CoP-28 is turning into a trade show and it is not necessarily a bad thing

The epic scale of CoP-28 may be too much of a good thing because trade shows thrive on intimacy as much as scale. (AP)
The epic scale of CoP-28 may be too much of a good thing because trade shows thrive on intimacy as much as scale. (AP)

Summary

  • For a long time, global capital under-estimated both the threat and opportunity of an energy transition, but business self-interest is finally converging with what’s best for the planet.

There’s a common lament across the halls of Expo City Dubai, the 1,000-acre venue of CoP-28, the climate huddle: This event feels more like a slick trade show than an environmental summit.

About 100,000 attendees—nearly three times the number who attended CoP-26 in Glasgow—are milling through the venue. Fossil fuel companies have more than 2,000 representatives in attendance, including Sultan Al Jaber, president of the conference and the chief executive officer of the Abu Dhabi National Oil Company, the UAE’s state-owned petroleum business. Lavish provision of food, drink, events and golf buggies to ferry delegates around the vast site make it feel as much like an industry conference in Las Vegas as a sobering reckoning with environmental catastrophe.

Climate activism, meet capitalism. You two should get to know each other better: Since the industrial revolution, our civilization has been built around fossil fuels. Fixing the resultant emissions is like digging out the foundations of the global economy and resetting them on a new, cleaner footing. It’s a stroke of luck that we now have most of the technologies needed to achieve this objective at a lower cost than the carbon-intensive alternative. Building that new economy will need one of the biggest splurges of peace-time investment the world has ever seen.

Just how big? The world spends approximately $2 trillion a year on its energy systems, around the annual gross domestic product of France. Only in the past few years has clean power started to overtake fossil fuels to take the majority share of that budget, but things still need to accelerate.

Clean energy investment in 2030 must be roughly double the $1.7 trillion spent this year for the world to meet governments’ existing commitments, according to the International Energy Agency. That rises to about $4.5 trillion to put the world on a sure path to zero emissions.

Renewable capacity worldwide is already sufficient to power China, the US and Europe at peak output, but leaders of the Group of 20 major economies have promised to triple it by 2030. All those wind turbines, solar panels and transmission lines are not cheap—and the funds aren’t going to be mobilized by peer-reviewed studies or protest placards.

For too long, global capital has under-estimated both the threat and the opportunity of the energy transition. It’s no bad thing that it’s waking up to both sides of the equation.

The recent surge in fossil fuel prices and crisis in the offshore wind industry gave carbon producers some of their confidence back in 2023. Current ebullience looks like turning into the hubris that has long plagued the sector whenever the investment cycle peaks. On a 10-year timeframe, renewable power companies still do a better job of covering their costs of capital than petroleum businesses and fossil-powered utilities.

In that sense, the number of corporate types turning up at climate conferences should be taken as a positive, rather than a negative indicator. Global commerce has long structured itself around trade fairs, expos and conferences that commonly host 10,000 people at a time. Where the suits lead, money follows.

Visitors to the 500-desk media centre in Dubai, one of the biggest pavilions at CoP-28, could be forgiven for thinking otherwise, but the $1.7 trillion emerging clean-energy economy remains woefully under-explored, compared to the coverage we lavish on a stagnating petroleum industry that invests less than half that amount. This imbalance will only grow as news media lays off climate reporters.

The epic scale of CoP-28 may be too much of a good thing. Trade shows thrive on intimacy as much as scale. Dealmaking is fuelled by the opportunity for in-person meetings, which is made a lot harder when getting to the far side of the venue resembles crossing the concourse of New York City’s Grand Central Station 10 times in rush hour.

The green economy already has its own industry events, too. So it’s certainly true that spreading some of the load back to those conferences would give diplomats at the United Nations Framework Convention on Climate Change more breathing space to do their own important work.

Still, from the dawn of industrial capitalism, we’ve recognized that altruistic ends are often achieved through unedifying greed. It’s not, as Adam Smith wrote, “from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest." If big businesses are finally recognizing that their self-interest converges with that of the planet, then that’s not a bad thing. ©bloomberg

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