The UAE recognises the “high expectations” for Cop28 in Dubai and will host the climate talks with a “great sense of urgency”, the summit’s chief executive said on Monday.
Adnan Amin told diplomats that Cop28 should result in a “just and balanced energy transition” that spurs the switch from fossil fuels to renewables while keeping costs in check.
The incoming UAE presidency will work with polluters to cut back their emissions and keep alive the Paris Agreement goal of limiting global warming to 1.5°C, Mr Amin said.
“Our approach is underpinned by optimism and by hope,” he said during the talks in Bonn ahead of Cop28 in November and December.
Scientists advising the UN say deep emissions cuts from sectors such as transport, industry, heating and agriculture are needed to prevent a worst-case temperature rise.
Many countries, cities and businesses have set targets of net zero emissions by 2050, however, several plans lack transparency and fail to meet essential criteria, according to a report released on Monday.
The world’s current policies are projected to cause more than 3°C of global warming – which would take humanity into a “new kind of world” marked by flooding and intense storms, one leading scientist told The National.
Mr Amin said the UAE presidency was pushing for a tripling of global renewable energy and a doubling of hydrogen capacity by 2030 as part of the drive for clean fuels.
It is also working with the oil and gas sectors and high-emitting industries to “drive deep decarbonisation”, he told delegates.
Hydrogen is tipped as a replacement for fossil fuels in sectors such as aviation and shipping.
“We recognise the high expectations the world has for the Cop28 presidency to deliver on the energy transition,” Mr Amin said.
“Let me assure you we intend to do just that, in close co-operation with high-emitting sectors, to raise ambition on near-term decarbonisation and deliver measurable emissions reduction to put us back on the path to alignment with the Paris ambition.”
He added that energy security, accessibility and affordability “should remain a top priority” as the world switches away from fossil fuels.
“We take on the role of hosting Cop28 with humility, a deep sense of responsibility and a great sense of urgency,” he said.
In talks with African negotiators, the UAE presidency has said the switch can only take place if investment “flows at scale” to make finance and technology available.
Minister of Industry and Advanced Technology and the Cop28 President-designate Dr Sultan Al Jaber, who is also the UAE special envoy for climate change, said Africa was “rich in clean energy resources” such as solar, wind, geothermal and hydroelectric power.
These resources give Africa “huge potential for low-carbon growth and sustainable development”, he said while attending the talks in Bonn.
The summit heard from a representative of Moroccan businesses who warned that the climate crisis has the potential to deal severe blows to Africa’s growth prospects,
Said El Hadi, who runs a green commission at the General Confederation of Moroccan Enterprises, said global warming “has obviously affected the economic growth of the country”.
“Africa is the continent that has contributed the least to climate change,” he said, “yet Africa is clearly deeply affected by climate change and suffering to a great extent from its consequences”.
Egypt, which hosted Cop27 in Sharm El Sheikh last year, said the incoming UAE presidency had its full support.
Cop28 will take place in Dubai’s Expo City on November 30.
The global south has repeatedly pressed for rich countries to make good on a promise of $100 billion of annual climate finance for the poorer world, which has yet to materialise despite being pledged in 2009.
Germany expressed optimism at recent talks in Berlin that the $100 billion target was within reach, even as experts predicted the cost of a green overhaul would run into the trillions.
The delayed funding “remains an unnecessary distraction from our shared process and an impediment to restoring trust,” Mr Amin told negotiators in Bonn.
“We very much welcome the positive signals from developed countries that indicated 2023 will mark the achievement of this objective.”
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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