COP28

COP28 was the second consecutive climate summit held in the MENA, and in the shadow of COP27, largely remembered for its failures, the summit, held in the UAE, had a lot to prove. 

Indeed, while the summit, hosted by a nation ranking among the world’s largest oil producers, witnessed many controversies and contentious debates, it ultimately resulted in the UAE Consensus, an agreement that many said signalled the “beginning of the end” of the fossil fuel era. It was the first time a COP agreement had contained language on fossil fuels. 

With the dust settled on the Dubai summit and as the world gears up for COP29, ESG Mena looks back at what was achieved, how the landscape is evolving, and what’s ahead.

Putting the building blocks in place

At the end of last year, over 85,000 attendees descended on Dubai in the biggest COP ever. Hosting more than 150 heads of state, the summit saw a number of firsts alongside the UAE Consensus. 

This included the first-ever Health Day and Food, Agriculture and Water Day, the first-ever goal set for renewables and energy efficiency, the unveiling of the COP Presidencies’ Troika, and the operationalisation of the Loss and Damages Fund.

However, the Dubai climate summit also hosted a record number of fossil fuel and meat and dairy lobbyists, and with accusations that the UAE planned to use COP to strike oil deals (claims which were denied by COP28 President HE Dr. Sultan Al Jaber), resurfaced remarks about phase-out science and an uphill battle towards the final agreement, the summit was far from plain sailing. Yet, for some, it was an improvement on the summits that came before.

“This was the biggest and most inclusive COP ever to happen in the entire history of the COP,” said Dr Habiba Al Mar’ashi, President of Arabia CSR Network and Co-Founder and Chairperson of Emirates Environmental Group (EEG), adding: “The outcomes were better than those of previous COPs.”

Commenting on some of the outcomes, Dr. Al Mar’ashi spotlighted the Loss and Damage Fund, which she called a “historic agreement,” while noting that the method of releasing and distributing this fund still needs to be agreed upon.

“The fund should ideally reach the intended targets, be corruption-free and be used in actual loss and damage situations,” added Dr Al Mar’ashi. 

That said, while progress was made at COP, according to experts, the fund isn’t expected to deliver money to recipients until 2025, at the earliest, and currently stands at around just $650 million. 

In the broader climate financing context, the gap keeps growing, including in the MENA, a region among the lowest recipients of climate finance. 

“It is already well known that if we are to keep to the Paris agreement of maintaining temperatures below 1.5 degrees, then more finances need to be dedicated to what is currently promised,” said Dr Al Mar’ashi. 

“Thus, the least the entities that gathered at COP can do is reach the goals set at COP, finance the projects, innovate, and transform infrastructure to be climate resilient, adaptable, and sustainable in the long term.” 

Finance central to transformation 

Indeed, at COP, one of the notable regional financial commitments was the UAE Banks Federation’s (UBF) pledge to mobilise AED 1 trillion in sustainable finance by 2030. 

With the aim of driving forward the 2050 net zero mission, the commitment from the UBF signified collective action from the UAE banking sector. 

Among the banks participating in the pledge was Mashreq Bank, which committed to facilitating AED 110 Billion ($30 Billion) in sustainable finance by 2030. 

“When we talk about finance, any ambition, without key enablers in place, will never be achieved; it will remain a dream,” said Mashreq’s Head of ESG and Corporate Strategy, Faisal Mohammed AlShimmari.

“Government alone cannot be responsible [for delivering] the sustainable development goals… It’s our responsibility; it’s on everyone in the community, including the private sector and primarily financial institutions.”

Yet, globally, while banks pour billions into fossil fuel expansion and industrial agriculture, there’s a big green financing gap.

Aimed at addressing the shortfall in adaptation and resilience finance, the United Nations Office for Disaster Risk Reduction (UNDRR), Standard Chartered, and KPMG recently published a guide to help develop financial products and mobilise private capital while issuing a call for further collaboration and dialogue. 

AlShimmari echoed this call and emphasised the importance of understanding and navigating risk. 

“Energy transition projects are challenging projects that require huge finance. At the same time, their ROI is a very long period of time,” said AlShimmari.

AlShimmari added that financing a project, strategic initiative or facilitating finance requires an “open dialogue” with counterparties to understand their strategic objectives and the roadmap to prioritise funding such initiatives, without shouldering “too much risk” alone.

Turning pledges into action

Despite the many pledges and promises made, the curtain has long since closed on COP28, and real change requires action. In the years ahead, there’s much work to be done. 

“The next step is the actual implementation of all the projects and proposals put forth in the COP,” said Dr. Al Mar’ashi.

“It is one thing to just discuss and plan all the proposals and agreements, yet it would be catastrophic if all the promises made by all the countries, their heads, and the industries are unable to implement the same within the stated time frame.”

Indeed, one of the biggest outcomes of COP was the fossil fuel pledge; however, as Oil Change International highlighted last week, the G7 countries are “falling far short” of what’s needed to phase out fossil fuels.

Further, back in November last year, a report found that governments are, in fact, doubling down on fossil fuels, with plans to produce around 110 per cent more fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C. 

This fossil fuel expansion was recently defended by Azerbaijan’s president in a speech at the Petersberg Climate Dialogue in Berlin last month, who called fossil fuels a “gift” from god. Azerbaijan is the host of the next climate summit, COP29.

As the world grapples with these divergent opinions and approaches, last month, the International Energy Agency (IEA) released an energy transition tracker resource seeking to measure progress towards the energy commitments made at COP28. But, as was highlighted at the recently concluded World Energy Congress, the transition is happening at widely varying speeds. 

On driving progress forward, Alex Malouf, a sustainability expert based in Saudi Arabia, echoed Dr Al Mar’ashi’s call for action: “While much was discussed and agreed upon at COP28, the question is always, ‘What is next?’ We all have a role to play in reducing carbon emissions, and I’d like to see governments introduce policies that encourage or promote ideas such as energy efficiency.”

Indeed, energy efficiency is considered a cornerstone of the energy transition, dubbed the “first fuel,” and at COP, countries agreed to double energy efficiency by 2030. 

Regionally, we are seeing different policies emerge that are targeted at this. However, according to the World Energy Council’s recent report, which collected responses from 1,800 energy leaders across more than 100 countries, uncertainty has increased regarding the policy environments necessary to transform energy demand across sectors, including energy efficiency. This, it said, requires a revaluation of policies and stakeholder collaboration.

Meanwhile, with the goal to triple renewable energy capacity by 2030 quickly approaching, the pressure is now on to ramp things up. 

Indeed, while 2023 saw renewables grow at a record pace, according to the IEA, it was still far off the rate required. 

Regionally, in the Middle East, capacity has doubled over the last ten years, and in 2023, it increased by 16.6 per cent to reach 35.5 gigawatts (GW). However, within the global context, the region still has the lowest share of clean power.  

“The move to renewables needs to happen more quickly,” said Malouf, who projected that green hydrogen will play an increasingly important role in decarbonising heavy industries and transportation. 

“The Middle East will be central to this energy transition, so expect more capacity being announced as well as rapid progress in completing projects that are currently in the works.”

Malouf also highlighted the progress towards green mobility in the region. “There’s going to be a growing shift to electric vehicles in the region, and I’m happy to see investments being made in areas such as charging infrastructure.” 

However, while the MENA EV market is set to be worth $7.65 billion by 2028, adoption is still low, and when it comes to charging infrastructure, deployment varies widely from country to country. 

Cost is also, of course, a big factor in adoption. “What we also need are buyer-side incentives that will lower the cost of purchasing EVs for first-time buyers.”

And while transport emissions account for one quarter of global CO₂ emissions, food systems are responsible for a third and in desperate need of decarbonisation in a just and equitable manner. 

Indeed, a recent report from Harvard’s animal law and policy program highlighted that globally, greenhouse gas emissions from livestock farming must peak by next year and be cut in half by 2030 if we are to meet climate goals. 

At COP, food systems transformation was spotlighted for the first time, but the final outcome lacked the ambition many hoped to see. Meanwhile, away from the official talks, the FAO’s food systems roadmap omitted reducing meat intake as a policy intervention – to the dismay of many experts. 

Yet, food and water sustainability and security are crucial challenges, especially regionally, and alongside contributing significantly to climate change, food systems are increasingly precarious amid its intensifying impacts. This means action in this space needs to accelerate and scale significantly. 

Collaboration on the road to COP29

One point that has been stressed time and again in recent years is that international collaboration is the lynchpin for achieving net zero, and COP28, despite its shortcomings, provided a key platform to facilitate this. 

Indeed, at the close of the summit, UN Secretary-General Antonio Guterres noted: “In our fractured and divided world, COP28 can show that multilateralism remains our best hope to tackle global challenges.”

However, across the region, the message conveyed is that we can not afford for this to be a “one-off.”

“What we achieved in international collaboration in COP28 should become a model for our day-to-day engagement. It shouldn’t be a once in a lifetime opportunity. We shouldn’t wait until COP29 or 30, to address certain priorities, the integration between SDGs and ESG, and the alignment, is critical,” said AlShimmari.

That being said, the next two climate summits are also crucial, and emphasising the importance of action between now and 2026, UN climate chief Simon Stiell recently warned that there are “two years to save the world,” calling on governments, development banks and business leaders to step up. 

From the climate summit perspective, the COP Presidencies Troika was launched, aimed at enhancing continuity between climate summits, driving the implementation of the UAE Consensus, and raising ambition in the next round of NDCs. However, against a backdrop of increasing geopolitical tension, maintaining the level of international collaboration required to combat climate change won’t be easy.

On a national level, AlShimmari emphasised the importance of uniting the government and private sectors. 

“We [believe in] looking at the climate and social challenges around the SDGs as an opportunity for us to collaborate together in a roundtable with the government sectors in redefining public-private partnerships, and this is the way forward for us.”

Meanwhile, speaking about what needs to happen on the road ahead, Dr Al Mar’ashi said: “The climate challenges in this region must be evaluated and discussed more, with critical steps taken and executed, and that has to start now if not already underway. 

“The initial implementation of these climate-positive projects is what is to happen this year, as the window for change is narrowing evermore.” 

By Madaline Dunn, Lead Journalist, ESG Mena