WGS in Dubai: 'We need a major course correction' on climate, says Dr Sultan Al Jaber

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Dr Sultan Al Jaber, president-designate of the Cop28 summit, on Tuesday said the world needed a “major course correction” to tackle climate change.

The Minister of Industry and Advanced Technology and Special Envoy for Climate Change said the world was way off track, with current approaches no longer "fit for purpose".

Speaking at the World Government Summit in Dubai, Dr Al Jaber, also group chief executive of Adnoc and chairman of Masdar, said entire industrial systems that still run on the energies of the first Industrial Revolution must be transformed.

The hard reality is that global emissions must fall 43 per cent by 2030. That’s just seven years away. We need a major course correction

Dr Sultan Al Jaber

He said the UAE, as hosts of Cop28, was approaching the task of securing consensus at the crucial summit with humility, a clear sense of responsibility and urgency.

“The hard reality is that global emissions must fall 43 per cent by 2030. That’s just seven years away. We need a major course correction,” he said.

“We are not shying away from energy transition, we are running towards it.”

Leaders and delegates from across the world will travel to the UAE in November for the key summit at Expo City Dubai where they will assess how to address the escalating climate emergency. Dr Al Jaber’s role will be to shape its agenda and help countries try to find agreement during up to two weeks of intense and often tortuous negotiations.

The need for urgency is clear with devastating floods inundating Pakistan last year and extreme heatwaves scorching countries such as the UK, India, China and the US. Scientists predict that these events will become more common and deadlier.

Nations at Cop28 are expected for the first time conduct a “global stocktake” that examines whether pledges made under the 2015 Paris climate agreement go far enough to halt warming emissions.

Agreed in 2015 and signed by about 200 countries, the Paris accord aims to limit global temperature rises to 1.5ºC and to keep them “well below” 2.0ºC above pre-industrial levels.

Many of the world largest emitters — caused mainly by burning fossil fuels — have yet to submit plans to cut emissions in line with Paris and the UN and climate experts say the world is running out of time to act.

“We don’t need to wait for the stocktake to find out what it will say,” said Dr Al Jaber. "We already know that we are way off track. The world is playing catch-up when it comes to holding global temperatures down to 1.5ºC.”

It will be the second successive UN climate change conference to be held in the Middle East, following Cop27 in Egypt. One of the few main agreements last year in Sharm El Sheikh was the creation of a “loss and damage” fund.

The fund aims to help developing countries deal with the effects of climate change but many questions remain about how it will be financed and it is expected to resurface at Cop28.

Dr Al Jaber said the world had to shift from incremental steps to “transformational progress” across mitigation, adaptation, finance and also loss and damage.

On mitigation — cutting warming emissions — Dr Al Jaber said the world had to “triple renewable energy capacity, double hydrogen production, expand nuclear power, improve battery storage and, if we are serious about capturing emissions, scale up carbon-capture technologies”.

He said the energy transition must not leave behind the “800 million people” who are excluded from access to energy today.

“We must eliminate energy poverty, while keeping 1.5ºC alive,” he said. “And we must cater for a world that will be home to an additional 2 billion people by 2050. In short, we need to hold back emissions, not progress.”

As Cop28 president, he said he aimed to lay out a road map that was inclusive, results-orientated and “far from business as usual”. He highlighted the speech made by President Sheikh Mohamed at the summit in 2015, when he said the UAE would celebrate the last barrel of oil to be exported.

“It was a bold call to action that resonated deeply around the world and it absolutely resonated with me,” said Dr Al Jaber.

He added that he would engage the energy sector “because it is in our common interest to have the energy industry working hand-in-hand and alongside everyone on the solutions that the world needs”.

Dr Al Jaber said: "Economists estimate that decarbonising industry, the energy sector, power generation, transportation and food systems could create an additional 12 trillion dollars in economic value by 2030."

He said the UAE was “listening to everyone and engaging with everyone”.

"There are moments in history when humanity comes together to fight a common threat. Let's prove to ourselves that we can do it once again. Let's put our differences aside. Fight climate change, not each other.

“We believe that game-changing solutions can be achieved if the collective political will is there. It certainly is from the UAE. Let’s stop deliberating and start delivering.”

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.”

What sanctions would be reimposed?

Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:

An arms embargo
A ban on uranium enrichment and reprocessing
A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
A targeted global asset freeze and travel ban on Iranian individuals and entities
Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods

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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