Davos 2022: US envoy John Kerry says UAE playing critical role in global climate action


Mustafa Alrawi
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Middle East countries “can play, and some of them are playing, a critical role at this point” in the effort to mitigate global warming and accelerate the path to net-zero carbon emissions, the US envoy for climate change said in Davos.

Countries in the region are engaged in the effort to develop renewable energy capacity around the world, John Kerry, special presidential envoy for climate, said at a press conference on the sidelines of the World Economic Forum annual meeting on Tuesday.

“The UAE, for instance, has a very large solar deployment. They are exploring rapidly green hydrogen … and they are investing in other countries and helping with their transitions,” said Mr Kerry.

India is a prime example where you have a [2030 renewable energy] commitment by Prime Minister [Narendra] Modi, which is 500 gigawatts … which is very significant.”

The Regional Dialogue for Climate Action was also held in Abu Dhabi in April 2021, and was critical for building momentum before Cop26 in Glasgow late last year. Cop27 will be held in Egypt this year and the UAE will host Cop28 in 2023.

“The UAE stepped up and hosted the first-ever Middle East climate conference, which had 11 countries come together, a group of them oil and gas producers. And they all signed on to an extremely forward-leaning communique, which they are now pursuing,” said Mr Kerry.

“So, I think that any oil-producing country that begins to step up and indicate their acceptance of the reality of the need to build up for a transition is a critical message to the rest of the world. And the UAE and other countries in the region have done that, and are doing that,” said Mr Kerry.

  • The third phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. Photo: Masdar
    The third phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. Photo: Masdar
  • Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Ruler of Dubai, inaugurates Dubai Electricity and Water Authority’s Innovation Centre and the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park, the largest single-site solar park in the world. Wam
    Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Ruler of Dubai, inaugurates Dubai Electricity and Water Authority’s Innovation Centre and the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park, the largest single-site solar park in the world. Wam
  • Sheikh Mohammed at the Mohammed bin Rashid Al Maktoum Solar Park. Wam
    Sheikh Mohammed at the Mohammed bin Rashid Al Maktoum Solar Park. Wam
  • Mariam Al Mheiri, Minister for Food Security, speaks at the World Food Programme Stop the Waste campaign at Jumeirah Beach Hotel, Dubai. Leslie Pableo for The National
    Mariam Al Mheiri, Minister for Food Security, speaks at the World Food Programme Stop the Waste campaign at Jumeirah Beach Hotel, Dubai. Leslie Pableo for The National
  • Khaled bin Mohamed bin Zayed has launched a landmark clean energy partnership between Adnoc and EWEC that will see EWEC supply Adnoc’s grid power from nuclear and solar energy sources from January 2022. Photo: Abu Dhabi Government Media Office
    Khaled bin Mohamed bin Zayed has launched a landmark clean energy partnership between Adnoc and EWEC that will see EWEC supply Adnoc’s grid power from nuclear and solar energy sources from January 2022. Photo: Abu Dhabi Government Media Office
  • The UAE pavilion at the Cop26 summit in Scotland. Ashraf Helmi / The National
    The UAE pavilion at the Cop26 summit in Scotland. Ashraf Helmi / The National
  • Masdar City in Abu Dhabi. Andrew Henderson / The National
    Masdar City in Abu Dhabi. Andrew Henderson / The National
  • The Barakah Unit 2 grid connection delivers clean electricity. Photo: Emirates Nuclear Energy Corporation
    The Barakah Unit 2 grid connection delivers clean electricity. Photo: Emirates Nuclear Energy Corporation
  • An aerial view of the Qurum Walkway in Jubail Mangrove Park. The UAE is doing everything it can to tackle climate change, from limiting greenhouse gas emissions to planting more mangroves. Wam
    An aerial view of the Qurum Walkway in Jubail Mangrove Park. The UAE is doing everything it can to tackle climate change, from limiting greenhouse gas emissions to planting more mangroves. Wam
  • The Ministry of Climate Change and Environment is working to increase the amount of local produce grown by 5 to 10 per cent a year. Silvia Razgova / The National
    The Ministry of Climate Change and Environment is working to increase the amount of local produce grown by 5 to 10 per cent a year. Silvia Razgova / The National
  • The eco-green technologies research site at Sharjah Research Technology and Innovation Park. Chris Whiteoak / The National
    The eco-green technologies research site at Sharjah Research Technology and Innovation Park. Chris Whiteoak / The National
  • The Ministry of Climate Change and Environment has installed 300 artificial caves made of eco-friendly materials across 30 sites to enhance fish stocks in UAE waters.
    The Ministry of Climate Change and Environment has installed 300 artificial caves made of eco-friendly materials across 30 sites to enhance fish stocks in UAE waters.
  • The future of cycling in Al Hudayriat Island, Abu Dhabi, is commemorated by a community ride around the track. Victor Besa / The National
    The future of cycling in Al Hudayriat Island, Abu Dhabi, is commemorated by a community ride around the track. Victor Besa / The National

The UAE, Jordan and Israel signed an agreement in November to develop a renewable energy and desalination plant in the Hashemite kingdom to mitigate climate change and add to the growth of clean energy in the country.

“So, we just announced the project 'Prosperity', which is a combination of Jordan, the UAE and Israel building solar power output that will feed into Israel, while Israel is going to help produce a major desalinisation plant capacity for Jordan,” Mr Kerry said.

“And there is a synergy in that, not to mention that it helps build a foundation for countries to begin to think about each other and work with each other very differently from past history.”

The flaring of natural gas continues to be a problem in the region and results in the release of methane, a significant contributor to global warming, he said.

Ending flaring, in Iraq, for instance, other countries, flare still and vent. That is a real challenge because methane is so much more destructive than [carbon dioxide], we must stop those practices. And, obviously, plug the leaks of methane that are occurring into many parts of the world. Russia has a particularly heavy leakage challenge,” Mr Kerry said.

However, in the short-term, oil producers in the Middle East could help alleviate the impact of the energy crisis being felt worldwide, he said.

“Obviously, it would help to have some greater [oil and gas] production at this point in time in order to deal with some of the challenges of inflation and rise of price, particularly on gas for a lot of citizens around the world,” Mr Kerry said.

Fatih Birol, executive director of the International Energy Agency, in Davos. Photo: Bloomberg
Fatih Birol, executive director of the International Energy Agency, in Davos. Photo: Bloomberg

International Energy Agency executive director Fatih Birol said Russia's invasion of Ukraine had led to “a major energy crisis”.

“This is the first global energy crisis. We had the oil price crises of 1970s. But now, we have major problems in terms of oil, in terms of natural gas, in terms of coal,” Mr Birol said at the conference on Tuesday.

“Russia … was only a few weeks ago, number one oil exporter of the world, number one natural gas exporter of the world and the major player in the coal markets.”

Turmoil in markets, high prices and inflation are all giving “signals of recession” in some countries. Some countries have responded to meet the fall in supply “understandably”, he said.

Mr Birol said these temporary measures risk going beyond what is currently needed and could undermine efforts to control global warming.

Mr Kerry also stressed that the issue of energy supplies lost in Europe because of the Ukraine conflict should not be a distraction from the climate emergency and what is required to meet global goals.

“We should not allow a false narrative to be created, that what has happened in Ukraine, somehow, obviates the need to continue forward, and to accelerate even what we are trying to do to address the crisis of climate,” said Mr Kerry.

He pointed out that carbon dioxide emissions have gone up by 6 per cent while coal use has increased by 9 per cent in the last year.

“We can meet the crisis of Ukraine and the energy crisis of Europe, and still deal, as we must, with the climate crisis," he said.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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World Cut Steakhouse, Habtoor Palace Hotel, Dubai. On Thursday evening, head chef Diego Solis will be serving a high-end sounding four-course meal that features chestnut veloute with smoked duck breast, turkey roulade accompanied by winter vegetables and foie gras and pecan pie, cranberry compote and popcorn ice cream.

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Updated: May 24, 2022, 12:52 PM