The 28th Session of the United Nations’ Conference of the Parties always had the potential to veer off course. Basing the world’s premier forum for tackling climate change in one of its biggest oil producer states, and including huge emitters like Exxon Mobil XOM.N, raises the risk that incumbents defend their turf and impede genuine progress on decarbonisation. Yet as the Dubai shindig heads to a conclusion, there are reasons why climate experts are not yet tearing their hair out.
Two years ago, at Glasgow’s COP26, oil bosses were not on the invite list. At COP28, they are so visible that the event has become a live test of the merits of having climate change sinners inside the tent. Attending the conference for the first time, Exxon boss Darren Woods asserted that the event focused too much on zero-carbon renewable energy and not enough on lower-carbon molecules like hydrogen and biofuels. More strikingly, COP President Sultan al-Jaber, whose day job is boss of the Abu Dhabi National Oil Company, was seen in pre-event footage to assert that there was “no science” behind the need to phase out fossil fuels.
That all sounds pretty alarming. Yet there’s a reason why climate negotiators have not decamped en masse to drown their sorrows at Goals House, the flashy Dubai venue at which the likes of UK Foreign Secretary David Cameron and British opposition leader Keir Starmer have been spied. That’s because the exact nature of the fossil-fuel reductions needed to avoid catastrophic climate change is more nuanced than it might seem. And the scope for the final text to progress the path to net zero is greater than it looks.
Ever since a key global pledge to “phase out” coal was watered down to “phase down” at the end of COP26 – leaving President Alok Sharma fighting back tears – climate-watchers have fixated on these semantics. Yet while massive reductions in coal, oil and natural gas use are key to net zero, the deadline for doing them – and the extent to which technologies to capture emitted carbon are incorporated – is fuzzier. A much-cited International Energy Agency scenario that sees global warming limited to 1.5 degrees Celsius requires world oil demand to drop 75% by 2050. But that still implies around 25 million barrels of daily consumption. The IEA assumes that three-quarters of that is used to make stuff like petrochemicals, which have lower emissions as they aren’t burned by their end-users.
Senior climate experts interviewed by Reuters Breakingviews on the sidelines in Dubai were sanguine about a substantial oil phase-down by 2050, rather than a total phase-out. That doesn’t mean they were impressed by al-Jaber’s pre-event tone. The problem with having a significantly lower but still-meaningful level of oil and gas in the mix by 2050 is that it gives industry bosses like Woods – and indeed the ADNOC boss himself – an excuse to assume they will be the last driller standing. That decreases the urgency to transition to lower-carbon energy. And at the very least, it’s jarring to hear the head of the world’s most important climate negotiation advance what sound like oil major talking points.
Still, the inclusion even of “phase down” language for oil and gas in the final conference text would be a first. And the COP28 draft agreement, now currently the subject of intense negotiations, contains a separate cause for optimism. Al-Jaber wants it to include a collective global decision to increase renewable energy capacity threefold by 2030, and double energy efficiency. Because more efficient technologies like heat pumps and electric vehicles not only avoid fossil fuels but also require less energy to run, the upshot is a big reduction in the need for oil. The IEA reckons these two goals are key drivers of the 25% fall in fossil fuel demand by 2030 assumed by its scenario that limits warming to 1.5 degrees.
If the renewables pledge makes it into the final Dubai agreement, the experiment of welcoming oil majors into the COP28 tent may not prove an own goal. Exxon and its oil peers never seemed likely to set binding plans to decarbonise their customer as well as production emissions by 2050, despite these “net zero pathways” being all the rage at COP26. But Woods may still end up being one of the more high-profile participants amid a COP28 agreement that implies a major, rapid reduction in demand for his product. On that reading, oil bosses’ motivation in heading to Dubai might well have been also about drumming up interest in lower-carbon products where they need to grow, rather than a sole desire to undermine meaningful action on oil.
It’s still perfectly possible that COP28 proves an abject failure. Al-Jaber and the other negotiators may cave to pressure from big oil producers like Saudi Arabia and fail to include any commitment at all to either phase out or phase down oil and gas. And even if they manage to insert targets for trebling renewables by 2030, governments and companies will still need to make good on those pledges. Still, there’s a way for the UAE’s COP to surprise on the upside, rather than just the downside.
Source: Reuters (Editing by Neil Unmack and Streisand Neto)