The UAE has called for an inclusive approach to unlock the economic opportunity in climate action and said it would support progress towards practical, commercial and scalable solutions if affirmed as hosts of Cop28 in 2023.
Addressing a panel discussion organised by the Atlantic Council think tank at Cop26, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and UAE Special Envoy for Climate Change, said an umbrella approach bringing together all elements was needed for success in reducing the effects of climate change.
"We have adopted an inclusive approach to growth and progress, which contributed to many significant achievements over the past 50 years," Dr Al Jaber said.
"We will continue to follow this approach in line with the principles of the 50-Year Charter, which prioritises sustainable economic and social growth. Sustainable investments must first be sustainable financially."
Dr Al Jaber was speaking alongside US presidential climate envoy John Kerry, Kenyan Cabinet Secretary for Foreign Affairs Raychelle Omamo, and Bill Gates, co-chair of the Bill and Melinda Gates Foundation.
"First of all, let me thank the UAE and Dr Sultan Al Jaber," Mr Kerry told the audience. "He has just been a spectacular envoy and partner with us over these past months.
"The UAE hosted the very first Middle East climate dialogue, which involved four or five oil and gas producers, all of whom came on board for Net Zero, all of whom have been really committed to Cop and the process of responsible activity in all sectors, and I thank them for that and I wish them happy UAE Flag Day.
Mr Gates said: "Thanks to leadership of UAE and United States for kicking this off, we have about 30 countries now signed up for the initiative, where you make a commitment to raise your research and development for better agriculture, both seeds and livestock, digital mapping to help the farmers and digital advice."
He was speaking about the launch of the Agriculture Innovation Mission for Climate.
Ms Omamo stressed the importance of an inclusive approach to climate action.
"Cop 26 must remember the African woman, because the African woman is the way forward on our continent," she said.
"She’s the farmer, she’s the person that deals with our SMEs, she drives our economies.
"So whatever applications that we use or innovations that we begin to develop, we must develop them with the view of building inclusive society, societies that are prosperous for everyone."
Dr Al Jaber reaffirmed that the UAE’s inclusive approach was important for "innovation to scale, from capital to R&D, technology development and project delivery".
"Inclusivity means all sectors – governmental, private, academic and civil society – working together," he said.
"This must include countries with major hydrocarbon resources. They have huge energy experience and an essential role to play. The world needs to be open, not closed. It needs answers, not justifications.
"We began our investments in renewable energy 15 years ago. We focused on science and innovation, providing the space and the capital to turn ideas into world-class projects.
"Today, we have renewable investments worth $70 billion across 70 countries. We will grow our renewables position and we already have plans to increase the renewable energy capacity fourfold to about 9 gigawatts by the end of 2025."
Dr Al Jaber also spoke on the UAE’s offer to host Cop28 in 2023, which was endorsed by the UN Asia-Pacific Group of nations.
He said the UAE had set its ambitions high, and that the nation would approach dialogue and discussions with the same progressive drive, and focus on achievement and progress that enabled the UAE to mark significant achievements over its 50-year history.
"We seek to make Cop28 both flexible, compatible with the requirements of both developed and developing countries, and inclusive, recognising there are various paths towards net-zero emissions," Dr Al Jaber said.
"It is about getting to the destination on time, not about the route to get there."
On this year’s UN Climate Conference, Dr Al Jaber said there was "good progress and a great sense of hope. I would like to see Cop26 propose practical plans and solutions and avoid a one-size-fits-all approach.
"Certainly, developing nations require a completely different set of policies and incentives.
"Climate action should not become an economic burden on developing nations. Our focus must be on holding back emissions, not slowing growth and progress.
"It would be fruitful for developed nations to meet the $100 billion pledge on climate finance. The successful delivery of Article Six to set up functioning global carbon markets would be another strong indicator of the success of Cop26.
"If Cop26 can achieve all of this, then it will have been a big success. A successful Cop26 will also create momentum for Cop27, Cop28 and beyond."
If UAE is affirmed as the Cop28 host in 2023, Dr Al Jaber said he would work closely with the UK, Egypt and the UN Framework Convention on Climate Change to push for practical solutions that are commercial and scalable.
"The UAE has deep practical experience in energy, climate action and renewables, and we have a strong track record of mobilising support to address common challenges," he said.
"The Cop process is critical to the world, and each Cop must build on those that have come before.
"Cop28 is also the year of the global stocktake and this presents its own opportunity to assess where the world is and to further accelerate climate action."
Dr Al Jaber said collaboration and partnership underlined the UAE’s recent climate initiatives.
For instance, the new Energy Transition Accelerator Financing Platform, a $1 billion US-funded facility, launched in conjunction with the Abu Dhabi-based International Renewable Energy Agency, is designed to finance 1.5 GW of new renewable energy power projects in developing countries by 2030.
The Agriculture Innovation Mission for Climate (AIM for Climate) is a major joint initiative by the UAE and US with the support of more than 30 other countries.
The goal is to accelerate innovation in climate-smart agriculture and food systems over the next five years.
"Investing in innovation and advanced technological solutions in agriculture, such as heat-resistant crops, vertical farming and digital agriculture, will help enhance resilience in parts of the world that are most vulnerable to climate change, Dr Al Jaber said.
As an early mover in renewables, the UAE has the world’s largest solar park and a growing peaceful nuclear power sector.
The Barakah Nuclear Energy Plant is set to provide up to a quarter of the nation’s electricity needs when it becomes fully operational, saving up to 21 million tonnes of carbon emissions annually.
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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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