The COP28 Climate Summit which held in Dubai, United Arab Emirates from November 30 to December 13, 2023 approved a first-ever call for the world to transition away from fossil fuels.
It was Sultan Al Jaber, President of COP28, who brought down the gavel on a final agreement – The Global Stocktake – of the UN’s two-week climate conclave, adopted by 198 nations.
Sultan Jaber, whose role as head of the United Arab Emirates’ national oil company raised suspicion among many environmentalists, declared: “You did step up, you showed flexibility, you put common interest ahead of self-interest.”
Describing the deal as bringing “transformational change” on climate, Jaber said of the UAE’s diplomacy: “We have helped restore faith and trust in multilateralism, and we have shown that humanity can come together.”
The document, calling for an ‘orderly’ transition away from fossil fuels, was accepted by all of the world’s major oil producing nations except Iran, which left the Summit early in protest of Israel’s attendance.
For 13 days, delegates at the COP28 Climate Summit were engaged in intense negotiations to hammer out a deal on key agenda items, often disagreeing in the texts references and language. The revised document came after strong pushback from more than 100 nations against an initial draft touted to be soft on fossil fuels.
There were talks, heated debates, disagreements and several sleepless nights before a consensus was reached with European Union Climate Chief Wopke Hoekstra describing the agreement as “long, long overdue”, saying it had taken nearly 30 years of climate meetings to “arrive at the beginning of the end of fossil fuels”.
The agreement calls for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner”, a language that brought onboard countries from islands that fear extinction from rising sea levels, on one hand, and oil giant Saudi Arabia, which led the charge by some oil producing countries, that wanted to keep exporting their petroleum, on the other.
The document also calls for expanding action “in this critical decade” and recommits to zero net greenhouse gas emissions by 2050 in hopes of meeting the increasingly elusive goal of checking warming at 1.5 degrees (2.7 Fahrenheit) above pre-industrial levels.
COP28 President continued with superlatives, saying, “We have delivered a comprehensive response to the Global Stocktake and set the world on the right direction.”
He called the agreement, “a robust action plan…led by science” and a “historic package to accelerate climate action…We have delivered a paradigm shift that has the potential to redefine our economies,” he continued. “We have integrated the real economy into climate action.”
Brazil, which will lead the climate talks in 2025 in the Amazon, said that wealthy nations must now deliver on another key climate pledge — providing assistance to worst-hit developing nations.
For environmentalists, the Global Stocktake document directly addresses what they fondly called “the elephant in the room,” at COP28. The Dubai Summit may be remembered as the most significant COP since the Paris Agreement in 2015. However, its global goal setting will have effect only insofar as countries follow through with effective national plans. In early 2025, countries are to deliver new NDCs and have new specific targets to triple renewables and double energy efficiency by 2030, as well as begin to introduce new financial architecture by recognizing the role of credit rating agencies among other things.
More focus on finance is expected next year at COP29 in Azerbaijan, while countries will bring their revised NDCs to COP30 in Brazil, in 2025.
As we peer into the mouth of a new era, I am quick to admit that there are still large gaps that need to be bridged. Now is the time for maximum ambition and maximum flexibility. It is time to go into overdrive in good faith and rise to the challenge set by COP28.
What this development means is that countries whose economy is dependent on fossil fuels must consider diversification for their economy to stay vibrant. Failure to do so exposes them to the risk of reduced investment and a shrinking market for their fossil products.
Many African countries including Nigeria fall into this group and could see less money coming in from oil in the future. This is bound to intensely affect many of the continent’s economies already caught in the web of heavy debt and dwindling revenue.
Before and during COP28 Dubai Summit, some African countries had argued that they have the right to harness their natural resources and progress, just like wealthier nations. While the Summit outcome may not fully meet the aspirations of these nations pushing for the continued exploitation of fossil fuel – comprising coal, traditional biomass, oil, and gas – it’s pertinent to accept the fact that the shift away from oil and gas, the foundational fuels that have driven the global economy for decades and contributed heavily to the earth’s rapidly changing climate, is a timely, necessary development. Certainly, shifting away from all fossil fuels is expected to bring about a paradigm shift capable of reshaping global economies.
Going by the COP28 consensus agreement, Nigeria has 27 years to fully tap into its oil and gas sector.
However, transformation won’t happen overnight as figures from OPEC suggest that oil demand will grow to 116 million barrels per day (bpd) by 2045 from 102 million bpd today. By contrast, the International Energy Agency, which represents industrialised energy consumers, sees oil demand declining to 93 million bpd by 2030 and 55 million bpd by 2050.
Nigeria presently relies significantly on its oil and gas sector, constituting a bulwark of its economy. However, following the outcome of the Dubai Summit, the nation ought to actively consider accelerating its gas-driven economic model with a view of shifting towards renewable energy by 2050.
With global deadline set at 2050, Nigeria is indeed facing a race against time to achieve carbon neutrality as the country’s energy transition plan initiated in 2022 during the Buhari administration, sets a 2060 target. This plan aims to address emissions in various sectors, including power, cooking, oil and gas, transport and industry. Now, there is a need to expedite the implementation of the Energy Transition Plan (ETP) to align with the agreed-upon global deadline for integrating clean energy.
The Buhari administration introduced the Decade of Gas Initiative and the Nigeria Gas Expansion Program (NGEP) as pivotal steps toward this transition. It is crucial to note that both initiatives are not yet operating at full capacity. Few months ago, the Tinubu administration endorsed Compressed Natural Gas (CNG) as a viable alternative to petrol following the subsidy removal. The CNG project is yet to become operational, however. As it seems, Nigeria has a span of 27 years to restructure its economy from its current dependence on oil and gas. But along that period, the country is required to gradually phase out all fossil fuels on a timeframe consistent with the 1.5 degree limit – and to accelerate a just, equitable and orderly energy transition.
However, questions arise regarding existing investments in the oil and gas sector in which billions of dollars are involved and committed. Even though, Nigeria is committed to the global decarbonization agenda as President Bola Tinubu said in his COP28 speech, given this scenario, I strongly feel that Nigeria should not overtly jettison fossil fuels, especially considering the country’s reliance on these resources for economic sustenance. To safeguard investments, a gradual scaling down of oil and gas utilization done alongside a swift adoption of renewables and massive afforestation programme will suffice in significantly mitigating greenhouse gas emissions. Also, this is mindful of the fact that the Global Stocktake recognizes the need to “a transition that takes into account the principle of common but differentiated responsibilities and respective capabilities, in light of national circumstances – not to reduce ambition but to combine ambition and equity.” Now, if investors approach Nigeria’s gas industry with a long-term perspective, the country should simply adapt a midstream business strategy that will align with the COP28 directives.
Transitioning to cleaner energy sources is bound to present some daunting challenges for Nigeria. It will face risks to its human capital, anticipating job losses, necessitating workforce retraining for a shift to the renewable energy sector and encounter a revenue decline, potentially amplifying economic volatility. In this regard, the federal government must ensure support, training, and social protection for those who may be negatively impacted by the climate measures. Additionally, without proper diversification – a far-off reality 27 years before the deadline – Nigeria might undergo social disruptions and economic crisis.