The 28th annual United Nations Conference of the Parties on Climate Change (COP28) was held in Dubai from Nov. 30 to Dec. 13, 2023. Ahead of the international gathering, the Baker Institute Middle East Energy Roundtable convened its fourth gathering of academic experts, research analysts, and industry leaders to examine the prospects and goals of the host country, United Arab Emirates (UAE).
Held under the Chatham House Rule, the roundtable is a collaborative venture between the Baker Institute Center for Energy Studies and the Edward P. Djerejian Center for the Middle East. This report is intended to serve as an aide-mémoire to those who took part and a general summary of discussions for those who did not.
Opening remarks from two UAE-based analysts, Robin Mills and Kate Dourian, addressed the UAE’s current foreign and domestic investments and how they mesh with COP aims to establish a global climate agenda strategy. A wide-ranging discussion among participants followed, against the backdrop of the climate crisis and unfolding energy transitions.
Key points that emerged from the meeting included:
- Major differences exist over the future viability of highly profitable fossil fuels, especially oil; these will remain unsolved and continue to hamstring future COP negotiations long after the Dubai meeting.
- Domestic clean energy investment in the UAE is driven more by economic than environmental goals.
- The UAE was the first Gulf country to declare a “net zero” goal and is assisted in that endeavor by its large emerging capacity in nuclear power generation.
- The Middle East is one of the least successful regions in terms of renewable power generation — most countries in the region generate less than 1% of their power by renewable means.
In the following sections we outline the discussion, explore the debates, and provide context to the issues.
Navigating Domestic Energy Transition and International Criticism
Led by Abu Dhabi, the UAE has a fossil fuel-dependent domestic economy that still heavily relies on exports of oil and, to a lesser extent, gas — since the first major discoveries in the 1950s and 1960s. In recent decades, the UAE has become a leader in the move away from dependence on oil and gas exports as Dubai, whose own oil production peaked in 1991, led the Gulf region in economic diversification and the creation of non-oil sectors. Diversification is a long-term process; oil and gas are both still extremely profitable and remain key to the well-being of the Emirati economy. The electricity sector, in particular, is still dependent on gas — which has left the UAE with a moderately high carbon-intensity power grid. It is, however, less carbon intensive than those in coal-dependent countries.
Clean Energy Generation and Aiming for Net Zero
In 2021, the UAE became the first Middle East country to set specific targets and aim for net zero carbon emissions by 2050. This calls for an almost complete decarbonization of the power sector. One of the domestic efforts toward net zero builds upon the UAE’s 2008 decision to develop a civil nuclear program. This program was a lengthy, expensive endeavor and is now close to full operation. In turn, although the UAE solar program has not been as widely discussed, it has been very successful. The UAE has achieved the lowest costs of solar-generated electricity in the world — under 2 cents per kilowatt-hour before the pandemic. However, national grids still cannot be sustained entirely on solar power without backup generation or storage. Despite its net zero aims, the UAE’s shift toward clean power generation is driven more by economic reasons than environmental ones.
Oil and Gas Production and Export
Additionally, the UAE is a significant exporter of oil and gas, with further increases in production capacity planned through 2030. This has resulted in extensive international criticism of the UAE as a COP28 host, primarily from European observers and environmental groups. It is important to remember that under the Paris Agreement every country has to report on its nationally determined contributions (NDCs), and if oil is exported from one country to another, the emissions become the responsibility of that second country. The UAE sees itself as a low-cost and low-carbon oil producer so arguably it has a good chance of being one of the last producers standing after 2050.
Carbon Capture and Renewables
The UAE has also promoted carbon capture and storage as a solution for abating emissions from fossil fuels, thus allowing continued production and combustion of oil, gas, and coal. International renewable investments are also a focal point of COP28; with the UAE establishing a small low-emissions development, Masdar City, while the Masdar investment vehicle has made profitable renewables investments in the U.S., U.K., and countries in East Asia.
Navigating Fossil Fuel Disputes in the Middle East
The highly contentious nature of fossil fuels among COP participants is of key importance to major producers such as the UAE and neighboring Gulf states. Saudi Arabia has consistently pushed back against the phasing out of fossil fuels, while the UAE has portrayed itself as a more constructive actor willing to make concessions in the interest of progress. Preparatory meetings in the runup to COP28 highlighted countries’ different perspectives on issues such as the “phasing down” versus “phasing out” of fossil fuels and threatened to overshadow the UAE’s stance on climate negotiations. Longer-term social stability in the Gulf states requires the gradual phasing in of climate policies and careful assessment of damaging energy subsidies, which may be difficult to remove without triggering a popular backlash.
The Role of COP Leadership
The president of COP28, Sultan Al Jaber, is also the UAE’s Special Envoy for Climate Change, Minister of Industry and Advanced Technology, and CEO and Managing Director of the Abu Dhabi National Oil Company (ADNOC). It fell to Al Jaber to balance the needs of various COP28 participants and navigate a path through competing interests and agendas.
Among major oil producers, the UAE has been more open than other producers to discussions around phasing out fossil fuels since the rhetoric has shifted to include pushback against wealthy industrial western countries who have attempted to duck responsibility for global warming by creating funding pools for developing countries.
Overshadowing the COP28 were conflicts in the Middle East and Ukraine that undercut progress on the climate agenda and deepened international division over appropriate policy responses. The latest Israel-Hamas war has intensified concerns regarding regional stability due to the ties between Iran and Hamas, and the possibility of Israeli or U.S. retaliation. Neither the Gulf states nor Iran was said to be interested in a widening conflict. Roundtable participants noted that geopolitical polarization is creating additional hurdles for COP parties to make progress on climate.
Possible Opportunities From COP28
Roundtable participants identified that there would be some low-hanging fruit: an agreement on methane abatement being one example. Indeed, the parties agreed to fund a 30% reduction in methane emissions by 2030.
While there has been progress in clean energy projects, pushback continues from several countries — each of which harbors diverse energy security concerns that do not always align with decarbonization. For instance, UAE national oil company ADNOC’s strategic upstream oil investments run contrary to the major decarbonization announcements of the UAE and ADNOC. COP28’s aim of reaching agreement to triple renewable energy capacity by 2030 depends very much on national action, including a major push in the developing world outside China, home to 65% of the global population but just 14% of global renewable generation capacity.
It is also important to consider the role of regional dynamics, particularly relations between the UAE and China, and whether tensions with the U.S. could impact these relations, or climate and technology developments. States across the Middle East want the ability to choose their economic and energy security partners — these relationships are critical to the clean energy transition.
Relationships with China
The UAE has taken advantage of Chinese clean energy supply chains and benefitted from lower costs for solar power production, all while maintaining good relations with both China and the United States. However, the effect of government subsidies on domestic energy demand and carbon emissions, as well as the competitive business environment has made the transition in Gulf states more difficult.
One participant in the roundtable raised Saudi Arabia's efforts to establish critical mineral supply chains independent of China through the Saudi-Israel normalization talks, which had been disrupted by the war in Gaza. It was emphasized that the situation would take time to settle and resumption of these supply chain discussions may depend on Israeli actions in Gaza.
Discussion about China investing billions of dollars in the Gulf Cooperation Council (GCC) highlighted a shift in the relationship between Gulf states and China away from oil trade alone. Despite this close cooperation with China, the U.S. still plays a major role in security provision in the Gulf region, with military bases and installations in Kuwait, Bahrain, UAE, and Qatar.
The percentage of renewable energy within the Middle East North Africa is among the smallest in the world, only about 1% of the total in 2022. Only Egypt, Morocco, and Jordan generate meaningful portions of their electricity by renewable means. Scaling this up is a tall order. Jordan has leveraged its lack of hydrocarbon resources as a motivating factor — some 20% of its electricity generating capacity is powered by solar or wind. While most of the nuclear energy in the region is produced in the UAE and Iran, other countries like Saudi Arabia have been discussing launching their own civil nuclear initiatives.
Demand Reduction Is Needed
A participant expressed their view that the COP28 negotiations had been overly focused on concerns about the supply of fossil fuels and efforts to curtail supplies, without paying sufficient attention to equally crucial efforts to reduce demand for fossil fuels. This imbalance reflects the political challenges associated with confronting consumer behavior to reduce demand for fossil fuels.
The roundtable also touched on the impact of extremely high temperatures — often exceeding 120°F and sometimes nearing 130°F — in the Gulf region, prompting questions about its influence on public opinion regarding climate action. Participants noted the following concerns:
- Heat manageability — extreme heat is manageable in wealthy countries where air conditioning is widely available, while poorer residents in neighboring countries face health threats and political instability due to unbearable heat and water scarcity.
- Energy-intensive practices of air conditioning and desalination —the market is fragmented and not ready for a sustainable energy transition.
The Middle East Energy Roundtable focused on the UAE’s current foreign and domestic investments and how they mesh with COP to establish a strategy for the global climate agenda. As we look back to the recent COP28 gathering, some of the key highlights include:
- The conference saw nearly 200 nations commit to transitioning away from fossil fuels, highlighted by the inclusion of fossil fuel language in the final agreement for the first time. Interpretations of the meaning of this clause have varied since the COP, however, raising questions about governments’ depth of commitment.
- COP28 participants reached an agreement on the operationalization of funding arrangements for addressing loss and damage in developing countries, with commitments totaling USD 661 million to date. Although this is a move in the right direction, some critics argue that the millions pledged are less than 0.2% of the amount needed.
- The UAE burnished its credentials as a regional leader in the climate space and illustrated its ability to play a convening role in crafting coalitions and delivering tangible outcomes which ensured COP28 was not the failure its critics predicted.
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