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The Egyptian State Supports Investment in the Green Economy

The green economy is a result of improving the economic situation while reducing environmental risks and the scarcity of natural resources. This leads to enhancing human equality and social welfare. The green economy is a model of economic development based on sustainable development and environmental economics. It is a structured approach to creating a clean society and environment that raises economic levels and drives society toward a better life, maintaining a balance with the environment across all forms of biodiversity.
The United Nations Environment Program has introduced a practical definition, defining the green economy as an economy that leads to improving human welfare and social equity while significantly reducing environmental risks.
At the field level, the green economy can be defined as an economy in which income and employment growth are driven by investments from the public and private sectors, which lead to the enhancement of resource efficiency, the reduction of carbon emissions, waste, and pollution, and the prevention of biodiversity loss and ecosystem degradation. These investments are also driven by growing market demand for green goods and services, technological innovations, and the adjustment of public tax policies to ensure prices appropriately reflect environmental costs.
These investments are also motivated by growing demand in the markets for green goods and services, technological innovations, and adjustments to public tax policies to ensure that prices adequately reflect environmental costs. The green economy is one of the mechanisms for achieving sustainable development, as it can encompass various opportunities such as promoting innovation, creating new markets, creating jobs, and contributing to poverty reduction.
- The Green Economy in the Context of Sustainable Development and Poverty Eradication:
The final document of the Rio+20 Conference highlighted the future we aspire to in the context of the green economy, sustainable development, and poverty eradication, as one of the important tools available to achieve sustainable development. The United Nations has called for supporting countries interested in the green economy by providing appropriate patterns, tools, and methodologies, guiding investments toward building natural capital and ecosystem services and supporting policies that will contribute to shaping income patterns, livelihoods, and well-being for the poor. These reforms will also lead to overall economic growth and stimulate more trade in goods produced sustainably.
- Achieving an Inclusive Green Economy Under the Sustainable Development Goals:
The Sustainable Development Goals provide an opportunity to reshape economic policy around key sustainability elements and achieve goals, with goal achievement being central to the 2030 plan. While the transition to an inclusive green economy can contribute to many goals, the different elements and associated policies for such an economy are of significant importance to achieving Goal (8) on decent work and sustainable economic growth and Goal (12) on sustainable consumption and production.
Through focusing on comprehensive green economy strategies to preserve and cultivate public capital and wealth, technological innovation, and job creation, a green economy program can contribute to inclusive and sustainable economic growth, productive full employment, and decent work for everyone (Goal 8). An integrated green economy approach can significantly facilitate this by complementing capacity-building efforts under the Ten-Year Framework of Programs on Sustainable Consumption and Production Patterns, supporting a variety of policies and measures that redirect public and private investment to transform consumption and production patterns (Goal 12).
- The Green Economy and Egypt's State Trends:
- The main targets of the government's work program include achieving the requirements of sustainable development by protecting natural resources and rationally exploiting them, expanding the use of clean technology, expanding new and renewable energy production projects, and benefiting from the vast natural potential that Egypt possesses for producing this energy. The program also includes the establishment of the world's largest solar power plant in the Benban region of Aswan, comprising 31 stations producing 1,550 megawatts at a cost of 3.4 billion euros, alongside the establishment of 14 new fourth-generation cities that rely entirely on new and renewable energy sources over an area of 450,000 acres. The government's work program also includes encouraging the transition to a green economy in many sectors.
- Increasing the share of renewable energy in the energy mix: Egypt seeks to implement ambitious plans for electrical interconnection with neighboring countries, making Egypt a hub for renewable energy in the region, as well as ongoing efforts to improve energy efficiency, reduce carbon and methane emissions in the oil and gas sector. Notably, the renewable energy strategy was revised to target 20% of total energy production by 2022, with the Higher Energy Council approving Egypt's energy strategy until 2035, aiming to achieve a renewable energy contribution of 42% of total electricity production by 2035.
- Adopting various initiatives that allow the private sector to invest in several fields such as waste-to-energy projects, investment in agricultural waste, and optimal economic exploitation of natural reserves. Institutions supporting and financing these initiatives play a major role in accelerating progress in all fields of the green economy.
- Seeking cooperation with the Green Climate Fund to benefit from financing mechanisms for private projects to mitigate and adapt to climate change, with three projects already secured (two in mitigation and one in adaptation).
- Establishing a market for green bonds to address climate change and support the growth of green projects in Egypt. Green bonds offer financing options for private sector companies and public sector entities looking to support climate and environmental investments. Egypt issued the first green bonds in the region worth $750 million in September 2020, which was one of three green bond issuances in the Middle East and North Africa over the past few years.
- Egypt has taken several steps towards a green economy through initiatives such as "Haya Karima" (A Dignified Life), rural Egyptian development, and providing clean drinking water and sanitation to the most needy villages. The country has also adopted a strategy in line with Vision 2030, implementing a comprehensive strategy that addresses the economic, social, and environmental dimensions of sustainable development, and lining canals to improve irrigation quality, environment, product quality, and public health.
- The plan for 2021/2022 focused on the environment and sustainable development. The state aims to double the percentage of green public investments from 15% in 2020/2021 to 50% by the end of 2024/2025, prioritizing the funding of green initiatives and investment projects as part of the government's vision and approaches for green recovery, making Egypt a leader in the Middle East in state plan greening.
- Increasing the reliance on clean transportation by expanding metro and rail networks and localizing the production of electric cars. Preparing a comprehensive hydrogen strategy, as Egypt has taken tangible steps to expand hydrogen production and localize the industry. Given Egypt's promising opportunities in green hydrogen production, availability of renewable energy sources, and vast land for projects and attracting investments, this supports the state's vision to become a regional energy trading hub. The establishment of the first dry port in the city of 6th of October is underway as part of a strategy to increase private sector participation in critical projects and support the transition to a green economy.
- Expanding water projects to enhance sustainable water resource management and reduce waste, including expanding wastewater treatment plants to make water suitable for agriculture. This includes the implementation of the Bahr El-Baqar Water Treatment Plant, treating 5.2 million cubic meters of water daily to reclaim approximately 400,000 acres in North Sinai. The state is working on implementing sustainable agricultural systems and reclaiming approximately 1.5 million acres to increase agricultural land by 20% by 2030.
Prepared by/
RPLF Team
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