The key lesson to draw from the foregoing analysis is not only that strengthening the environmental regulatory and institutional framework will lead to compliance with environmental standards and practices but also that transparent enforcement of the rules and regulations will create conducive climate for increased participation
25 1.7 Opportunities for the Private Sector
of the private sector in environmental businesses. One stark difference between the environmental concern in Saudi Arabia and other countries such as China is that in the latter situation the main environmental challenge is posed by acid rain and sulphur dioxide (SO2) while in Saudi Arabia the focus is on tackling the menace of carbon dioxide (CO2). While reduction of SO2 can incur significant costs to society, the presence of CO2 can present profitable business opportunities for the private sector, as CO2 can be injected into the ground to enhance the efficiency of oil explo- ration. It can also provide significant bankable investment opportunities in the area of carbon capture and storage. Thus, strengthening the environmental regulatory and institutional framework as well as providing appropriate incentives will attract substantial private sector activities in environmental activities, thereby achieving both commercial and social objectives for Saudi Arabia.
In addition, there are many other channels through which private sector can participate in environmental protection and pollution control activities, including investments in environmentally oriented activities and businesses such as envi- ronmental resources (e.g. clean energy investments including energy efficiency);
environmental equipment (e.g. clean technology equipment); and environmental services (e.g. waste treatment, recycling and analytical and consultancy services).
For example, enforcing the regulation on environmental impact assessment for new projects will boost the market for consultancy and advisory services on environ- mental issues and projects. The private sector could also play a key role in providing environmental awareness and other related services.
According to the International Renewable Energy Association (IRENA), around US$ 109 billion are required as potential investments of renewable energy in Saudi Arabia to meet one third of its electricity requirements by 2030.10 This will pro- vide considerable profitable investment opportunities for the private sector over the coming decades.
Furthermore, ample business opportunities for the private sector exist in the area of hazardous waste management in the Kingdom where around 1.2 million tonnes of such waste were produced in 2009, and these were forecast to increase to nearly 2.0 million tonnes by 2020. These estimates of hazardous waste are based on the Kingdom’s population growth rate as well as the projected growth rates of the various sectors that largely generate such wastes, including petrochemical waste, medical waste, general manufacturing and commercial waste and wastewater treat- ment sludge. According to Saudi Arabia’s Eighth Development Plan 2005–2009 document, oil-refining sector is projected to grow by 4.3 % annually over the period 2004–2024, while manufacturing, healthcare and wastewater are forecast to grow by 6.7 %, 7.0 % and 2.5 % during the same period.11 These along with a population growth rate of around 0.87 % would combine to produce nearly 2.0 million tonnes of hazardous waste in less than a decade, providing profitable investment opportu- nities for the private sector in the waste treatment business sector. In essence, the
10 Alsharq Alawsat newspaper, 23 December 2012 Issue No. 12444.
11 The Development Plan document was prepared by the Saudi Arabia Ministry of Economy and Planning.
26 1 Environmental Challenges, Regulations and Institutions in Saudi Arabia opportunities lie largely in the development of economically feasible waste man- agement facilities as the Kingdom still has inadequate or undeveloped facilities to effectively manage hazardous wastes.
In the petrochemical industry, there are significant investment opportunities in the treatment of the following types of waste: wastewater treatment sludge and in- cinerable as well as non-incinerable (spent catalyst) petrochemicals. The opportuni- ties are even more in the general manufacturing sector, which consists of the follow- ing types of waste: spent solvents; acid, alkaline or saline wastes; used oils; spent chemical catalysts; industrial effluent sludges; metallic wastes and glass wastes;
mineral wastes; combustion wastes; discarded vehicles, batteries and accumulators wastes; e-wastes; contaminated soils and polluted dredging spoils; and solidified, stabilized or vitrified wastes. The healthcare sector too provides huge investment opportunities in the disposal of medical wastes. Each of these wastes presents op- portunities in the business of waste management, which would require different treatment methods and facilities. Although the waste treatment methods may vary across the different types of waste, the most common approaches would revolve around landfill disposal, solidification prior to landfill disposal, physical chemical treatment and incineration techniques.
Hazardous waste exists everywhere in the Kingdom, but the bulk of it is gener- ated in most major cities, especially in Riyadh, Jeddah, Makkah, Madinah and the Eastern Province. It is reckoned that most of the potential waste treatment facilities would, however, be based in the Makkah and Riyadh Provinces due to the cosmo- politan nature of these areas.
The success of the waste treatment business will, however, depend largely on the effectiveness of the regulatory environment as well as enforcement and com- pliance mechanisms for waste management requirements. But the Government of Saudi Arabia is now more than ever before keen on strengthening the regulatory framework which would consequently spur increased activities in waste manage- ment services, such as recovery and recycling. For example, the Kingdom’s General Environmental Regulations and Rules for Implementation discussed earlier con- tains the basic ingredients for an effective management of hazardous wastes but the regulatory system, including the relevant agencies, would need to be strengthened to meet the administrative challenges of dealing with a rapidly growing demand for a hazardous waste management system.
27
Chapter 2
Environmental Concerns and Policies in Saudi Arabia