Today's Edition
Jessi Amason (DUBAI)
“The Future of Climate Finance” was illuminated during a seminar held under the same title at the COP28 on Monday, organised by TRENDS Research and Advisory in collaboration with Aletihad News Centre.
Speakers included Dr. Nawal Al Hosani, the UAE’s Permanent Representative to the International Renewable Energy Agency (IRENA); Dr. Ridan Abdulaziz Al Saqaf, the UN Resident Economist in the UAE and the Technical Coordinator for COP28 at the UN Office in the UAE; and Dr. Bilal Al Shaqaren, Director of Climate Change at the Jordanian Ministry of Environment.
The speakers delved into strategies for promoting renewable energy globally, especially in developing countries, and ensuring the fulfilment of financial commitments made at COP28.
Mechanisms for enhancing investment and creating an environment conducive to sustainable energy solutions were also a focal point of the session, which was moderated by TRENDS researcher Reem Al Kindi.
COP28 Successes, Financing Challenges
Director of Aletihad News Center, Dr. Hamad Al Kaabi, affirmed that financing is a key pillar of propelling climate action and transforming words and pledges into action. Al Kaabi highlighted the activation of the Loss and Damage Fund on the first day of COP28 as a seminal achievement of the conference, and one that was accomplished through intensive diplomatic efforts on the part of the COP28 Presidency.
Al Kaabi noted the UAE’s efforts to assist developing countries by transferring clean energy technology and affirmed that the UAE’s energy transition process began nearly 20 years ago, culminating in the Masdar renewable energy company, which he deemed a success story in renewable energy, not only in the region, but the world.
TRENDS CEO Dr. Mohammed Abdullah Al Ali also noted financing’s importance in the broader story of climate action, especially pertaining to the ramifications of climate change suffered by small and developing countries. Al Ali referenced studies which indicate that climate change will inflict over half a trillion dollars of damage to these countries by 2030, even though these countries bear minimal responsibility for the climate challenge.
“Therefore, it has become imperative for advanced countries, which are ‘responsible for most global emissions’ - as stated in the Paris Agreement - to support the less responsible countries, which are more affected by its impacts,” Al Ali said.
Al Ali also highlighted the importance of the activation of the Loss and Damage Fund, outlining the fund’s history, from its establishment during COP27 in Sharm El Sheikh to the complications that arose from questions over the fund’s logistics, to its successful activation on the first day of COP28, which he characterised as a historic step and an unprecedented achievement.
The fund successfully acquired over $700 million so far. Al Ali also commended the UAE’s establishment of the $30 billion fund to bridge the climate gap, which also aims to collect $250 billion in investments by 2030. With climate pledges totalling over $85 billion, challenges still remain.
Reports indicate the African continent, which is responsible for 3.8% of emissions, needs around $2.8 trillion in climate financing by 2030. According to the African Development Bank, the continent has only received 3% of this requirement. “Despite this, we are hopeful that COP28, which achieved a significant milestone in this regard, has laid a solid foundation for future efforts to reach radical solutions to the climate financing issue,” Al Ali said.
Facilitating Climate Financing
Bilal Al Shaqareen kicked off the discussion by commending the activation of the Loss and Damage Fund, achieved on the first day of the conference, as well as the UAE’s launch of a $30 billion climate financing fund, also announced at the beginning of COP28.
Al Shaqareen explained that developing countries require such financing, which will allow them to enhance their technological capabilities, especially when it comes to facing climate change. He also detailed previous climate financing commitments to development countries that never materialised, citing a $100 billion pledge made by developed countries in 2009, that was never received by the intended beneficiaries.
Al Shaqareen also explored the issue of loans and debt, a challenge which afflicts most developing countries, he said. Due to the nature of the issue, Al Shaqareen said that developing countries currently need climate financing in the form of grants.
Taking his country, Jordan, as an example, Al Shaqareen detailed the launch of green bonds at the beginning of this year, as well as the establishment of financial risk assessment systems for the banking and financial sectors that are specifically attuned to climate risks, deemed the Climate Risk Financial Analysis.
The Jordanian government has also implemented green financing initiatives, including the development of a regulatory framework for promoting green investments that is implemented within the Central Bank of Jordan’s Green Financing Strategy, which provides both loans and grants to green projects, as well as technical support. The strategy also supports climate financing research and development, and contains agreements with international financial institutions like the World Bank, the Green Climate Fund, and the Adaptation Fund.
Energy Transition
Commenting on the successes of COP28 and the issue of climate financing, Dr. Nawal Al Hosani first affirmed the important role that the media has played in the success of the conference. She noted that the UAE has focused on renewable energy for 20 years, highlighting the country’s great potential in solar energy.
The UAE is the only OPEC country that exports both traditional energy and renewable energy, Dr. Hosani commented, adding that the UAE’s talented energy and renewable energy personnel can be found all around the world. ‘We now have three of the largest solar power stations in the world, and during COP28, His Highness Sheikh Mohammed bin Rashid Al Maktoum launched the world’s largest solar power station in a single location. We also have a solar power station in Al Dhafra, with a capacity of 2 gigawatts. These significant achievements will play a role in accelerating the adoption of advanced solutions in clean energy,” she said.
“At COP28, the UAE, in cooperation with IRENA, has pledged to triple renewable energy by 2030 and we have doubled energy efficiency during the same period, from 2% to 4%,” Dr. Hosani added. To reach the goal of maintaining 1.5 degrees Celsius without renewable energy is impossible, she added, calling for the world to achieve a fair energy transition.
Dr. Hosani also commended the adoption of the Loss and Damages Fund on the first day of COP28, praising COP28 President Dr. Sultan Al Jaber’s determination to build solutions based on consensus and tangible results. “Dr. Sultan Al Jaber gathered all parties participating in COP28 in a Majlis that mirrors those of the Emirati culture, a Majlis without pre-prepared papers or mere words, which prompted a renewed consensus in the negotiation process, especially in light of the ‘tug of war’ between industrial and developing countries,” she said.
The UAE has achieved significant breakthroughs during COP28 that have not been achieved in any of the previous climate conferences, and has successfully activated a new culture of dialogue to find solutions for remaining issues, including climate financing, she said.
Justice in Climate Financing
Beginning his address, Dr. Ridan Abdul Aziz Al Saqaf identified justice as a central issue in climate finance, with the key challenge being facilitating access to finance for developing countries most vulnerable to climate change.
“The Paris Agreement in its initial estimations at the time estimated that $600 billion would be needed to implement commitments and limit the temperature increase to 1.5 degrees,” Al Saqaf began, adding that in the past iterations of the climate conference, developing countries would “leave with their hands empty”.
COP28 changed the situation, he said. “COP28 forced this issue on the very first day,” Al Saqaf added. “On the first day, Emirati diplomacy ensured that a significant amount of financing would be allocated and designated for developing countries…This issue has been on the table for 30 years,” he said.
Al Saqaf also stressed the need to reform financial instruments related to climate financing, highlighting the UN’s efforts to enhance access to financing at the country level. He identified three key financing areas as emissions reductions, adaptation, and compensation for climate damages. He called for all to cooperate in the creation of new financing mechanisms, especially as the costs of addressing climate change are only rising.
