The amalgamation of energy security and the energy transition is an important one to watch out for in the 21st century. One does not trump the other in what will be the toughest balancing act of our generation.
Finance is a cornerstone of achieving this non-negotiable equilibrium and it is fast becoming clear that many roads can lead us to a united destination of net zero by 2050. But have no doubt: the world has only just taken its initial financial steps in this climate marathon.
However, financiers are key in the energy-climate paradigm. Upstream investments in oil and gas must be at near pre-coronavirus levels of $525 billion until 2030 to support energy security, according to the International Energy Agency.
This remains true despite peak oil forecasts creeping closer. The next two years are critical for sanctioning and allocating capital towards new oil and gas projects to ensure adequate supply comes online by 2027, the International Energy Forum says.
Simultaneously, the world must more than triple clean energy investments by 2030, to about $4 trillion, to meet net-zero ambitions by 2050, the IEA says. Efforts are under way globally, including $130tn of private capital allocated by the newly established Glasgow Financial Alliance for net zero. But there is still a long way to go.
Turning this tide will take an enormous effort, considering that energy consumption accounts for 76 per cent of the world’s human-caused greenhouse gas emissions, according to the World Resources Institute. And this is far from a recent trend; it is deeply established in our economic and societal norms.
For one, carbon emissions from energy and industry have climbed 60 per cent since the UN’s Framework Convention on Climate Change was signed 30 years ago. Looking ahead, the current planned fossil fuel production by 2030 is twice the maximum production consistent with the 1.5˚C limit above pre-industrial levels, according to the World Economic Forum.
Clearly, we face an extraordinary balancing act. Think of financiers as one of the strongest threads in the rope that we must use to climb out of the deep, dark climate hole we have dug for decades.
Still, therein lies an entirely new landscape for financiers, both those established in energy markets and those new to the energy sphere.
On one hand, the historically linear and dominating fossil fuel market has become far more complex with increasingly diverse, greener energy basket. Equally, therein lies a great opportunity for financiers to enter new, largely untapped markets and capture a first-mover advantage.
But financiers also need help, especially from governments. They need the reassurance of regulatory clarity, which governments in the GCC are increasingly providing. Overall, the clearer countries’ energy-environmental policies are, the faster investors can figure out the commercial viability of projects.
Having spearheaded the global oil and gas market for decades, producers in the Middle East now have to work harder than ever. The region is being asked to play a big role in sustaining energy security – “please keep the lights on and our cars running with fossil fuels” – while also investing heavily in green energy projects and significantly cutting its carbon footprint. To a large extent, the region is now a key orchestrator of energy transition.
The Middle East has a golden opportunity to set an example for the rest of the world in how to manage an even-keeled transition without compromising its energy security. If the region succeeds, the reputational win will be enormous.
Meaningful efforts are already under way. Individual announcements to support clean energy by Saudi Arabia and the UAE – Opec’s linchpin and its third-largest producer, respectively – totalled a staggering $264bn at the end of 2021.
The energy security and energy transition camps make each other’s lives more complex but they do not threaten one another. They are allies who are still pinning down areas of common ground.
But as the decade rolls on, real threats will be amplified, including water scarcity, cyber threats and the availability of critical minerals to build renewable energy projects.
These areas will increasingly need our attention, so we must remain focused and united. Ultimately, we are all looking at the same energy-climate quandary, only through very different lenses. Each country, each company and each investor will find different solutions – a diversity that financiers must embrace in 2022 and beyond.
Badar Chaudhry is senior vice president for the energy sector at Mashreq Bank
UAE currency: the story behind the money in your pockets
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The biog
Name: Abeer Al Shahi
Emirate: Sharjah – Khor Fakkan
Education: Master’s degree in special education, preparing for a PhD in philosophy.
Favourite activities: Bungee jumping
Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
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The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
How Filipinos in the UAE invest
A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.
Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).
Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.
Petrarch: Everywhere a Wanderer
Christopher Celenza,
Reaktion Books
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