Abu Dhabi, UAEThursday 23 May 2019

‘Circular economy’ could save GCC cities $138bn over a decade

Regenerative approach could achieve cost savings experts say

Visitors watch a 3D presentation during an exhibition on 'Neom', a new business and industrial city, in Riyadh, Saudi Arabia. Reuters.
Visitors watch a 3D presentation during an exhibition on 'Neom', a new business and industrial city, in Riyadh, Saudi Arabia. Reuters.

By minimising waste and making the most of resources through a circular economy, GCC cities could save $138 billion (Dh507 billion) and 148 million tonnes of C02 emissions between 2020 and 2030, according to the managing director at Strategy&, Middle East.

Speaking at the London Business School Middle East conference in west London on Friday, George Sarraf said: “There is a population growth in the Middle East that is very much concentrated in the cities. The focal point of the economy is very much skewed to very few cities and at the same time, those cities are generating a huge amount of waste and inefficiencies.”

A circular economy is one that focuses on a regenerative approach to achieve cost savings, through recycling and repairing.

“We have benchmarked factors like electricity consumption, water consumption and level of recycling across different cities and the numbers for the Middle East are quite concerning in some aspects,” he said.

This has been driven by policies that have been in place for a long time that either made resources too cheap or did not prioritise efficiency.

Strategy&, the consulting team at accounting firm PricewaterhouseCoopers, reviewed a sample of 330 cities and looked at how to optimise resources, improve recycling and streamline manufacturing to save costs.

The model looked at three elements: built environment, mobility and community. Built environment covers housing and commercial infrastructure, mobility covers public transport, personal cars and traffic; community includes housing infrastructure, electricity and water and recycling.

Mr Sarraf also compared green field and brown field infrastructure products – whether new buildings are built on new land or land where there is existing infrastructure. The Strategy& executive said it will initially be easier to implement a circular economy in green field infrastructure projects, as there are no existing buildings or policies in place. He adds that resources like electricity and water will equally impact both brown field and green field projects, because their policy is determined on national level.”

Mega cities planned in the region, such as Duqm in Oman and Neom in Saudi Arabia, could also present opportunities to strengthen the economy, says the executive.

Speaking to The National on the sidelines of the conference, Junaid Iqbal, managing director at ride hailing app Careem, said that in mega cities, the business “needs serve every price point” and branch out of normal taxi services.

In some of the larger cities, like Karachi or Cairo, 25% of Careem’s revenues come coming from bike riding services. In Cairo, a significant amount of Careem’s revenues come from working with bus businesses too.

“When you look at megacities, you have to solve for everything,” he said. “If you go from neighbourhood to neighbourhood, there will be neighbourhoods in Karachi in Pakistan that look like the first world and others that look truly third world.”

“Being a technology player, you have to be the one that bridges that gap between them and all and is agnostic to income levels. You try and design your service so that it can help the economic process for all.”

Updated: March 8, 2019 07:39 PM

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