INTERVIEW: ‘Hero of the Planet’  Bill McDonough calls for a rethink of carbon in the circular economy

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Updated 30 August 2020
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INTERVIEW: ‘Hero of the Planet’  Bill McDonough calls for a rethink of carbon in the circular economy

  • World-renowned sustainable design advocate explains Saudi Arabia’s leading role in global energy transition

Bill McDonough pulled no punches. “It’s a very, very serious issue. The science is clear and the signals are seriously scary. Let’s just face it,” he said during an hour-long Zoom meeting from his home in Virginia in the US.

He was talking about the threat to humanity from environmental pollution and resulting climate change, and he is well-qualified to talk about it. Called “A hero for the planet” by Time magazine, and the only recipient of the US Presidential Award for Sustainable Development, McDonough is regarded as the “father of the circular economy,” the strategy that aims to transform the lives and livelihoods of humanity — before environmental disaster does that for us.

Now McDonough has joined forces with Saudi Arabia to meet that challenge and, in particular, to determine the place of hydrocarbon fuels — the lifeblood of the Kingdom — within the coming energy transition.

“This requires massive heroic behavior. Let’s do something over the next 10 years that will astonish our children,” he said, hammering home the scale of the challenge.

That message would not be out of place in the preachings of many environmental agitators, but McDonough brings to it intellectual pedigree and a track record of pragmatic application. When he says, “I’m going to design buildings like trees,” it is much more than just a slogan.

Born in Tokyo, as a child McDonough pondered big questions like the destruction of Hiroshima by the atomic bomb, dabbling in physics, chemistry and international relations before settling on architecture as a profession.

The concept of the “circular economy” grew out of his work in regenerative building design on the “cradle to cradle” principle — the idea that human constructions should be built with future generations firmly in mind.

International recognition for his work rose steadily from the environmentally aware 1990s until publication — along with Michael Braungart — of the book “Cradle to Cradle — Remaking the Way We Make Things” in 2002.

The principles in the book were adopted by the Chinese government in its 5-year plans and by the World Economic Forum in 2014. In Davos, McDonough built a structure called the ICE House — with the help of SABIC of Saudi Arabia — to illustrate the concept of sustainable design.

That collaboration with the Kingdom was evidence of an increasingly close relationship. McDonough had earlier met Prince Abdul Aziz bin Salman, the Saudi energy minister, and found an enthusiastic listener for his ideas.

“I know this was natural to him, it was all intrinsic to his thinking. One of the most elegant parts of the dialogue is that I really enjoy working with him, talking to someone who has thought as deeply about this as he has,” McDonough said of the prince, who made energy efficiency a keystone of the Kingdom’s energy strategy.

Those conversations made him think more about the role of carbon within the circular model, which had three guiding tenets.


BIO

Born: Tokyo, 1951

Education

  • Dartmouth College,  Hanover, NH, US
  • Yale University, New Haven, CT, US

Career

  • Dean of architecture, University of Virginia 
  • Founder, McDonough Innovation
  • William McDonough & Partners
  • Relationships with several leading global universities and the World Economic Forum

Everything is a resource for something else; in nature, the “waste” of one system becomes food for another, either through biological or technical process.

Second, energy should be clean and renewable, with an emphasis on solar sources as well as wind, geothermal and other forms of energy.

Third, celebrate the diversity in local ecosystems in which design is adapted to specific circumstances in an “elegant and efficient” way.

“That is the basis of the ‘cradle to cradle’ approach — waste equals food, celebrate diversity, and use renewables, especially solar. It’s a beautiful thing,” McDonough said.

In a 2016 article in the magazine Nature, he coined the phrase that was picked up by environmental realists around the world, and especially in Saudi Arabia: “Carbon is not the enemy,” which seemed an appropriate rallying cry for a country and an economy that owes its modern development to hydrocarbons in the form of oil.

“I had this revelation when they asked me to work on it, because this is actually super-important. Carbon is actually a material in the circular economy, but it’s also a fuel, which is very unusual, so it deserves special attention. We decided to start working on this with the Saudis,” he said.

The relationship with SABIC went back to 2015, but he found his services much in demand as plans for the megaprojects of the Vision 2030 strategy advanced. He became an adviser to the Red Sea Development Company, the Royal Commission for AlUla, and for the Al-Soudah project run by the Public Investment Fund, as well as a member of the higher council of NEOM, the huge urban development planned for the Kingdom’s northwest.

Earlier this year, McDonough became an adviser and collaborator with the King Abdullah Petroleum Studies and Research Center in Riyadh, and delivered one of the keynotes for the Kingdom’s Energy Ministry at the G20 energy meeting in March.

His thinking crystallized. “The problem is not carbon — the problem is us. Carbon is an innocent element, and like I pointed out, there is the sun, there is carbon in the atmosphere, and then there is the soil, also carbon. If you say you want to be carbon free, think about it — are you saying to want to decarbonize yourself? Impossible,” he said.

He classes carbon into three kinds, and has an intricate set of slide illustrations to emphasize the point. “Living carbon,” which is an essential ingredient to human life and the basis for all agriculture. “It’s a positive thing to want to make more living carbon,” he said.

Then there is durable carbon, which is also a positive when it is an enduring form, like a building, or a city, or — the example he gave — a piece of paper, which can last for centuries in the form of a book.

Then there is the third kind — “fugitive” carbon — which he called “the big whoops.” This is the form that escapes into the atmosphere during industrial, transportation and manufacturing processes, or is washed up on a shoreline as plastic waste.

“It’s probematic to have durable carbon go fugitive,” he said.

It almost goes without saying that McDonough is a firm believer in the various international accords, especially the Paris agreement on climate change, that seek to limit, and even reverse, environmental damage by controlling output of “fugitive” carbon into the atmosphere, and these limits are built into all his models. “We have to work within those limits,” he said.

The main solution to fugitive is the process known as CCUS — carbon capture, utilization and storage — which has also become a major plank of the Kingdom’s energy strategy. CCUS techniques are implemented by Saudi Aramco and in NEOM. “What’s going on at NEOM is phenomenal and magnificent, because they’re planning on running on 100 percent renewable power,” he said. “All of a sudden they’re going to be making hydrogen with electrolysis. So we’re going to have what we call ‘green hydrogen,’ which is a magnificent prospect for the human future,” he said.

McDonough does not like the term “fossil fuels,” which he says encourages the idea that the only use for hydrocarbons is to burn them; nor does he like the phrase “hydrocarbon resources.” “Let’s just call them sources that we get from nature,” he said.

Just as important, fugitive carbon can be transformed into a variety of materials, like plastics and polymers, that are essential for human life. 

McDonough said that the work of SABIC, the Saudi petrochemical group now owned by Aramco, in this regard was “especially important.” 

Nor is McDonough a fan of those on the extreme wing of the environmental movement who say the world should stop using hydrocarbon fuels completely.

“I think the big picture for all of us in terms of social benefit, and intelligent behavior and design is that we do want inexpensive energy for everyone so they can make their lives better. We just don’t want to destroy the atmosphere,” he said.

The challenge is to meet the environmental standards most countries agree are necessary to prevent the warming of the Earth by more than 2 degrees Celsius above pre-industrial levels by the middle of the century, and McDonough believes there has to be a unified commitment on the part of humanity to meet this essential target.

McDonough has worked with the US space agency NASA on building design, producing some of the most advanced and environmentally friendly constructions in the world. “President Kennedy famously said we were going to do a moonshot, and within 10 years man was walking on the moon. I’d like to do an Earth shot. 

Let’s put Mars off for a little bit. Before I go to work on the red planet, can I come back to the blue one?” he said.

Does he think humanity can get there by 2050 and pull itself back from the brink of climate catastrophe? “I think so. I think we  have to,” he said.


UNCCD COP16: Saudi Arabia announces Green Zone to combat land degradation

Updated 18 November 2024
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UNCCD COP16: Saudi Arabia announces Green Zone to combat land degradation

RIYADH: Saudi Arabia will host a special UN forum to combat desertification with the introduction of a dedicated Green Zone and thematic days for the first time in the event’s history. 

As part of its presidency of the UN Convention to Combat Desertification COP16, the Kingdom has announced a dedicated area focused on raising global awareness about land degradation, while enabling key decision-makers from scientific, non-governmental, political, business, and at-risk communities to find and fund lasting solutions. 

The Green Zone will host thematic days designed to rally action on critical issues, including agri-food systems and finance, during the conference set to take place from Dec. 2-13 at Boulevard Riyadh City. 

This initiative aligns with the Saudi Green Initiative target to turn 30 percent of the Kingdom’s land into nature reserves, plant 10 billion trees, and restore 40 million hectares of degraded land. 

“Land degradation, desertification and drought impact almost every corner of the planet, and every living being on it, from the species at risk of extinction to the lives and livelihoods impacted by severe drought,” said Osama Faqeeha, deputy minister for environment at the Ministry of Environment, Water and Agriculture, and adviser to the UNCCD COP16 Presidency. 

“Saudi Arabia will host the first-ever UNCCD COP16 Green Zone to mobilize the international community and maximize the opportunity during December’s conference of delivering lasting global change,” he added. 

There will also be a Blue Zone, which along with its green counterpart will feature seven thematic days designed to foster action and dialogue among key stakeholders. 

Land Day will focus on land restoration initiatives and nature-based solutions, while the Business for Land Forum will bring together international leaders to discuss the economic importance of sustainable land practices. 

Finance Day will address ways to close the financing gap in land degradation, along with a special ministerial dialogue and innovations in Sustainable Land Management financing. Governance Day will focus on improving women’s land rights and address policy issues surrounding land tenure and resource governance. 

Agri-Food Systems Day will spotlight food security, crop resilience, and sustainable farming. Resilience Day will explore water scarcity, drought resilience, and early warning systems for sand and dust storms. 

People’s Day will feature a youth caucus to engage young people, as 1 billion people under 25 in regions dependent on land and natural resources for jobs and livelihoods face significant challenges. 

 


Alfanar Projects, SEC sign $5.33bn deals to support Saudi energy modernization 

Updated 18 November 2024
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Alfanar Projects, SEC sign $5.33bn deals to support Saudi energy modernization 

RIYADH: Energy deals worth SR20 billion ($5.33 billion) have been signed between Alfanar Projects and Saudi Electricity Co. to advance the Kingdom’s power modernization and sustainability efforts. 

The agreements, announced during the Energy Localization Forum hosted by the Ministry of Energy, include the construction of the Middle East’s largest High-Voltage Direct Current Converter Station, according to a press release.  

This facility, developed in partnership with China Electric Power Equipment and Technology Co., will deliver 7 gigawatts of power between the Central, Western, and Southern regions. 

The deals also include projects for battery storage systems, smart distribution centers, and renewable energy integration, aimed at improving grid reliability and supporting Saudi Arabia’s Vision 2030 goals of energy self-sufficiency and sustainability. 

Saudi Arabia aims to get 50 percent of its power from renewable energy by 2030, with a total capacity of 130 GW. This includes 58.7 GW from solar and 40 GW from wind, making it the most ambitious renewable energy target in the Gulf Cooperation Council. 

Amer Al-Ajmi, executive vice president of sales and marketing at Alfanar Projects, said: “The confidence placed in us by the Ministry of Energy, through its representative, Saudi Electricity Co., affirms our commitment to deliver and execute transformative projects of this scale.”  

He added: “At Alfanar Projects, we combine our robust resources, technical expertise, and a highly skilled national workforce to create a sustainable energy infrastructure that supports the Kingdom’s self-sufficiency goals and strengthens its role as a leader in renewable energy.” 

The signing ceremony was attended by Saudi Energy Minister Prince Abdulaziz bin Salman, Minister of State Hamad bin Mohammed Al-Sheikh, and Minister of Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef. 

Other key representatives included Khaled Al-Ghamdi, CEO of Saudi Electricity Co., and Sabah Al-Mutlaq, vice chairman of Alfanar Co. and managing director of Alfanar Projects, who represented both organizations. 

Alfanar Projects is a Saudi-based company developing sustainable energy projects that support economic growth and environmental goals in the Kingdom and beyond. 

Earlier this month, Saudi Electricity Co. reported a net profit of SR5.6 billion for the first nine months of 2024, up from SR 4.6 billion last year. The company’s power generation capacity grew by 1.4 percent, with its directly owned capacity rising to 56.9 GW. 


Closing Bell: Saudi benchmark index edges up to close at 11,830

Updated 18 November 2024
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Closing Bell: Saudi benchmark index edges up to close at 11,830

RIYADH: Saudi Arabia’s Tadawul All Share Index rose by 0.16 percent or 18.40 points to reach 11,830.38 points on Monday.   

The total trading turnover of the benchmark index was SR5.4 billion ($1.46 billion), as 78 of the listed stocks advanced, while 151 retreated.   

The MSCI Tadawul Index increased by 1.22 points, or 0.08 percent, to close at 1,487.07.    

The Kingdom’s parallel market Nomu also increased, gaining 119 points, or 0.40 percent, to close at 29,596.35 points. This comes as 44 of the listed stocks advanced while as many as 34 retreated.   

The index’s top performer, the National Co. for Glass Industries, saw a 9.11 percent increase in its share price to close at SR53.90.   

Other top performers included Arriyadh Development Co., which saw a 5.76 percent increase to reach SR27.55, while Almasane Alkobra Mining Co.’s share price rose by 4.41 percent to SR68.70.  

The Power and Water Utility Co. for Jubail and Yanbu also recorded a positive trajectory, with share prices rising 3.26 percent to reach SR57. CATRION Catering Holding Co. also witnessed positive gains, with 3.20 percent reaching SR129.

East Pipes Integrated Co. for Industry was TASI’s worst performer, with the company’s share price dropping by 3.78 percent to SR137.40. 

Arabian Pipes Co. followed with a 3.68 percent drop to SR109.80. Alkhorayef Water and Power Technologies Co. also saw a notable drop of 3.31 percent to settle at SR140. 

Elm Co. and MBC Group Co. were among the top five poorest performers, with Elm Co.’s share declining by 3.24 percent to settle at SR1.127.60 and MBC Group’s falling by 3.18 percent to sit at SR44.15.

On Nomu, Shalfa Facilities Management Co. was the best performer, with its share price rising by 14.03 percent to reach SR95.90. 

Sure Global Tech Co. and Mohammed Hasan AlNaqool Sons Co. also delivered strong performances. Sure Global Tech Co. saw its share price rise by 13.24 percent, reaching SR83.80, while Mohammed Hasan AlNaqool Sons Co. recorded a 12.20 percent increase, standing at SR43.70.

Osool and Bakheet Investment Co. also fared well with 9.81, and Banan Real Estate Co. increased 7.73 percent.

Alqemam for Computer Systems Co. shed the most in Nomu, with its share price dropping by 12 percent to reach SR88. 

Natural Gas Distribution Co. experienced a 5.87 percent decline in share prices, closing at SR54.50, while Horizon Educational Co. dropped 5.66 percent to settle at SR75.

Raoom Trading Co. and Lana Medical Co. were also among the top decliners, with Raoom Trading Co. falling 5.26 and Lana Medical Co. declining 4.89 percent.


Pakistan Stock Exchange may gain at least 27% by end of 2025 — Bloomberg

Updated 18 November 2024
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Pakistan Stock Exchange may gain at least 27% by end of 2025 — Bloomberg

  • Benchmark KSE-100 Index forecast to increase to 127,000 points by Dec. 2025, a 34% rise, from 94,704 points it closed on Friday
  • Key index advanced as much as 0.6% on Monday, taking gains to more than 50% this year, the second best performer globally

ISLAMABAD: Pakistan’s stocks are expected to advance by more than a quarter by the end of next year as the nation’s economy shows improvement under a loan program with the International Monetary Fund and the currency stabilizes, Bloomberg reported on Monday, quoting two brokerage houses. 

The benchmark KSE-100 Index is forecast to increase to 127,000 points by December 2025, or a 34% rise, from the 94,704 points it closed last Friday, according to Topline Securities Ltd. in a report announced on Nov. 16. Arif Habib Ltd. targets the index to reach 120,000 points, a gain of 27%.

“The stage is set for a potential market re-rating with declining interest rates, a stable rupee, and improving macroeconomic indicators,” Karachi-based brokerage Arif Habib commented in a report.

Pakistan’s economy has stabilized with inflation easing from record levels that has allowed the central bank to cut the interest rate for four straight meetings to 15 percent, the lowest in two years. 

The key index advanced as much as 0.6% on Monday, taking its gains to more than 50% this year, the second best performer globally, according to data compiled by Bloomberg.

The equity market will be offering a 37% return including 10% dividend yield by the end of 2025 because of economic stability and falling bond yields, Karachi-based Topline said in a separate report.

Pakistan is also increasingly attracting the attention of foreign investors, particularly in its debt and equity markets, said Arif Habib.


Saudi commercial records surge 68% in 20 months

Updated 18 November 2024
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Saudi commercial records surge 68% in 20 months

RIYADH: Saudi Arabia has seen a remarkable 68 percent growth in commercial records over the 20 months since the implementation of its New Companies Law, according to a recent government report.

The law, which took effect on Jan. 19, 2023, introduced significant reforms aimed at simplifying business processes and fostering a more dynamic corporate environment. By the end of the third quarter of 2024, the number of commercial records had risen to 389,413, up from 230,762 before the law’s introduction, the Ministry of Commerce reported.

Among the law’s key innovations are streamlined processes for setting up joint-stock companies, the ability for shareholders to participate remotely, and improved financing options, including allowing limited liability companies to issue debt instruments. These changes have reshaped the corporate landscape by simplifying company formation and offering flexible financing avenues.

The law also encourages broader ownership by easing the purchase of shares and equity stakes. Notably, it introduces a simplified joint-stock company model and includes provisions for non-profit organizations. Other reforms include allowing sole proprietorships to transition into any company type, modernizing rules for corporate mergers and transformations, and permitting company splits.

Small and micro enterprises are exempt from the requirement of an external auditor, reducing their compliance burdens. Additionally, the law enhances digital services, enabling remote shareholder meetings and decision-making, and removes restrictions across all stages of company formation, operation, and exit.

The reforms also introduce a family charter to govern family-owned businesses and simplify the process for foreign companies to operate in the Kingdom, creating a more flexible and investor-friendly environment.

In its September report, the International Monetary Fund praised the reforms for improving access to financing, reducing fees, and strengthening governance, which has helped attract record levels of foreign investment. The IMF also noted that the reforms have contributed to the growth of non-oil sectors and increased employment.

The IMF further highlighted that the rise in non-oil revenues underscores the effectiveness of these reforms, which have also led to better compliance and alignment of customs procedures with international best practices.

In addition, in September, Saudi Arabia approved new laws related to commercial registration and trade names, further streamlining business operations and improving the overall business environment.

These changes were approved at a Cabinet session in Riyadh on Sept. 17, chaired by Crown Prince Mohammed bin Salman.