June 19 (UPI) -- The economy of Jordan could grow on the back of green initiatives, but progress may be impeded by geopolitical shocks, a World Bank report found.
An annual report on the Jordanian economy from the World Bank found shocks from crises in Syria and Iraq have stifled trade lines and pushed expansion to around 2 percent, compared with the World Bank's estimate for the Middle East and North Africa of around 3.2 percent.
Kanthan Shankar, the acting regional director at the bank, said climate and energy reforms envisioned by the Jordanian government could help offset some of the regional economic strains.
"Such actions would spur job creation, reduce dependence on commodity imports, attract foreign direct investment and leverage international climate finance," he said in a statement.
Jordan is aligned with most international climate accords and was one of the first developing countries to sign on to the Kyoto protocol in 2003. The transportation sector accounts for the largest share of emissions in the country, though climate threats also extend across most water sectors in the country.
The World Bank estimates it would cost Jordan about $5.7 billion to achieve its goal of cutting emissions by 14 percent from a baseline scenario by 2030. The report found Jordan has secured financing of only $542 million to meet its target.
Lea Hakim, one of the report's authors, said external factors were presenting obstacles to many of Jordan's objectives.
"Short of a positive shock such as the reopening of trade routes with Iraq or a peaceful conclusion to the Syrian conflict, and given fiscal and monetary policy tightening, it is difficult to foresee an impactful jumpstart to growth unless strategic structural reforms are implemented at a quicker pace," she said.
Outside of renewables, the government aims to use natural gas to offset coal-fired power in the country. In the past, Jordan has struggled to find a reliable source of natural gas in part because of downstream problems in Egypt.
Israeli companies drawing gas from the Tamar field in the Mediterranean Sea signed agreements this year with Jordanian companies Arab Potash and Jordan Bromine to help push the economy away from coal.