REUTERS: Profits at China’s industrial firms grew at a faster pace in October, the statistics bureau said on Saturday, providing a buffer for a faltering economy battered by soaring raw material prices.
Profits in October rose 24.6 percent from a year earlier to 818.7 billion yuan ($128.1 billion), the official data showed, quickening from a 16.3 percent gain reported in September.
For the January-October period, industrial firms’ profits rose 42.2 percent year-on-year to 7.2 trillion yuan, slower than a 44.7 percent rise in the first nine months of 2021.
The industrial profit data covers large firms with annual revenues of over 20 million yuan from their main operations.
Prices in China have surged amid a power crunch and Beijing has been trying to cool a red-hot market for coal.