80 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 42 | 2024 announced they will adopt CBAM policies of their own, which will affect Morocco’s commerce as well (Carbon Market Institute, 2024). To protect its exporters from future CBAM-mandated costs, Morocco needs to take measures to reduce or offset the emissions created by domestic production. There is an additional practical reason for Morocco to decarbonize: energy security. Morocco notably lacks substantial domestic fossil fuel reserves, which has historically led it to be very dependent on imports to meet its energy needs (Ainou et al., 2023). This is an economic liability, as it creates a risk of inflation following oil price hikes (Shehabi, 2024). Accelerating the shift from away from imported fossil fuels to electricity produced from renewable energy sources, of which Morocco possesses an abundance, is a matter of not only environmental sustainability but also economic stability. Morocco’s progress toward decarbonization Morocco’s pursuit of decarbonization efforts dates to at least 2009, when a new National Energy Strategy established an initial target of reaching 42% installed renewable electrical capacity by 2020 (Ainou et al., 2023). The next year, Morocco’s Parliament passed Law 57-09 to create the Moroccan Agency for Sustainable Energy (MASEN), a state-owned private company charged with developing an integrated national network of renewable energy projects totaling 6000 MW of generation capacity by 2030. Around the same time, Law 13-09 on renewable energy established a framework for private investment in renewables projects. The law granted independent power producers (IPPs) the right to implement renewables projects for self-generation purposes, also creating a separate free market for the sale and purchase of renewable power. In 2016, it was updated by the passage of Law 58-15 to allow the sale of surplus power from private renewables projects to the Moroccan state electric utility, ONE. To encourage foreign investment in larger-scale projects, ONE and MASEN also launched the first international tenders for the financing and development of domestic renewables installations by IPPs under a power purchasing agreement (PPA) system that grants project developers access to MASEN-owned land and guarantees 20- to 30-year electricity purchases by ONE (Choukri et al., 2017). Under this regulatory framework, Morocco made substantial progress in executing its renewable energy development goals during the 2010s. A notable early success was the 300-MW Tarfaya wind farm, commissioned in 2015 and financed through a PPA according to MASEN’s project development model. Another milestone was the 2016 commission of the first component of the Noor solar plant near Ouarzazate, which became the largest concentrated solar power project in the world at 510 MW of total installed capacity when completed, enough to power the city of Marrakech twice over. It is now one of the Moroccan renewables industry’s proudest and most well-known assets (Noor Ouarzazate Solar Complex, 2020). While developing its domestic renewable power generation capacity, Morocco formalized its commitment to decarbonization on the international stage by ratifying the Paris Climate Accords during the COP21 in 2015. The following year, Morocco hosted the COP22 in Marrakech and submitted its first Nationally Determined Contribution (NDC), laying out specific climate action commitments. In the NDC, Morocco committed to a 42% reduction in emissions compared to business as usual by 2030––17% unconditional and 25% conditional on foreign aid (Berahab et al., 2021a). These targets were updated in 2021 with the submission of a new NDC with more aggressive decarbonization goals that committed the country to a 45.5% reduction in emissions by 2030 (18.3% unconditional and 27.2% conditional on international aid) and a 77% reduction in emissions by 2050 (El Hafdaoui et al., 2024). The nonprofit group Climate Action Tracker (2024) rated these targets as “Almost Sufficient” for meeting the Paris agreement’s goal of limiting global temperature rises to an average of 1.5°C. As of 2022, renewable power sources, including wind, solar, and hydropower, made up 38% of total installed electric capacity in Morocco. The remainder of the kingdom’s generation capacity comes from nonrenewable sources, such as coal, fuel oil, and natural gas. The most significant of these fuels is coal, which powers more than 37% of the country’s generation capacity (International Trade Administration, 2024). Potential barriers to effective decarbonization Despite its notable progress in renewables development, Morocco’s decarbonization ambitions have been somewhat frustrated by a booming economy that has led to increased emissions. During the period 2010–2020, the Moroccan economy showed a strong annual growth rate, averaging nearly 4%, accompanied by a corresponding 4% annual increase in greenhouse gas emissions (El Hafdaoui et al.,
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