What’s happened?

Dubai began hosting the 12‑day UN COP28 climate summit on November 30th and announced a US$30bn financing package for global climate‑change solutions. Emirati leaders hope that the meetings—attended by a large number of international leaders—will enhance the country’s global status and boost its ambitions to transform itself from a major hydrocarbons producer to a regional power able to shape climate policy and finance in a way that reaps diplomatic and commercial gains for the nation.

Why does it matter?

The UAE’s hosting rights will require it to guide attendees towards climate and sustainability commitments, but many governments are reluctant to agree to measures that might harm their short‑term economic prospects and goals agreed are unlikely to be ambitious. The UAE will also focus on advancing its own priorities: to promote renewables and other low‑carbon projects where it can leverage its expertise and to enable developing countries to access funding for these projects, many of them to be realised by UAE firms. The Emirati authorities have said that they hope the new fund will stimulate investment totalling US$250bn by 20230 in climate solutions. 

The UAE has built a sizeable domestic renewable energy sector, and firms such as state‑owned Abu Dhabi Future Energy Company (Masdar) have more recently expanded their presence abroad and invested heavily in clean‑energy capacity in Africa. The UAE has initiated financing programmes for such projects in Africa—where the cost of climate‑mitigation and adaptation needs far outweighs inflows—and will push developed economies to make similar commitments.

However, the UAE has faced criticism about potential conflicts of interest as a major fossil‑fuel producer staging climate talks, particularly as Sultan Ahmed al‑Jaber, the head of the state oil firm, Abu Dhabi National Oil Company, also leads COP28. Recent media reports claimed that the Emirati authorities planned to use meetings with overseas governments attending the summit to promote oil and gas deals to them, although the UAE has firmly denied this. However, the Emirati authorities will leverage the summit to win deals for state firms, with the private sector to play a role in supporting international projects with a sustainability focus. The UAE has increasingly looked to leverage hydrocarbons resources in gearing its economy and outward investment towards sustainable energy, including renewables, carbon‑capture targets in hydrocarbons production and developing hydrogen export markets.

What next?

We do not anticipate a major breakthrough in climate policy. However, the UAE will still receive considerable commercial and diplomatic benefits. The country will maintain its net‑zero 2050 targets, fleshing out more projects to reach that goal domestically and accelerating overseas investment and financing initiatives in this area too.

The analysis and forecasts featured in this piece can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.