Sustainability of the Energy Sector in Jordan: Challenges and Opportunities

Abstract

The acceleration of economic development and rising standards of living have made energy security a top priority for policy makers worldwide. The issue of securing energy is particularly challenging for Jordan, which suffers from scarcity of natural resources, combined with the regional instability and conflicts. Based on desk research and on experts’ interviews, this study discusses the status quo of the energy sector in Jordan, its main challenges, and future aspirations. It thus contributes to the debate on how Jordan can ensure environmental, economic, social, and political sustainability of its energy sector. Jordan’s energy security has been historically linked to its relations with the neighboring countries and thus vulnerable to external shocks and outside political events. Notwithstanding reform efforts to reduce dependency from imports and some progress in diversifying the energy mix, energy security remains critical: the country imports around 94% of its energy, which represents approximately 10% of GDP. The growing domestic demand, which increases at a yearly rate of 3%, further adds to the pressure to envision strategies towards a more sustainable energy sector. These strategies will need to include investment in renewable energy, the reduction of energy consumption via increasing energy efficiency, and also synergic agreements with other countries. The interviewed experts highlighted the importance of governance for the successful implementation of these strategies. The creation of an enabling environment should go hand in hand with the involvement of all key stakeholders from energy and related sectors, into the development of a future vision of a sustainable energy sector.