Let’s make it a fair and just transition

The deal penned at the last minute in Dubai during the UN climate change summit for the world to start moving away from fossil fuels was an important albeit less ambitious step. 

There was more than a hint of irony in the fact that COP28 was held in the United Arab Emirates, a country that built its wealth on oil and gas. But despite the idiosyncrasy of having a climate change summit chaired by the head of the UAE’s state oil company, the end result may have been the most practical way forward. 

COP28 was always going to be a moment of reckoning as nations who built their wealth on fossil fuels squared off with others that stand to lose most from global warming. In between stood developed nations that maintain their high standard of living on energy hungry households and developing countries whose thirst for progress depends on the availability of more cheap energy. 

Making the transition away from fossil fuels will need to balance the at times competing interests of these countries. Going green will need major oil producers like the UAE and Saudi Arabia to be on board just as the US, the EU, China and India. 

The final wording of the COP28 conclusions may not be as ambitious as some would have wanted it to be. It speaks of a commitment to transition away from fossil fuels not to phase them out. 

US special envoy John Kerry called it a “historic” moment and a “huge achievement”. Although he did add that “many, many people” would have used different words. 

The US and the EU were among the nations and groups that wanted the deal to "phase out fossil fuels". 

At the end of marathon talks the best possible compromise was found to get as many countries behind an ideal, which until now seemed impossible to achieve. 

For the first-time countries have made a commitment to start reducing their dependence on fossil fuels. The end game is still far away but the starting line has been drawn. 

But now, the next step is to make the deal happen and as experience has proven this is the hardest part to achieve. 

Transitioning away from fossil fuels will require an equally important commitment to make sure the shift happens in a socially and economically just way. Disproportionate burdens, whether these concern countries, individuals or communities must be avoided or mitigated where these are inevitable. 

The world needs to see more and sustained investment in renewable energy sources, especially wind and solar. 

The production of large scale batteries to overcome the intermittency of wind and solar power needs to ramp up. But more investment is required in research to develop batteries that are more efficient and less dependent on rare earths to produce. 

There needs to be more investment in safer nuclear plants to act as a backbone of stability. More investment is required in developing international energy grids that are reliable and secure. 

Investment in research and development of green hydrogen is also a must.  Hydrogen is one of the cleanest fuel alternatives if produced in an environmentally sustainable way and producing it in commercially viable quantities will also enable countries to use existing gas infrastructure to transport it to power plants. 

It is obvious that the transition won’t come cheap but countries must now put their money where their mouth is. 

Private investment must be encouraged through State support mechanisms that help lower the financial risks. 

On the back of public guarantees that green projects will find a policy framework that supports them, the banks must also play their part by providing advantageous loans to private and public investors. 

Within this context, the EU must adopt a more flexible approach to its spending rules. The otherwise restrictive mechanisms to limit and condition State aid must be relaxed to allow greater public investment into the green transition. 

Any attempts to claw back public spending on green projects should be resisted over the next decade. 

This will determine whether what was agreed at COP28 will succeed or fail because the impact of change will not be small and it risks leaving people, communities and countries struggling to cope. 

Unless the green transition is socially and economically just, it will fail. It is inevitable that for small island states, economies on the periphery, and under developed nations the transition will be harder and possibly more expensive. 

If going green means job losses, social exclusion and financial hardship for families and SMEs there will inevitably be pushback. 

This is why the richer countries and the richest in society must shoulder the heavier burden. 

The future of our planet is at stake and getting the transition right is imperative. But it should be a fair transition that keeps in mind the needs and aspirations of today’s people as much as those of future generations; and the specificities of small countries and those still developing.