Head of Strategy, Energy Transition of the Office of the UAE Special Envoy for Climate Change, Abdulla Malek addresses the panellists at the opening ceremony for Energy Day during the United Nations Climate Change Conference COP28 in Dubai, United Arab Emirates.
Credit: Reuters
By David Fickling
There’s a common lament echoing through the halls of Expo City Dubai, the 1,000-acre conference venue where the COP28 climate conference is being held: This event feels more like a slick trade show than an environmental summit.
About 100,000 attendees — nearly three times the number who attended COP26 in Glasgow two years ago — are milling through the venue. Fossil fuel companies have more than 2,000 representatives attending — including Sultan Al Jaber, the president of the conference as well as the chief executive officer of the Abu Dhabi National Oil Co., the United Arab Emirates’ state-owned petroleum business. Lavish provision of food, drink, events, and golf buggies to ferry delegates around the vast site make it feel as much like an industry conference in Las Vegas as a sobering reckoning with environmental catastrophe.
Climate activism, meet capitalism. You two should get to know each other better.
This isn’t a frivolous point. Since the industrial revolution, our civilization has been built around fossil fuels. Fixing the resultant emissions can be likened to digging out the foundations of the global economy and resetting them on a new, cleaner footing. It’s an extraordinary stroke of luck that we now have most of the technologies needed to not only achieve this objective, but to do so at a lower cost than the carbon-intensive alternative. Getting that new economy built, however, is going to involve one of the biggest splurges of peacetime investment the world has ever seen.
Just how big? To a rough approximation, the world spends between $2 trillion and $2.5 trillion a year on its energy systems, around the annual gross domestic product of France. Only in the past few years has clean power started to decisively overtake fossil fuels to take the majority share of that budget, but things still need to accelerate.
Clean energy investment in 2030 must be roughly double the $1.7 trillion spent this year if the world is to meet governments’ existing commitments, according to the International Energy Agency. That rises to about $4.5 trillion if we’re going to put the world on a sure path to zero emissions.
Renewable capacity worldwide is already sufficient to power China, the US and Europe at peak output, but leaders of the Group of 20 major economies have promised to triple it by 2030. All those wind turbines, solar panels and transmission lines won’t come cheap — and the funds aren’t going to be mobilized by peer-reviewed studies or protest placards.
For too long, global capital has underestimated both the threat and the opportunity of the energy transition. It’s no bad thing that it’s waking up to both sides of the equation.
The recent surge in prices for fossil fuels and the crisis in the offshore wind industry helped give the carbon producers some of their confidence back in 2023. Current ebullience looks like turning into the hubris that has long plagued the sector whenever the investment cycle peaks, however. On a 10-year timeframe, renewable power companies still do a better job of covering their costs of capital than petroleum businesses and fossil-powered utilities.
In that sense, the number of corporate types turning up at climate conferences should be taken as a positive, rather than a negative indicator. Global commerce has long structured itself around trade fairs, expos and conferences that commonly host 10,000 people at a time. Where the suits lead, money follows.
Visitors to the 500-desk media center in Dubai — one of the biggest pavilions at COP28 — could be forgiven for thinking otherwise, but the $1.7 trillion emerging clean-energy economy remains woefully under-explored, especially compared to the coverage we lavish on a stagnating petroleum industry that invests less than half that amount. This imbalance will only grow as the likes of CNBC and Vox lay off climate reporters.
It’s certainly true that the epic scale of COP28 may be too much of a good thing. Trade shows thrive on intimacy as much as scale. Dealmaking is fueled by the opportunity for in-person meetings, something that is made a lot harder when getting to the far side of the venue resembles crossing the concourse of Grand Central Station 10 times in rush hour.
The green economy already has plenty of its own industry events, too. So it’s certainly true that spreading some of the load back to those conferences would give diplomats at the United Nations Framework Convention on Climate Change more breathing space to do their own important work.
Still, from the dawn of industrial capitalism we’ve recognized that altruistic ends are often achieved through unedifying greed. It’s not, as Adam Smith wrote, “from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.”
If big business is finally recognizing that its self-interest converges with that of the planet, that’s not a bad thing.