The United Nations’ March 20 report is a clarion call for urgent action to limit global warming before it reaches an unsustainable level and may galvanize decarbonization efforts ahead of the U.N. Climate Change Conference, COP28, in November in the United Arab Emirates. It is the last installment of the U.N. Intergovernmental Panel on Climate Change’s Sixth Assessment Report, a compilation of eight years of research and observations from hundreds of the world’s leading scientists and experts. The report serves as a guide for policymakers and carries weight because it is endorsed by governments. The report is a red flag for the planet and humanity, pointing to the urgent need for a course correction given that current emission reduction pathways and technologies are insufficient to reach the goal of net-zero emissions by 2050.
The report raised the alarm with its prediction that the nationally determined contribution emission reduction pledges made by signatories to the 2015 Paris Agreement would make it “likely that warming will exceed 1.5°C during the 21st century and would make it harder to limit warming below 2°C.” The report blamed “human activities, principally through emissions of greenhouse gases” for the rise in global temperatures to 1.1 degrees Celsius above preindustrial levels from 2011-20. Keeping warming below 1.5 degrees Celsius will require emissions to peak by 2025 and decline by 43% from 2019 levels by 2030, demonstrating the urgency of the action needed to avert the catastrophic degradation of the ecosystem. But the IPCC report deduces that “policies implemented by the end of 2020 are projected to result in higher global greenhouse gas emissions in 2030 than emissions implied by” current nationally determined contributions.
The 196 signatories to the Paris Agreement at COP21 pledged to limit “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.” The IPCC report suggests that the decarbonization effort should be faster and emission reductions must be achieved much earlier than 2050 to limit extreme weather events. The report noted that in 2019, concentrations of carbon dioxide, one of the greenhouse gases contributing to global warming, were “higher than at any time over at least the past” 2 million years.
Rapid changes have already occurred in the atmosphere and oceans, affecting weather and causing climate extremes in many parts of the world, the report stated, a reference to the recent increase in forest fires, flooding, and heatwaves around the world. “It is unequivocal that human influence has warmed the atmosphere, ocean and land,” it concluded. Climate change has caused substantial damage to the habitat “and increasingly irreversible losses,” the report added, noting that around 3.6 billion people live in highly vulnerable areas where human mortality from floods, droughts, and storms is 15 times higher than in less vulnerable regions.
The United Nations Framework Convention on Climate Change, the parent treaty of the Paris Agreement, has previously warned that a temperature rise above 1.5 degrees Celsius risks “unleashing far more severe climate change impacts, including more frequent and severe droughts, heatwaves and rainfall.” But the current report finds that even 1.5 degrees C is not enough to stave off the effects of climate change: “Projected adverse impacts and related losses and damages escalate with every increment of global warming,” so higher temperatures will make it more difficult to manage climate change risks as adaptation measures that are employed today become less effective.
The 2020 coronavirus pandemic and Russia’s February 2022 invasion of Ukraine further complicated the decarbonization effort. The pandemic distorted energy consumption patterns when much of the world was forced into lockdown, while the Ukraine crisis wreaked further havoc on supply chains, food supplies, and the commodities market, including energy flows, as energy security became a priority for policymakers. The interruption of Russian oil and gas supplies due to sanctions and embargoes imposed by the European Union and its allies led to a scramble for alternative oil and gas supplies, resulting in a rise in emissions in 2022 as coal made a comeback. Greenhouse gas emissions would have been higher still were it not for growth in renewable energy sources, such as wind and solar, the International Energy Agency stated in its “CO2 Emissions in 2022” report.
The Paris Agreement was hailed as a landmark agreement because almost the whole world finally came together and agreed to tackle the climate agenda in a coordinated and comprehensive manner. While the agreement is binding, it does not include enforcement and monitoring mechanisms to track progress. It was left to subsequent climate summits to tackle outstanding matters, including climate finance for developing countries, which is still far short of pledges, and the role of fossil fuels in the energy transition, which is likely to be a contentious issue at COP28.
COP27, held in Egypt in November 2022, was not a runaway success, but it did result in an agreement on the creation of a “loss and damage” fund to compensate vulnerable countries adversely affected by climate change. Developing countries have long argued that responsibility for climate change lies with the industrialized countries, the largest per capita contributors to greenhouse gas emissions.
The final COP27 communique appeared to bear the stamp of the oil producing countries and even some major consuming countries in and outside the Middle East, as it avoided a clear statement on the need to phase out fossil fuel use, a key demand of environmental groups. Deadlock over the issue threatened to scuttle a final agreement. In the end, a watered-down version called on parties to accelerate the transition to lower emission energy sources by “scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies.”
As an official for a major oil producing state, COP28 President-designate Sultan Ahmed Al Jaber, who is both CEO of the Abu Dhabi National Oil Company and chair of the state-owned clean energy producer Masdar, is well aware of these challenges. Speaking at the CERAWeek energy conference in Houston in early March, Jaber called for a “major course correction,” warning that the world is “way off track” in its efforts to limit global warming.
Jaber said he sees a role for the oil and gas industry alongside renewable sources in the energy transition so long as fossil fuels are decarbonized both at the source and on the consumer end – what are considered “scope 3” emissions that are associated with the end use of a product. His dual role is seen as an advantage by some but as a setback to the climate agenda by environmentalists. The IPCC report does make allowances for fossil fuels with carbon capture and storage, a technology favored by oil producing countries and energy companies, in the transition to very low or zero-carbon energy sources in parallel with energy efficiency measures.
“Everyone in the industry needs to be aligned around the same goal. And we should stretch ourselves to go further, and let’s aim to achieve net-zero even earlier,” Jaber told delegates in Houston. “Let’s scale up best practices and aim to reach net-zero methane emissions by 2030. We must electrify operations, equip facilities with carbon capture and storage, and use all available technologies to increase efficiency across the board,” he added.
Jaber, who is known for getting things done, will have the difficult task of combining his dual roles and finding common ground to make COP28 a success. The forthcoming summit will take stock of progress made since 2015, as mandated by the Paris Agreement. It will also offer countries the opportunity to present more ambitious action plans.
Middle Eastern states have primarily fossil fuel-driven economies, but that is changing as more and more governments incorporate clean energy into their policy agendas. However, while the entire region is highly vulnerable to the impacts of climate change, particularly water stress, not all countries are on the same path regarding climate action, mitigation, and adaptation.
The latest report from the International Renewable Energy Agency postulated that to limit the global temperature rise to 1.5 degrees Celsius, the world must produce more than 1,000 gigawatts “of annual renewable capacity additions until 2050.” To put that into context, in 2022 a record increase of 295 gigawatts in renewable energy capacity was achieved, representing 83% of global power additions, meaning that capacity additions will need to more than triple each year to reach the 1,000-gigawatt goal.
Capacity additions in 2022 were concentrated in Asia, where there was a 12% increase, mostly in China. Asia accounts for 48% of total global renewable generation capacity, while North America makes up just 15%, despite achieving an increase of 6.3% in 2022.
According to IRENA, a record 3.2 gigawatts of new capacity was commissioned in the Middle East in 2022, an increase of 12.8% in one year. Yet the Middle East accounts for just 1% of global renewable energy capacity. Africa’s share is slightly higher, at 2%, but that’s because it includes South Africa, Egypt, and Morocco, which have the highest penetration of renewable capacity on the continent.
Saudi Arabia and the UAE, among the top oil producers in the OPEC+ alliance of OPEC and non-OPEC producers, have argued that oil and gas will continue to have a share in the energy mix for decades to come. As such, they have adopted a hybrid energy policy that incorporates oil and gas capacity additions alongside renewables.
Among the Gulf Arab states, the UAE has the highest percentage of renewable energy in its mix, with 3.058 megawatts of capacity. In the Middle East, only Iran and Israel have greater penetration of renewables. Saudi Arabia is low in the rankings having produced just 443 megawatts of energy from renewables in 2022, though it has made rapid progress since 2002, when it recorded only 22 megawatts of renewable capacity. These numbers are expected to rise, as the kingdom has stepped up its clean energy agenda and set a target of reaching net-zero emissions by 2060. Riyadh showcased its green energy plans on the sidelines of COP27 and has since announced plans to invest around $265 billion in clean energy by 2030, including by building the world’s largest green hydrogen plant as part of the Neom megaproject.
The UAE took advantage of Abu Dhabi Sustainability Week in January to showcase its clean energy program, which includes investments in additional solar capacity, green and blue hydrogen, and carbon capture and storage. The UAE already has a very diversified energy mix and is the only Gulf Arab state with an operational nuclear power plant. ADNOC is also increasing its clean energy footprint. In December 2022, ADNOC acquired a 24% stake in Masdar and announced plans to lead the company’s hydrogen business. Masdar aims to produce 100 gigawatts of renewable energy capacity and up to 1 million tons of green hydrogen by 2030. Jaber helped launch Masdar in 2006. Having a foot in both the hydrocarbon and renewables production camps aligns with Abu Dhabi’s energy policy, which incorporates hydrocarbons and low-carbon energy sources.
ADNOC is also proceeding with plans to increase its oil and gas production capacity from around 4.4 million barrels per day to 5 mb/d by 2027, three years ahead of its original schedule. However, it also plans to invest $15 billion in clean energy projects to diversify its portfolio, which had been heavily weighted in favor of oil and gas. ADNOC has already achieved results in its drive to develop low-carbon sources, and solar capacity is set to rise further when a 2-gigawatt photovoltaic plant at Al Dhafra comes online in 2023. The addition of nuclear capacity has allowed Abu Dhabi to lower gas consumption in power generation and reduce carbon dioxide emissions.
Saudi Arabia was slow to jump on the renewable energy bandwagon, but it has increased its ambitions and is targeting a 50-50 split between natural gas and renewables in power generation by 2030 with a mix of solar, wind, and, eventually, nuclear. Additionally, Riyadh plans to build the world’s largest carbon capture, utilization, and storage facility. This two-track approach would allow the world’s top oil exporter to market a cleaner hydrocarbon product and ensure the longevity of crude oil in the energy mix, preserving its role in the global oil market while also weaning the Saudi economy off its overdependence on crude oil exports, a main objective of the Vision 2030 economic reform program. The kingdom has set a slightly later target of 2060 to reach carbon neutrality. The Saudi Green Initiative reported in March that two years after its launch, energy from solar and wind projects is already providing enough power to light up 150,000 homes, and over 11 gigawatts of additional renewable energy capacity is under development.
Elsewhere in the Gulf, Oman is betting on the growth of the hydrogen economy and has set in motion a series of renewables projects to develop green hydrogen in line with its national transition strategy. To that end, Oman has signed nonbinding agreements with international companies, including BP and Shell, to produce green hydrogen by 2030, which will require its wind and solar capacity to be increased from 688 megawatts to 15 gigawatts and an investment of $20 billion.
Qatar, one of the world’s top three exporters of liquefied natural gas, is focusing more on expanding its production capacity from 77 million metric tons per year to 126 million mt/y by 2027. Doha’s strategy is to maintain its leading position as an exporter of LNG, which it believes will be a necessary transition fuel well into the future, by adopting carbon capture and storage technology to lower the carbon content of its LNG. It also plans to end routine flaring from its operations and increase renewable energy capacity to 2-4 megawatts by the end of the decade. To that end, Qatar inaugurated its first commercial solar power plant in October 2022.
All this points to the oil producing countries of the Middle East shifting to a new strategy that focuses on embracing new technologies and decarbonizing the polluting industry that has sustained their economies for decades. Oil export revenue, which hit a record high in 2022, has helped drive the decarbonization push in the Gulf. But investments elsewhere will need to be far higher to reach carbon neutrality by 2050. Moreover, adaptation funding has come mainly from state budgets rather than private finance, which will need to be mobilized.
When presenting its net-zero scenario in 2021, the IEA estimated that global annual clean energy investments must grow from the current average of $2 trillion to almost $5 trillion by 2030 and $4.5 trillion by 2050. However, the developed countries have thus far fallen short of the pledge they made in Paris to annually mobilize $100 billion in climate finance by 2025. At COP27, the multilateral development banks and international financial institutions were urged to mobilize climate finance.
The IPCC report warned: “There is a rapidly closing window of opportunity to secure a liveable and sustainable future for all,” adding that actions taken this decade will have impacts for thousands of years. U.N. Secretary-General António Guterres said in presenting the report that it showed the 1.5 degrees Celsius goal is achievable but will require “a quantum leap in climate action” to be reached. Notably, Guterres called for a total end to the use of coal by 2040 and a “global phase down of existing oil and gas production, compatible with the 2050 global net-zero target.” Leaders at COP28 should commit to “ambitious new economy-wide nationally determined contributions encompassing all greenhouse gases” and hit the “fast-forward button on their net-zero deadlines,” he added. “In short, our world needs climate action on all fronts – everything, everywhere, all at once,” Guterres declared, drawing on the title of a recent Oscar-winning film.