Financing Afforestation in the Organization of Islamic Cooperation Countries: What Role for Islamic Economics and Finance?

Abstract

This paper looks at environmental conservation within the growing understanding of the urgent need to confront the two menaces of desertification and deforestation through afforestation schemes in the Organization of Islamic Cooperation (OIC) member countries. Deforestation is one of the main contributors to global greenhouse gas emissions, ecosystem degradation, and from there the rising cases of poverty in the developing world. Their impacts on the economy and environment of OIC member countries has been devastating. Desertification and deforestation are caused by human activities like logging, harmful farming practices, as well as haphazard cutting of trees in order to make way for city buildings and farms. The paper shows that poor handling of past responses to desertification problems can be solved with the right approaches. It first looks at existing approaches to the problem and causes of their failure. Then, it proposes an alternative model based on fiqh teachings and recent developments in Islamic economics and finance. The paper syntheses conventional and Islamic approaches towards solving the problems of desertification, deforestation, and rising temperatures in the OIC countries. It delineates specific functions and contributions of each one of (a) the Islamic state, (b) the institution of waqf, (c) Islamic finance, and (d) the Islamic firm.

The impact of Islamic financial development on renewable energy production in Islamic countries

“…The results show that Islamic financing has an important role in reducing pollution in Malaysia through green financing schemes for industry, even though industrial employment is increasing. In another study, Abdullahi (2019) found that properly implementing Islamic finance and economics can minimize environmental damage in various countries. In Bangladesh, Islamic banking has played an important role by providing beneficial financial services to support environmental improvement (T. Khan & Mohomed, 2017).…”

“…In addition, previous research that directly examined the effect of Islamic finance developments on renewable energy was still limited. Most of the previous research only linked the development of Islamic finance to environmental issues (Aassouli et al, 2018;Abdullahi, 2019;Campisi et al, 2018;Kassim & Abdullah, 2017;T. Khan & Mohomed, 2017;Moghul et al, 2015;Solarin, 2019).…”

Green Economy and Some Relevancies from Islamic Finance Perspective

“…Aassouli et al (2018) provided the roadmap for Sub-Saharan Africa (SSA) to mitigate climate change and achieve SDGs by using green sukuk as the tool to fill the financing gap for green projects. Lastly, Abdullahi (2020) recommended some Islamic finance products to be considered for policymakers in OIC countries to solve deforestation issues. The result argued that green sukuk and cash waqf could be helpful to finance the afforestation program.…”

The Nexus Between a Green Economy and Islamic Finance: Insights from a Bibliometric Analysis

“…Aassouli et al 31 provided the roadmap for Sub-Saharan Africa to mitigate climate change and achieve SDGs by using green sukuk as a tool for fill financing gaps for green projects. Lastly, Abdullahi 32 recommended Islamic finance products be considered by policymakers in OIC countries as solutions to deforestation issues. The result was a suggestion that green sukuk and cash waqf be used to finance afforestation programmes.…”