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Antonio Guterres emphasised just last week that achieving the 1.5-degree Celsius limit is contingent upon ceasing all fossil fuel combustion, a fact supported by numerous reports. The dire warning issued earlier this year by the IPCC underlined the urgent necessity of curbing human-induced environmental damage. With our current temperature surpassing pre-industrial levels by over 1.1 degrees Celsius, maintaining our present trajectory risks depleting the remaining carbon budget before the next IPCC report.
The International Energy Agency’s latest scenario for net-zero emissions aligns with these concerns, concluding that new fossil fuel development is untenable. Despite this, countries like the UAE, Saudi Arabia, the USA, Brazil, and Canada have ambitious plans to expand oil production. These expansions carry the potential to cross the 1.5-degree threshold, triggering irreversible and severe climate conditions.
Sultan Al Jaber, in a prominent role as the chief executive of the United Arab Emirates’ state oil company, initially downplayed conflict of interest concerns before COP, suggesting his role would facilitate persuading oil companies to adapt. However, his recent stance opposing fossil fuel phase-out, likening it to regressing to primitive lifestyles – “take the world back to caves”, has deeply unsettled both scientific and public communities. This perspective has been criticised by Climate Analytics’ CEO, Bill Hare, as nearly tantamount to climate denial.
Opponents of climate action often acknowledge the empirical evidence of climate change but argue that implementing significant changes could lead to economic ruin. The President’s recent viewpoint resonates with this perspective, suggesting that discontinuing fossil fuels would impede socioeconomic progress. Nevertheless, the ramifications of surpassing critical climate tipping points could be far more detrimental to development. This rhetoric potentially enables fossil fuel companies to justify increased extraction activities, with recent reports revealing plans by petrostates to escalate coal and overall fossil fuel production significantly. This narrative’s prevalence could undermine commitments to achieving net-zero targets and might have influenced decisions like the UK’s postponement of its net-zero goals.
Common perspectives often frame the issue as a trade-off between economic progress and protecting the environment. However, research indicates that the gradual phase-out of fossil fuels could not only enhance socio-economic growth but also yield substantial environmental benefits. Former British Foreign Secretary, William Hague, remarked that it presents a pivotal opportunity to elevate investment levels and productivity in the British economy.
A comprehensive study conducted by Deloitte and the World Economic Forum projected a staggering $43 trillion potential economic boost globally over the next five decades through a transition to net zero. Despite the President’s apprehensions about divestment from fossil fuels hindering socio-economic growth, a recent report by Business Green indicates that such a shift could uplift 3-4 billion people out of poverty, generate over 380 million jobs, and catalyse advancements across the 17 Sustainable Development Goals (SDGs), addressing various inequalities and climate-related challenges.
Despite earlier contrary comments, Al Nahyan has recently unveiled a $30 billion fund for global climate solutions, with an ambitious target of attracting $250 billion in investments by the decade’s end. Additionally, COP parties have collectively pledged $700 million toward the loss and damage fund. However, bridging the $18 trillion investment gap necessary to implement climate plans will require more strategic collaboration between governments and businesses. This entails adopting a systematic approach to financing, integrating carbon considerations into decision-making processes, and valuing assets accordingly.
Notably, COP28 has also already instigated pivotal changes in the realm of food systems by securing commitments from leaders to minimise their impact on climate change. This agreement entails collaborative efforts among leading food and agriculture organisations to scale up regenerative agriculture, supported by a future investment of USD $ 2.2 billion. Moreover, the conference addressed the urgent need to curb methane emissions, responsible for 25% of global warming today, with a pledge by fifty oil and gas companies to achieve near-zero methane emissions by 2030.
The ongoing debate surrounding the phase-out of fossil fuels intertwines economic progress with environmental preservation. Despite divergent viewpoints, the urgency to address climate change remains indisputable. Scientific consensus emphasises the critical need to avert environmental degradation and surpass climate thresholds. Contrary to concerns, research indicates that transitioning away from fossil fuels not only supports socio-economic growth but also offers substantial environmental benefits. The commitments made so far at COP28 underscore the pivotal moment for collective action, highlighting the potential for inclusive and sustainable development and bridging the investment gap.
Georgina Murrin is a ESG Analyst in Itriom’s London Office.
Itriom is the global impact platform helping leading families shape a better world. Itriom’s platform enables families to refresh and redesign their values, aligns them with the right UN Sustainable Development Goals, combining them in an agreed purpose and a Family Impact Charter. Itriom’s platform supports the development of impact initiatives and whilst providing discrete and secure spaces for peer-to-peer messaging and collaboration. Itriom’s core practices in Leadership, Geostrategy, and Sustainability benefit clients by developing strategies to engage and support the Next Generation in building a lasting legacy of which families can be proud.
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