An Experimental State
The first was COP18 in Qatar in 2012, when the conversation was quite different. Today, the 2015 Paris Agreement goals—to keep global warming under 2 degrees Celsius while pursuing efforts to stay within 1.5 degrees—have been widely enshrined into law in the world’s largest economies, placing pressure on the oil and gas sector to play its part.
There is still much work to do. Expectations for the United Arab Emirates (UAE), as the host country, to deliver a mitigation outcome that drives significant reductions in greenhouse gas emissions are high, especially after COP27 failed to make progress. In addition, with this year’s climate talks concluding the first-ever Global Stocktake—an inventory that shows the global community is far off track from meeting the Paris goals—anything short of a strong response will be considered a failure.
The transition from fossil fuels to renewable energy will be the defining topic at the climate talks.
The science is clear. To keep the 1.5-degree-Celsius goal within reach, emissions reductions of 43% (compared to 2019 levels) are needed this decade. The UAE’s COP28 presidency, building on the priorities outlined in the recent US-China statement on enhancing climate cooperation, is expected to double down on that effort by pushing for a pledge to triple renewable energy capacity and double the rate of energy efficiency improvements by 2030.
But will the UAE also push for a global goal to phase out fossil fuels? And, if so, can it secure the cooperation of other top oil producers, such as Saudia Arabia? Riyadh, a close ally of the UAE and the world’s second largest oil producer after the US, has blocked other similar efforts, most recently in September at the G20 summit in India.
The transition from fossil fuels to renewable energy will be the defining topic at the climate talks. Many have argued that acting COP President Sultan al-Jaber is the wrong man to lead this conversation. He is, after all, the UAE’s minister for industry and advanced technology, and chief executive of the Abu Dhabi National Oil Company (Adnoc) and its renewable energy arm, Masdar. Adnoc has announced plans to increase its oil production by 25%, which means al-Jaber appears to be straddling two irreconcilable goals: slowing global warming while expanding hydrocarbon production. Critics fear this will permit interference from oil and gas lobbies and weaker commitments on climate action. New revelations from the BBC that the UAE seeks to use its role as COP28 host to strike oil and gas deals have significantly boosted such concerns.
An oil man at the helm of negotiations, however, may yet be an opportunity to bring to the table an industry that remains minimally engaged with the transition to clean energy. (A recent International Energy Agency report shows that the sector is behind only 1% of global investment in clean energy.) The signs that al-Jaber will do so are mixed. He has repeatedly expressed a desire to make oil and gas executives feel welcome at COP28 but has also warned that “the oil and gas sector needs to up its game, do more and do it faster.”
The appeal comes at the right moment. Oil and gas companies have rebranded themselves as energy companies in recent years, and for many of them renewable energy is the area seeing the fastest growth. But European and US companies are spearheading the shift in focus. The oil and gas industries of the Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—lag far behind.
There is some hope that this may change. The UAE, which accounts for 68% of the Middle East’s installed renewable energy capacity, is the region’s leader in energy innovation, followed by Saudi Arabia (16%) and Kuwait (9%). All are likely to see significant market growth as renewable energy comprises only 7% of the UAE’s current energy mix. It is less than 1% in other GCC countries. That could make Arab petrostates, eager for economic diversification and endowed with an abundance of renewable energy sources, supporters of a COP28 goal to triple renewables capacity.
The UAE also appears to be moving toward getting Saudi cooperation on a pledge to reduce fossil fuel usage. Insiders say that the COP presidency may support compromise phrasing on “an orderly phase-down of unabated fossil fuels”. “Orderly phase-down” and “unabated” cater to opposing countries as code for a more gradual reduction in fossil-fuel usage and for greater emphasis on carbon capture technologies that would allow countries to keep burning oil, gas, and coal if they use technology to "abate" emissions.
Experimentation with carbon capture and storage is on the rise in the Middle East. The technology represents an interesting transformational opportunity for oil and gas giants, especially as much of the needed expertise and equipment is the same as that used for drilling. Still, lingering technological uncertainties make it unlikely to be enough to sway countries such as Saudi Arabia to support reductions in fossil-fuel usage.
It may be easier for the UAE COP Presidency to aim for the decarbonization of oil and gas operations themselves, which, given continuing fossil-fuel production, would make an important contribution to reaching climate goals by the end of this decade. The latter alone account for around 15% of global energy-related emissions, and the Middle East is a logical starting point for reducing that. The region accounts for 46% of global crude oil exports and 30% of global LNG exports, and is the world’s lowest-cost producer of both. But few companies in the region have reasons to pay the premium for cleaner, electrified operations. They deal with little public pressure to report their emissions, low government regulation, and few incentives to experiment with new technologies such as point-source carbon capture. COP28 offers an opportunity to hold these companies accountable for their actions while sharing best decarbonization practices.
US Special Presidential Envoy for Climate John Kerry backed al-Jaber’s appointment and called placing the summit in the UAE “an experiment to have an oil-and-gas-producing entity host COP”. He is correct; the gathering’s outcome is uncertain, especially in light of the BBC’s reporting. But given the need to involve the oil and gas sector to reach climate goals, it may still be worth a try.