Every COP event ends with a cocktail of ‘relief, exhaustion and bafflement’, as the Financial Times put it. Yet while compromises and controversies were inevitable, the importance of more MENA-centric COPs cannot be underestimated.
Another COP ends, and with it comes the usual mix of moves forward, pushbacks, and criticism. Yet from a MENA (Middle East and North Africa) perspective, where the last two COP events were held – in Egypt and the United Arab Emirates (UAE) respectively – a cause for optimism can be found.
We recognise the urgency, we recognise what needs to be done, but the ‘how’ has always been missing – the money.
One of the more noteworthy results at Dubai came very early on with the establishment of the Loss and Damage Fund, initially proposed at COP27. This looked to redress some of the balance from developing countries around the irreversible losses and damages caused by climate change, though many noted that the total pledge, of just over $700 million (£556m), falls well short of what is needed. Combine this with the Guidebook for Just Financing, published at Sharm El Sheikh last year, and a framework exists for vulnerable nations.
“I think the difficulty has always been that yes, we recognise the urgency, we recognise what needs to be done, but the ‘how’ has always been missing – the money,” Luma Saqqaf, CEO at UAE-based Ajyal Sustainability Consulting tells Sustainable Future News. “I also think you can’t ignore what you started, if you like, at COP27.
“I always say the importance of COP27 was the fact that it announced the Loss and Damage Fund and the importance of that, in a way, [in] telling developing countries that [their] voices are heard,” adds Saqqaf. “And I think that in itself can bring them to be able to move forward with everyone else: that recognition that ‘we hear you and we hear your problems.’”
What was the impact of a second consecutive COP event in the MENA region? “Having these two events happening right after each other could not have been better for the region from a climate perspective,” says Saqqaf. “Before COP27, I don’t think we had reached the level of even discussing it as a topic. Whereas having 27 and then 28 here, everybody at every possible level of the community has heard of this, and obviously companies have had to start doing something.”
The UAE government issued a Net Zero by 2050 strategic initiative earlier this year, making it the first MENA nation to align itself to the Paris Agreement. For Saqqaf, who has been a UAE resident for 27 years, this pledge should be taken seriously by the rest of the world. “I have seen it when the government makes a commitment to something – they just forge ahead and everyone follows in a positive way,” she says. “So when the government says we are going to reach net zero by 2050, we know that we are going to get there, so we had better start working on it.”
Saqqaf had several speaking engagements at COP28, ranging from sustainability leadership in Dubai to investment in the non-oil sector. For ITFC (International Islamic Trade Finance Corporation), the topic was carbon markets, with COP28 seeing the Dubai Financial Market (DFM) organising a pilot for trading carbon credits.
At a high level, a proposed deal for a central system for countries and companies to trade their carbon offsets was rejected at the conference. But from an Islamic finance point of view, the foundation is starting to take shape, albeit with plenty of hard work to come.
“I think the thread in all of the [speaking sessions], interestingly, is the readiness of corporates,” explains Saqqaf. “But the other side of the coin are the borrowers. Are the recipients of these funds ready? That is where we need to work much harder. We need to work a lot harder because in order to be ready to receive the money, in order to be ready to even use carbon credits, even if they’re available and everything is fine, we need a base to calculate emissions.
“Then you move to the next level of financing,” adds Saqqaf. “If companies are going to borrow green, then they must have a green project, and if you want to have a green project, you need to have a green strategy.
Of course we all know the [Verra] scandal, and people generally here are very wary about that, and they do not want to be labelled as greenwashing.
“Are we there yet? Not so much. Money is starting to float, which is a great thing, but we need to see the shift from the corporate side, we need to see the shift in regulations, more maturity on the company side, and planning how they’re going to transition.”
At the start of this year, The Guardian reported that at least 90% of Verra’s rainforest carbon credits did not represent real emission reductions. Trust is a major issue for carbon credits – and one MENA is not looking to replicate.
“We’re not going to see verifications using any standards other than international standards,” says Saqqaf. “Of course we all know the [Verra] scandal, and people generally here are very wary about that, and they do not want to be labelled as greenwashing. If you listen to [Riham ElGizy], the CEO of RVCMC, the Saudi voluntary carbon markets, transparency and credibility is a top priority.”
So how to assess the success of COP28 from a MENA perspective? One other noteworthy deal, issued very early on at COP28, was the signing of a net zero 2050 agreement from 50 oil and gas producers, 30 of whom were national oil companies, including Saudi Aramco. While it is easy to question the value of such agreements, Saqqaf argues that ‘committing to something, whatever that something [is], is better than not committing to anything.’
The private sector was there big time, oil companies were there big time, governments were there putting money, banks will come to put money.
“Climate is something that requires a lot of collaboration, and I don’t think it’s wise to have someone outside the room and they can do whatever they want,” concludes Saqqaf. “It’s better to bring them in and get them to commit to something, than leave them out to do whatever they want.
“From that perspective, the private sector was there big time, oil companies were there big time, governments were there putting money, banks will come to put money. It can’t be more successful than this I guess.”
