The Climate Summit COP 28 promises to be transformational: Expect big actions and investments as the global climate cost skyrockets

Before I left the World Bank in 2015, the Washington based organization organized an event called “Should the World Bank President be a Private Sector CEO?” While this panel generated a lot of animosity and anger, in May 2023, the World Bank chose a Wall Street CEO, Mr. Banga as the new President. It is becoming clearer that poverty reduction, and sustainable development need more private sector and capital markets expertise and tools. And the market is adjusting to this new reality.  Similarly, global decarbonization and climate change adaptation, needs to be tackled from the source up with greater private sector leadership. The great work that International Financial Institutions have done together with civil society groups, needs support from oil and gas producers as they have the financial resources and now the market incentives to become part of the solution.

The UAE and its Confidence Game:

The UAE, 7th largest oil producer in the world is hosting Cop28 this year. COP 28 President, Sultan Dr. Al-Jaber is one of the most powerful men in the world, being also the CEO of the UAE National Oil Company ADNOC. Dr. Al Jaber wears also other hats, as he is the UAE's minister of industry and advanced technology, as well the chairman of Masdar, a renewable energy firm now active in over 40 countries. Masdar, was launched in 2006 and has invested in mainly solar and wind power projects with a total capacity of 15 gigawatts, capable of displacing more than 19 million ton of carbon dioxide emissions annually. As he addressed the Abu Dhabi International Petroleum Exhibition and Conference at the end of 2022, Dr. Jaber made it clear that "The world needs maximum energy… and minimum carbon emissions," he also stated that "the world needs all the solutions it can get. It is oil and gas and solar, and wind and nuclear, and hydrogen plus the clean energies yet to be discovered, commercialized and deployed." As he tours the world consulting with government, global foundations and civil society groups, Dr. Sultan Al-Jaber, has repeatedly asked to be given a chance to lead the energy sector in the decarbonization efforts.  He has argued that as it is the fossil fuel industry that must change most to stave off the climate crisis, an oil industry insider was best placed to make that change.

The global tour and consultations to prepare for the COP28 in November “have been encouraging” he said. He further explained, “While I appreciate all the feedback, I got from everybody, representing all sectors and all industries, I promise you, the best feedback I got and the best advice I got was the uncensored feedback, guidance and advice that I received from NGOs and civil society”.

There is pressure on the UAE and Dr Sultan Al Jaber to demonstrate to the world that their management of the COP presidency is for the planet and not for the hydro-carbon sector status quo. The UAE has an opportunity to show oil sector leadership and accelerate the transition to a lower carbon economy. The UAE leadership needs quickly to show where its ambition lies in ending the fossil fuel era and ramping up the era of renewables and green growth. They are uniquely placed to do so, but the world needs to understand the plan.

What will COP28 focus on?

COP28 will hold the first formal assessment of progress on cutting carbon since the Paris agreement was signed in 2015.  The "global stocktake" as it is called will be a key COP28 output which should clarify how much further countries will need to go in reducing their emissions.  High in the COP28 agenda is to ensure that the world triples renewable capacity to 11,000 GW globally, and double hydrogen production to 180m tons a year by 2030. Doubling energy efficiency investment will also be a high priority of this year's climate summit.

What is the climate mitigation and adaptation price tag?

The International Energy Agency estimates that reaching the goal of “net zero” will cost $4 trillion a year over the next 30 years. That’s on the order of $100 trillion to $120 trillion. Other sources such as McKinsey, estimates that to reach Net Zero by 2050 the world would need to invest $9.2 trillion per year.  While the decarbonization price tag is high, the cost of unabated climate induced disasters could be much higher and range between 13-17 % of GDP by 2030 according to Swiss-Re.