Energy Transition

COP28 demonstrated that inclusivity is central to a just energy transition

We need to address the fundamental issue of equity in the energy transition.

We need to address the fundamental issue of equity in the energy transition. Image: Pexels.

Majid Jafar
Chief Executive Officer, Crescent Petroleum
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COP28

This article is part of: World Economic Forum Annual Meeting
  • Discussions at COP28 emphasized the importance of an equitable and inclusive global energy transition.
  • Strengthening cross-regional collaboration across the Global North and South will be critical to reaching net zero.
  • A new report by the World Economic Forum, Building Trust Through an Equitable and Inclusive Energy Transition, highlights possible solutions.

Last year the world saw record temperatures amid a global consensus on the need to decarbonize energy systems. Yet 1 billion people in OECD developed economies consume more energy and are responsible for more of the historic stock of carbon in the atmosphere, than the 7 billion in the Global South. With the average African consuming a tenth the energy of an average European and a twentieth of an average American, there is a fundamental issue of equity in the transition to a lower carbon economy.

It has been a month since COP28 concluded by announcing the UAE Consensus, the annual meeting proved the importance of inclusivity for tackling climate change and fostering a just energy transition. By welcoming the private sector as well as NGOs, and more importantly, by ensuring the developing world was represented and consulted at every level of the agenda, COP28 was able to deliver an agreement with advances that will have real and lasting impact on the transition to a lower carbon world.

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A wide range of milestones were reached during the meeting, including the establishment of a loss and damage fund, the UAE’s establishment of the groundbreaking $30 billion Alterra investment fund for transformative climate partnerships to finance the energy transition, concrete commitments to triple nuclear power and renewable energy sources, as well as commitments by governments to double energy efficiency by mid-century, concluding with a historic commitment to transition away from fossil fuels in energy systems, in a just, orderly and equitable manner.

Bridging the global energy divide

The backdrop to much of the deliberations was how to achieve the energy trilemma of equity, security, and sustainability, which every nation has been grappling with, especially since the energy crisis of 2022. Every part of this trilemma is critical to maintaining equilibrium. But while European consumers were reminded of the importance of the trilemma last winter, the developing world has faced this consideration for decades and increasingly fears their future coming down to reducing emissions at the cost of economic progress. With close to 900 million people still without electricity and 2.4 billion without clean cooking fuels, this divide on affordable energy access is stark and fundamental to the challenge.

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How is the World Economic Forum facilitating the transition to clean energy?

Bridging this divide is critical to advancing a just, equitable, and inclusive energy transition, and ensuring that the voices and concerns of the developing world are heard, is central to making major strides. After all, the developing world is where the entire climate change battle will be won or lost; it is where all the net growth in emissions will come from, because it is where the most rapid economic and population growth is taking place.

These nations must progress towards a lower emission pathway, but policy-makers must disabuse themselves of the idea that progress can be accomplished by reducing access to energy supply or simply cutting consumption. Enabling the developing world to enjoy full prosperity with a lower carbon footprint is crucial to this. And that means concrete solutions for firm power including baseload to replace a need for burning coal. Renewable energy backed up by natural gas fired power is the most effective solution for cutting carbon emissions quickly and affordably and leads to 70% reduction in emissions versus coal. The remaining 30% can either be captured or transitioned to still cleaner fuels like hydrogen, when feasible.

License to operate

The oil and gas industry also showed it can make tangible progress at COP28 to be part of the solution. The Oil and Gas Decarbonization Charter was a clear signal of the industry’s intention to ensure it has license to operate. Around 50 international oil and gas companies are signatories to the charter, which calls for net-zero emissions by 2050 or before, and near-zero upstream methane emissions and zero routine flaring by 2030, marking a point of consensus by oil and gas producers to deliver energy more cleanly.

Initiatives like these can create a virtuous circle of emissions reductions while ensuring affordable and reliable energy supply for developing economies.

Power of global cooperation

Ultimately, change on the order required to reduce emissions is only possible with global cooperation.

COP28 placed special emphasis on unlocking financial mechanisms to respect and address the needs of developing nations by fulfilling climate funding commitments and providing finance as well as technical support and assistance. The UK, France, World Bank, Inter-American Development Bank (IDB), European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD) and African Development Bank (ADB) all made new commitments to expand Climate-Resilient Debt Clauses (CRDCs) in their lending.

As an early and major investor in all forms of energy, the UAE also has the resources, both in terms of finance and low-cost solar energy supply, to advance the technologies of the future such as the hydrogen economy. It is a global leader in investing in green energy with plans to invest $100 billion in renewables around the world as well as a clear national net-zero target by 2050.

The legacy of COP28 and the UAE Consensus will be ensuring inclusivity for all parties to yield lasting change. Its success will be a testament to the convening power of the UAE and its unique ability to bring together the Global North and South and embrace the diversity of views to build consensus.

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Energy TransitionForum InstitutionalGlobal Cooperation
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