Every country needs to step up for the world to win the climate change battle, US climate envoy John Kerry said.
Speaking at the 13th Irena Assembly in Abu Dhabi on Saturday, Mr Kerry said 2023 needs to be the “year of reality” and that “we are moving too slowly” to meet key environmental goals.
More than 190 countries are part of the legally binding Paris Agreement, a global framework to avoid dangerous climate change by limiting the Earth's warming to 1.5°C.
“There's nothing in the current activities of countries all around the world that indicates that we are prepared to do what we need to do in order to meet the 1.5°C (goal),” said Mr Kerry during a panel session titled ‘World Energy Transition – The Global Stocktake’.
“The United States is now about 10 per cent of emissions – down from 15 per cent and heading down.
“And I have to tell you – even if we went to zero, even if China went to zero, we don't solve the problem, every country has to step up.”
Mr Kerry said that countries were missing the opportunity of buying into the renewable energy transition, despite it being “potentially the most exciting economic transformation”.
Private sector support is required
He said that trillions of dollars were still needed in the battle against climate change and that the private sector could lead global efforts.
“No government in the world has enough money to do what we need to do,” he said.
“We're talking about trillions. Who has the trillions? The private sector has the trillions.
“So, what we need to be doing globally is exciting that private sector money to begin to move to bankable deals, which bring development to parts of the world that have been left out.
“But also enlist everybody in the effort to be able to make the transition to the kind of a world and economy that we need.”
Siaosi Sovaleni, prime minister of Tonga, said they were increasingly partnering with private companies to reach their national targets.
The country is trying to achieve 70 per cent renewable energy generation by 2025.
Its previous goal was to achieve the figure by 2030, but it renewed its targets after the soaring energy prices caused by Russia’s invasion of Ukraine.
“When Russia invaded Ukraine, we experienced very high fossil fuel prices.
“And in such electricity, food and shipping freight prices went up.
“So, basically, we want to get away from that, so we renewed some of our targets.
“In the Pacific, we've been known to be frustrated with the lack of access to financing from proper facilities.
“So, the other alternative is working with private sector on bankable projects, and that's what's happening.
“And that's why it has allowed us to have this very ambitious target for renewable energy.”
The progress countries are making under the Paris Agreement started getting assessed at the UN Climate Change Conference (Cop26) in 2021.
And the assessment will conclude at Cop28 in Dubai this year.
Cop28 head says event will be 'milestone moment'
Dr Sultan Al Jaber, president-designate of Cop28, gave one of the opening speeches during the first day of the assembly.
“Cop28 will be a milestone moment, as the world conducts the first global stocktake to assess progress against the goals of the Paris Agreement,” said Dr Al Jaber, who is also minister of industry and advanced technology and managing director and group chief executive of Adnoc.
“We don't need to wait until the global stocktake to know just how much work there is ahead of us.
“As we seek to close the gap between ambition and reality, no sector offers as much potential as renewable energy.”
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At a glance
Fixtures All matches start at 9.30am, at ICC Academy, Dubai. Admission is free
Thursday UAE v Ireland; Saturday UAE v Ireland; Jan 21 UAE v Scotland; Jan 23 UAE v Scotland
UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
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.”
