The COP28 conference in the UAE and its unsustainable investment crisis
The international campaign to boycott the COP28 Conference of the Parties, scheduled to take place in the UAE, highlighted doubts about the ethics of financing the conference and analysed its unsustainable investments.
The UAE will host the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) in November 2023.
As part of its preparations, the UAE has committed to “promoting” ethical finance and sustainable investments. However, the facts on the ground show otherwise.
The International Campaign said that ethical finance involves applying ethical principles to financial decision-making. It involves considering the social, environmental and governance impact of economic decisions, investments, and financial returns.
In COP28, ethical finance involves incorporating ethical and social factors into financial decision-making related to climate change. This includes endorsing financial instruments facilitating the transition towards a low-carbon economy, investing in renewable energy and clean technologies, and supporting sustainable infrastructure development.
The goal is to limit the global temperature increase to 1.5°C (2.7°F), which would require reducing greenhouse gas emissions by 50% by 2030 and achieving net carbon dioxide emissions by mid-century.
However, there are concerns that the UAE’s investments, particularly in the oil and gas sector, are unsustainable and may undermine its commitments to addressing climate change. The following is an analysis of the ethical financing of the UAE and its unsustainable investments:
Unsustainable investments in the UAE:
UAE investments in the oil and gas sector remain a significant concern. The country is one of the largest oil producers in the world and relies heavily on fossil fuels for its economy.
According to the International Energy Agency (IEA), oil production in the UAE is expected to increase by 25% by 2030, which may conflict with the goals of the Paris Agreement to limit global warming to less than 2 degrees Celsius.
Here are some of the unsustainable investments made by the UAE that have made our planet more vulnerable to global warming and millions of species on the brink of extinction:
Dubai’s Palm Island developer secures $4.6 billion in financing for upcoming waterfront projects. (Scientists have already concluded that the UAE’s investment in artificial islands puts pressure on the environment.)
ADNOC has secured more than $64.5 billion in investments since 2016 and has generated profits from the assets through pipeline transactions and four-unit IPOs.
ADNOC Gas, a subsidiary of Abu Dhabi’s Primary Energy Company, had seen a significant boom in trading following its successful initial public offering (IPO) that raised $2.5 billion. The IPO is the largest of its kind worldwide in 2023.
As reported by Arabian Business, the UAE aims to get $123 billion annually from the tourism industry by 2031. The Gulf country expects to receive a total investment of $40 billion for its numerous tourism projects shortly. (Tourism contributes greatly to global warming because nearly half of all carbon dioxide emissions are produced during travel.)
Moreover, the UAE’s investments in renewable energy are relatively low compared to those in the oil and gas sector. As a result, while the country has progressed in developing renewable energy sources, such as solar and wind power, its renewable energy capacity is still tiny compared to its overall energy mix.
And while the UAE has taken some steps towards promoting ethical financing and sustainable investments, its heavy reliance on oil and gas remains a major obstacle to achieving its climate goals.
Abu Dhabi needs to significantly increase its investment in renewable energy and reduce its reliance on fossil fuels to align with the goals of the Paris Agreement.
Hosting COP28 allows the UAE to demonstrate its commitment to climate action. Whether the country will take more significant steps to transition towards a sustainable future remains to be seen.
