MENA: A hotspot for climate change impacts and injustices

The 2022 United Nations Climate Change Conference (27th Conference of the Parties, COP27) in Sharm el-Sheikh, Egypt, ended with a breakthrough agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate disasters. The loss and damage funding relates to a broader discourse about the Global North’s historical and ongoing responsibility for global warming, which has destroyed the ecology and livelihoods of impoverished local communities in the Global South, and its resulting ecological debts.

The Middle East and North Africa region has suffered from this legacy of climate injustice for decades. Although its historical and current share of carbon emissions is less than 1% of the global total, MENA is among the least climate resilient regions in the world. It has high vulnerability to climate impacts on economies and livelihoods with limited resources to enact adaptation measures. Indeed, MENA is one of the world’s most water-stressed regions, where more than 60% of its population has difficulties accessing potable water. The region relies on climate-sensitive agriculture and its flood-prone coastal zones are home to both a large share of the population and substantial economic activity. Because of these factors, rising temperatures and extreme heat waves associated with changing precipitation patterns are expected to accelerate desertification, decrease arable lands, reduce crop yields, and ultimately disrupt agriculture patterns and food chains in a way that jeopardizes food security. Furthermore, climate change is associated with other severe weather impacts like droughts and storms. As such, more people, especially the poorest and those in the most vulnerable areas, will be compelled to migrate within their countries. In addition, climate change-related sea level rise increases the likelihood of flooding, with Egypt’s second-largest city Alexandria and Basra in Iraq identified as at high risk of future recurring floods. In this way, climate change is placing additional pressure on already scarce resources in the arid environments of the MENA region and reinforcing pre-existing threats of food insecurity, poverty, water stress, social conflicts, and political instability.

Climate finance in the MENA region: Tremendous challenges and slow progress

Given the risks associated with climate change in the MENA region, there is a pressing need to provide sustainable financing resources for climate adaptation and mitigation. Adaptation refers to increasing resilience to environmental and social hazards associated with severe climate events, while mitigation focuses on accelerating the transition to a resilient, inclusive, and low-carbon energy economy and reducing carbon emissions. According to the Climate Policy Initiative, financial flows to the MENA region to fund climate mitigation and adaptation projects have been among the lowest compared to any other global region in recent years. For example, while East Asia and the Pacific Islands region received the greatest share of international climate finance, with an estimated total of $293 billion throughout 2019 and 2020, the MENA region received the lowest share, with just $16 billion during the same period.

Moreover, the financing the MENA region does receive is unevenly allocated. According to the Climate Finance Regional Briefing published by Heinrich Boll Stiftung last year, 71% of international climate finance to the region from 2003 to 2021 went to mitigation projects despite the region’s pressing adaptation needs. According to a 2021 report from the U.N. Environment Program, mitigation projects in the energy, transport, and infrastructure sectors received more than 75% of the total international financial flows, while less than 15% went to water and sanitation projects. Most of this finance was in the form of loans or concessional loans, dedicated to a few renewable energy mega-projects and provided by the Clean Technology Fund (CTF) and the Green Climate Fund (GCF). Furthermore, the funds are not equally distributed among recipient countries: Egypt and Morocco received the majority, at 28% and 19% of the region’s total approved climate finance respectively, while fragile and conflict-affected countries — like Libya and Syria — receive little or no climate finance via the multilateral climate funds.

Domestically, governments in the MENA region are taking steps to mobilize climate finance by providing an encouraging environment and innovative financial instruments that boost climate adaptation and mitigation initiatives. For example, Egypt launched the first green sovereign bond in the region, worth $750 million and sold at a 5.25% yield. Similarly, the Saudi Electric Company (SEC) established a framework for “green sukuk” (sharia-compliant bonds) and issued two tranches, each worth $650 million. Qatar National Bank issued a $600 million green bond, the largest such bond from a commercial bank in the region aimed at encouraging investment in sustainable projects. These green bonds are financial tools for countering the impact of climate change in different countries in the MENA region by developing green energy, clean transportation, waste management, water efficiency, and green buildings, among other environmentally friendly products and projects. Other governments and financial institutions are also developing green bonds and sustainable development bonds to draw capital and channel investments into sustainable and climate resilience projects. However, the MENA region accounted for just 1% of the total $228 billion worth of green bonds issued in 2020, underscoring the size of the untapped opportunity in the region.

The Bridgetown Initiative and the international architecture for climate finance: Implications for the MENA region

Given the previously mentioned financial challenges, ensuring the delivery of sufficient loss and damage funding to climate-vulnerable countries — including MENA countries — is paramount. This funding is urgently needed to halt the climate crisis and to support a smooth and just transition to a low-carbon and climate-resilient MENA.

Some traditional instruments might help to compensate those countries suffering loss and damage caused by the climate crisis. Examples include social protection, contingency finance, catastrophe risk insurance, and catastrophe bonds that could provide a buffer and rapid payouts in the wake of climate catastrophes. In addition to traditional financing mechanisms, innovative finance tools are needed to address the urgency of the crisis. This is why the Bridgetown Initiative was a significant breakthrough at COP27 — it calls for “the reform of multilateral development banks and financial institutions,” asserting that the Bretton Woods institutions are not helping vulnerable countries, including MENA countries, adapt to climate risks. The Bridgetown Initiative also argues that the current global climate finance system is compounding the debt crisis and the risks associated with climate change in poor developing countries. Central to the initiative is establishing more concessionary finance mechanisms for governments by multilateral development banks to fund adaptation projects. These multilateral development banks would work with the International Monetary Fund (IMF) to rechannel their special drawing rights (SDRs) to allow member countries to get low-interest, long-term loans for climate adaptation.

To address the chronic debt crisis, particularly in developing countries vulnerable to climate change and natural disasters, the Bridgetown Initiative proposes to suspend the debt service for two years after a climate disaster and to provide immediate funds for afflicted countries to spend on social programs and invest in climate resilience projects. The funds must be in a grant-like form to avoid relying too heavily on the budgets of climate-vulnerable countries already suffering from chronic debt crises. Therefore, it proposes to fund such grants by putting a 2% tax on fossil fuel exports to shift the burden from the poorest indebted countries to the polluting nations. The Bridgetown Initiative also calls for financing reconstruction programs for countries where loss and damage from destructive climate events exceeds 5% of their national income.

New momentum for just climate financing

Unfortunately, concrete climate finance commitments on behalf of developed countries remain abysmal, and many climate-vulnerable countries still struggle to mobilize climate finance. However, the Bridgetown Initiative formulated at COP27 in Sharm el-Sheikh presents a promising opportunity for securing the climate finance needed to achieve a just green transition, particularly in vulnerable and impoverished communities in MENA. Most important are the stipulations of concessional financing schemes provided by financial institutions, suspending the debt service for climate-vulnerable countries, and imposing taxes on polluting oil and gas companies to pay for climate adaptation and resilience. If these proposals take root and move to center stage at the upcoming IMF and World Bank meetings, then the international community can deliver meaningful change to the debt, aid, and funding architecture and help climate-vulnerable communities in the Global South — and elsewhere — meet their climate pledges without bearing the brunt of climate injustice.


Zeina Moneer holds a PhD in environmental politics from Freiburg University in Germany and her research interests include environmental movements, environmental justice, environmental communication, international polices of climate change negotiations and adaption, and sustainability transition with a particular focus on the MENA region.

Photo by Gehad Hamdy/picture alliance via Getty Images

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