Towards a Green Economy in Jordan


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Executive Summary

·   The green economy can lead to a total of JOD 1.3 billion in revenue, 50,000 jobs, and improved resource management in Jordan over a 10 year period

·   Key sectors targeted for the green economy include Energy, Water, Transport, Waste management, Agriculture, and Tourism

·   Further progress on the green economy will require financial incentives, improved government leadership, and the engagement of all stakeholders

Key Findings

Energy

·   13% of GDP is spent on energy imports, and Egypt supplies 80% of Jordan’s energy needs. Only 4% of energy is produced locally.

·   Power demand is expected to grow by 7% per year between 2010 and 2020

·   Current energy policy, heavily relying on oil imports, is adversely affecting the growth of industrial production

·   Jordan’s removal of subsidies on gasoline and oil derivatives resulted in a substantial rise in oil prices, a slight decrease in fuel consumption, and created new opportunities for growth in cleaner energy sources until the subsidies were reinstated due to political pressure

·   It is estimated that Jordan has 50 billion tonnes of oil in its shale reserves with one oil shale deposits having a capacity to produce 36,000 barrels a day, an estimated third of Jordan’s daily consumption

·   Investing JOD 195 million annually for the next 10 years in energy efficiency for industry can save Jordan 20% of its energy usage over the next 12 years. Furthermore, shifting towards cleaner energy in Jordan can result in savings on imports, a smaller trade deficit, less inflation, and increased employment.The Jordan National Energy strategy is expected to generate 3,000 new jobs for the installation, maintenance, and operation of renewable energy facilities by 2020

 

Transport

·   Transportation is responsible for 37% of total energy demand with approximately 47% of Amman’s residents using public transportation and 53% using private vehicles (2009)

·   High customs and registration fees are one reason for the continued use of old, more-polluting vehicles. Promoting cleaner fuel vehicles use can save JOD 40 per vehicle annually, for a total annual savings of JOD 44 million. Since the government eliminated tax and customs on hybrid vehicles in 2009, 4,800 have been imported, though numbers have decreased since the government reinstated duties in 2010

·   Enhancing public transport would lead to reduced energy consumption, a more mobile workforce, decreased unemployment for those in rural areas, and increase the competitiveness of the economy

·   Financial resources saved from “greening” the transport sector could result in the creation of 10,000 new jobs per yearapproximately

 

Water

·   Jordan is ranked third of 18 countries at risk for water insecurity

·   The agriculture sectoraccounts for 71% of water demand though only 5% of land is considered arable.Forests make up less than 1% of Jordan’s land area, due to deforestation

·   Currently rural water users get water approximately every 12 days, while urban users receive water weekly

·   By 2020, total demand for water is expected to increase to 1.7 billion cubic meter. By 2030-2050, the country’s surface aquifers will be severely drained, and 80% of the land will change from semi-arid to arid

·   Water losses total approximately JOD 100 million annually, and the cost of general environmental degradation is equal to 2.35-5% of GDP

·   Water subsidies cover 48% of the cost of water with an average cost of US 0.71 per cubic meter

·   Reducing water usage by 20% could save up to 200 million cubic meters of water annually, and total job creation from moving to a green economy in water is estimated at 31,000 jobs

 

Waste Management

·   Jordan’s urban population almost doubled from 1952 to 2004, leading to increased pressure on solid waste management systems in urban areas

·   Management of hazardous and medical waste is inadequate, as most is disposed without treatment

·   Recycling can contribute in large to energy and air pollution savings

 

Agriculture

·   Jordan is a net food importer with 60% of the food consumption imported, while 20% of its agricultural production is exported (which also represents the exporting of water)

·   Agriculture contributes 3% to GDP, though with backward and forward linkages it is responsible for 28% of GDP and 20% of exports, employs 3% of the labor force, and supports livelihoods for 20% of the population

·   Agriculture is the largest consumer of water in Jordan, while productivity of farmland is decreasing due to over-use of soil and a rapidly increasing population. Agriculture also suffers from cyclical droughts and unpredictable frosts

·   It is estimated that if 5% of the total agricultural land becomes organic farmland, it will lead to JOD 111 million in investment and the creation of 1,700 jobs. However, a large obstacle to the promotion of organic farming is the absence of an organization to asses and certify organic produce

 

Sustainable Tourism, Eco-Tourism

·   Tourism accounts for 10% of GDP, and is the largest export segment and second largest private-sector employer, with over 90,000 people employed (2010). In 2009, 7.1 million tourists visited Jordan

·   It is estimated that if 5% of all tourists used sustainable infrastructure, 3,900 jobs will be created 

Recommended Actions and Initiatives

EnergyInitiatives

·   Diversify energy sourcesunder the terms of the National Energy Strategy 2008-2020:

o   29% natural gas,

o   14% oil shale,

o   10% renewable energy, and

o   6% nuclear energy

This will help decrease oil usage from 60% to 40% of total energy sources

·   Build, operate, and transfer wind and solar facilities

·   Remove sales tax on solar water heaters

·   Modify building codes to foster efficient energy usage

·   Provide financial incentives, such as grants and tax exemptions, to encourage use of energy-efficient vehicles

·   Create the Jordan Renewable Energy and Efficiency Fund (JREEEF) to increase investment and development in the sector

 

Transport Initiatives

·   Continue pursuing the Amman Public Transportation Strategy to increase public transportation options and raise public transportation use to 65% up from 47% by 2015

 

WaterInitiatives

·   Improve water conservation and treatment, and launch public and private sector efforts to minimize water usage in office buildings

·   Connect more households to asewerage system(35% not connected) in order to increase the amount of treated wastewater

 

Waste ManagementInitiatives

·   Continue with public-private partnerships and private investments in recycling efforts in Amman

 

AgricultureInitiatives

·   Promote organic agriculture, and aim for 5% of Jordanian farms to offer organic goods

·   Increase government participation in organic farming by enacting regulations regarding proper labelling for organic goods and creating a government action plan for organic farming

·   Create an “Organic Farming Cooperative” to provide a direct link between agriculture producers, consumers, and the public sector

 

Sustainable TourismInitiatives

·   Develop plans for ecotourism in natural sites such as the Dead Sea

·   Target hotels and tourist accommodations for conservation efforts

 

Enabling EnvironmentInitiatives

·   Further enhance environmental conservation through greater policy coordination, monitoring and enforcement, and the reduction of subsidies that are counterproductive to environmental conservation

·   Increase the capacity of the Ministry of Environment particularly by employing qualified specialists and increasing public spending on environmental issues, currently at 0.5% of the government budget

 

Report Name

Date

Timeline

Towards a Green Economy in Jordan

August 2011

None

Author

Supporting Donor

Envision Consulting Group (EnConsult) Jordan

United Nations Environmental Programme (UNEP)

Sector

Lead Ministry

Environmental Sustainability

Ministry of Environment

Key Topics

Agriculture – Energy – Environmental Conservation –Financial Incentives – Food Security – Job Creation – Hybrid Vehicles –Organic Farming – Public Transportation – Renewable Energy – Savings – Subsidies –  Sustainable Tourism – Tax Exemptions – Waste Management – Water Security

 

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