The United States and the United Arab Emirates unveiled their Partnership for Accelerating Clean Energy (PACE), a strategic collaboration that will allow for the development of 100 gigawatts of renewable energy by 2035. In addition to committing resources to the control of hazardous pollutants like carbon and methane, the two countries pledged at the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) to advance nuclear technology and decarbonize the industrial and transportation sectors. PACE advances the commitment to working closely with allies and partners in order to accelerate a clean energy transition and promote a global climate action plan. The funds will be used to assist developing markets whose clean growth is underfunded and essential to the global climate effort. This announcement comes a few days before world leaders meet in Egypt for the United Nations' COP27 climate summit. The UAE, in its role as a major global oil producer, will host COP28 in 2023.
According to the White House, the new alliance is a huge win for President Biden's climate strategy. “Today President Biden again demonstrated his deep commitment to ensuring a global clean energy future and long-term energy security as the United States and United Arab Emirates announced a robust partnership to ensure the swift and smooth transition toward clean energy and away from unabated fossil fuels,” a White House statement said. According to the White House statement, the two countries will establish an expert panel to determine priority projects, eliminate any barriers, and evaluate PACE's success in its mission to catalyze $100 billion in funding and investment and to deploy globally 100 gigawatts of clean energy.
Sultan Al Jaber, the CEO of the UAE's largest oil company ADNOC and the Gulf nation's special envoy for climate change, stated at a Monday oil conference that while oil remained a crucial component of the nation's energy supply, the UAE was also working to reduce emissions and increase production from renewable or less-polluting sources. The UAE is a major oil exporter, but it has made significant investments in the development of non-fossil fuel energy sources, including the construction of the world's largest single-site solar power plant and the premier nuclear power station in the Arab world.
According to the United Nations, 75% of the world's greenhouse gas emissions are produced by fossil fuels, making them the primary source of climate change. The ambitious plan of the two nations comes at a time of rising demand and dwindling global supply. CEOs of oil and gas companies warned against limiting fossil fuel production for the purpose of preventing climate change at the same conference where PACE was put into effect.
More leaders are stressing the need for revived oil and gas production ahead of what could be a very difficult winter for Europe and other regions of the world facing shortages of these commodities, in contrast to previous years when there were robust calls for increased investment in renewable energy and accelerating the transition away from hydrocarbons, a pillar of the Biden administration's objectives. The cost of oil and natural gas has risen to unprecedented levels over the last year amid supply issues and geopolitical conflict. The goal set at COP26 last year, which the world is on track to miss given current emission patterns, was to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
After a "perfect storm" has rocked the global energy scene, Sultan Al Jaber, CEO of Abu Dhabi National Oil Company (ADNOC), spoke at the Adipec conference on Monday and stressed that energy is everyone's top priority. He blamed the deterioration of the situation on years of inadequate funding for oil and gas production.
Natural depletion would cause an annual loss of 5 million barrels of oil if we stopped investing in hydrocarbons entirely, according to Al Jaber, who emphasized the significance of energy security, adding "this would make the shocks we have experienced this year feel like a minor tremor."
According to the CEO of energy provider Eni, the lack of fuel in Europe is a critical issue. He stated that the world needs both efforts to ensure it has the most energy possible with the fewest environmental repercussions, and that lowering carbon emissions and investing in traditional types of energy are not mutually exclusive.
The amount of money put into renewable energy sources had to be increased in order to reach the targets established by the Paris Agreement.
Several experts, however, have voiced strong opposition to the use of fossil fuels, arguing that global warming is a far more serious concern. In June, UN Secretary-General Antonio Guterres called for a pullback from fossil fuel funding and called any further expenditures in exploration "delusional." However, it appears that global economic forces are not on board with this goal. The United Nations Conference on Trade and Development (UNCTAD) has released a report predicting a drop in international investment in climate change adaptation and mitigation this year.
On Monday, OPEC updated its medium- and long-term projections for petroleum demand, estimating a total investment of $12 trillion to satisfy it. As nations continue to advocate for a transition away from fossil fuels, OPEC's prognosis continues to diverge from that of certain other groups, such as the International Energy Agency, which sees oil demand peaking sometime in the middle of the next decade.