While there was much ridicule in OECD member countries and among the NGO community about holding COP28 in the UAE due to its status as a major oil producer.
Inclusivity of COP28
COP28 is unique in its inclusivity as it is the first time that everyone is involved. Climate change is a global problem that requires global solutions from all sectors. From this perspective, it is important to have the oil and gas industry present, as it is an integral part of the solution to the climate crisis. Let’s not forget that by 2050, developing countries that will grow by 2 billion people will need to lift hundreds of millions of people from poverty to the middle class. Achieving this goal requires the use of all energy sources. We need a just energy transition, which may look different in Uganda than in the UK. If we want to solve a global problem, we must bring everyone to the table, in terms of countries and industries.
The Role of the Oil and Gas Sector
The oil and gas sector plays a vital role in providing energy. The industry is also working to reduce carbon emissions. Saudi Arabia and the UAE produce oil barrels with the lowest carbon intensity in the world. They are also at the forefront of research, development, and implementing decarbonization technologies like CCUS. The enemy here is carbon dioxide, not oil and gas per se. Net zero does not necessarily mean zero carbon.
COP28 Commitments
The United States and the European Union have committed to reducing greenhouse gas emissions by $5.5 billion, which brings us back to renewable energy, decarbonization technologies, and reducing methane emissions. Major oil companies like Exxon and Saudi Aramco have joined the initiative.
COP28 Achievements
COP28 has made more progress for the Global South in the first few days compared to most previous COP conferences. In 2009, the parties in Copenhagen agreed that developed countries would contribute $100 billion annually for climate action in developing countries by 2020. The timeline has been extended to 2025. However, 2023 is the first year that developed countries have actually fulfilled their commitments.
On the first day, COP28 announced a fund aimed at compensating the most vulnerable countries for losses and damages caused by climate-related natural disasters. Nearly 200 countries at COP27 agreed on the general terms for the fund. It now exists and will be managed by the World Bank. So far, $400 million has been pledged by the UAE, the US, the UK, Germany, Japan, and others.
On November 10, ahead of COP28, the Arab Coordination Group announced it would allocate $50 billion to help build resilient infrastructure and inclusive communities on the African continent. The Arab Coordination Group consists of the Islamic Development Bank and multilateral and national institutions such as the OPEC Fund for International Development and the Abu Dhabi Development Fund, among others. The Arab Coordination Group will expand financial assistance in accordance with the Paris Climate Agreement to bridge investment gaps, which is vital as the continent has around 700 million people living in energy poverty.
It is impressive that there were outcomes on the first day (and in the case of the Arab Coordination Group, even before COP started). It seems the world has come to understand that we live in one world and that we need to support developing countries, many of which bear the brunt of climate change without contributing much to global carbon emissions. We hope we are now on the way to a just energy transition.
Cornelia Meyer is a macroeconomic expert and energy specialist, and the CEO of Meyer Resources, a business consulting firm. Disclaimer: The opinions of the authors in this section are their own and do not necessarily reflect the views of Arab News.
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