Ahead of Cop28, the US is looking to countries to “get serious” about the energy transition.
Speaking to The National, Amos Hochstein, special presidential co-ordinator for global infrastructure and energy security, said: “The world has to get serious about accelerating the energy transition”.
He defended his own country’s positions, saying that the US will come to Cop28 to prove the steps it has taken to support the energy transition.
He said the US was coming into the summit, which begins in Dubai on November 30, with “President Joe Biden being able to talk about the implementation of the Inflation Reduction Act and the Chips Act”, which has allowed for additional investment in renewable and clean energy “and in the entirety of the supply chain”.
Mr Hochstein stressed the importance of these measures as “it shows that when government takes action, we can accelerate the investment rate”.
The US is urging other countries to take similar steps in terms of legislation and investment.
The country will push for several outcomes during Cop28 that can allow for the target of a maximum of 1.5C rise in temperatures above pre-industrial levels to stay in reach.
Mr Hochstein said that there would be an expectation that oil companies come with tangible plans.
“The fossil fuel industry needs to come to the table in a real and serious way to show that they will spend significant resources towards decarbonising their efforts and investing in cleaner energy,” he said.
“These measures would need to include a reduction in methane emissions and leakage and it means that they have to take real action”.
Green energy sources – in pictures
The other element that the US would be pressing for is that all countries take on the responsibility of the energy transition into cleaner energy sources.
Mr Hochstein said that “the world has to come together to make sure that energy transition is not only in rich countries but that it is equally done across the board”.
He lamented that the percentage of dollars going into clean energy in the non-OECD, developing and middle-income countries was going down and not up.
He warned that if investment in clean energy does not go up “we will not improve the climate change effects that we are seeing, we will not slow down the warming of our planet. And we will create more injustice between the haves and have notes”.
In describing what success would look like coming out of Cop28, Mr Hochstein said: “Success here is around replicating the American example, the UAE example, the Saudi example, of investing and spending real money” in the energy transition.
This will mean further concessional lending and to lower cost of capital for developing and middle-income countries.
The US official said that this will have to be a comprehensive effort from countries, multilateral development banks, sovereign wealth funds, philanthropy and private companies.
That transition is being championed by Cop28 President-designate and Minister of Industry and Advanced Technology, Dr Sultan Al Jaber who has worked across all these areas to ensure delivery at the UN climate conference.
Mr Hochstein expressed his appreciation for Dr Al Jaber’s role, saying: “He’s done a very good job”. However, he added: “The hardest part of the Cop is at the end”, about the negotiations beginning in earnest during Cop28.
Mr Hochstein spoke of the importance of the inclusivity of Cop28, which will have oil and gas companies participating along with a full range of actors.
“What we need is to convene everybody and to get the fossil fuel industry to understand where the world is going,” he said.
“And to recognise that and to be part of it, and to understand that the world is changing, and they need to change with it.”
As for the criticism from some climate activists about Dr Sultan also being chief executive of Adnoc, Mr Hochstein said: “People talk about him as the chief executive of Adnoc but I’ve known Dr Sultan before he was at Adnoc, when he was the founder of [green energy company] Masdar, and I worked with him on creating the clean energy powerhouse that Masdar is.”
Mr Hochstein also said he worked with Dr Al Jaber over a decade ago, to bring the UN International Renewable Energy Agency (Irena) to Abu Dhabi.
He said: “I know that [Dr Al Jaber] has been committed to clean energy” and the fact he is coming to the table as the head of Adnoc means he understands what is needed.
The US official went on to say that Dr Al Jaber’s “job at this Cop is not easy”.
“He has to bring together the clean-energy advocates and the fossil fuels and you need someone who both sides can trust or understands both sides and bring them together,” he said.
“Now the job is going to be for everybody to step up”.
57%20Seconds
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Rusty%20Cundieff%0D%3Cbr%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EJosh%20Hutcherson%2C%20Morgan%20Freeman%2C%20Greg%20Germann%2C%20Lovie%20Simone%0D%3Cbr%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E2%2F5%0D%3Cbr%3E%0D%3Cbr%3E%3C%2Fp%3E%0A
The biog
From: Upper Egypt
Age: 78
Family: a daughter in Egypt; a son in Dubai and his wife, Nabila
Favourite Abu Dhabi activity: walking near to Emirates Palace
Favourite building in Abu Dhabi: Emirates Palace
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.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Tributes from the UAE's personal finance community
• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style
“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.
Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term.
From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”
• Sam Instone, director of financial advisory firm AES International
"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed. Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."
• Demos Kyprianou, a board member of SimplyFI.org
"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."
• Steve Cronin, founder of DeadSimpleSaving.com
"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.
His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.
Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."
• Zach Holz, who blogs about financial independence at The Happiest Teacher
"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen. He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”
• Tuan Phan, a board member of SimplyFI.org
"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."
Young women have more “financial grit”, but fall behind on investing
In an October survey of young adults aged 16 to 25, Charles Schwab found young women are more driven to reach financial independence than young men (67 per cent versus. 58 per cent). They are more likely to take on extra work to make ends meet and see more value than men in creating a plan to achieve their financial goals. Yet, despite all these good ‘first’ measures, they are investing and saving less than young men – falling early into the financial gender gap.
While the women surveyed report spending 36 per cent less than men, they have far less savings than men ($1,267 versus $2,000) – a nearly 60 per cent difference.
In addition, twice as many young men as women say they would invest spare cash, and almost twice as many young men as women report having investment accounts (though most young adults do not invest at all).
“Despite their good intentions, young women start to fall behind their male counterparts in savings and investing early on in life,” said Carrie Schwab-Pomerantz, senior vice president, Charles Schwab. “They start off showing a strong financial planning mindset, but there is still room for further education when it comes to managing their day-to-day finances.”
Ms Schwab-Pomerantz says parents should be conveying the same messages to boys and girls about money, but should tailor those conversations based on the individual and gender.
"Our study shows that while boys are spending more than girls, they also are saving more. Have open and honest conversations with your daughters about the wage and savings gap," she said. "Teach kids about the importance of investing – especially girls, who as we see in this study, aren’t investing as much. Part of being financially prepared is learning to make the most of your money, and that means investing early and consistently."
