The great fossil fuel debate: As COP28 nears, topics of a fossil fuel phasedown and emission cuts remain a debatable issue, with OPEC raising the big question: Should governments opt to limit oil demand to slash emissions instead of obliging producers to curb supply? The topic of having a fossil fuel phasedown itself has been contentious, with several major fossil fuel producing nations repeatedly blocking efforts to reach consensus on a phasedown to curb the impacts of climate change.

In this second part of our conversation, we speak with Mahmoud Mohieldin — Egypt’s UN high-level climate champion at COP27, a special envoy for the UN secretary-general, and an executive director at the IMF — to discuss the fossil fuel phase out debate and what can be expected from COP28.

Did you miss part one of the conversation? Tap or click here to read it.

Enterprise: There's a big debate raised by OPEC that governments should shift focus on limiting oil demand to slash emissions rather than pressuring producers to curb supply — do you think this is an effective strategy in the energy transition?

Mahmoud Mohieldin: In my opinion, it's not an either or question. What is required in the behavioral change is the following: I wouldn’t go and accuse the supplier and forget the demand. We need to be aware of what’s happening in countries in the South, including those who are producing oil and natural gas as a transitional source of energy. We are all basically one camp against a disaster that has existential risk against humanity, so what is needed for the change here is behavioral change by the consumers and the producers through strong incentives.

We need to have effective regulations that should be applied to all without exceptions, along with good standards for dealing with emissions and an even better understanding of what investments based on ESG mean, which have been a really big debate in order to avoid greenwashing.

Not to mention, we need adequate financing in place because all changes including altering patterns of production or decarbonization require finance. Dealing with carbon capture requires finance, shifting from coal to transitional energy sources like natgas or investing in renewables require finance. And there’s been good progress this year, which marked the first time investments in renewables exceeded investments in the traditional hydrocarbon sector.

E: Do you see fossil fuel phaseout or phasedown making its way on the COP28 agenda?

MM: Yes, I think it will. But It has always been there on the agenda, including COP27, despite some accusations that Egypt was focusing more on the holistic approach on loss and damage and on adaptation. COP27 didn’t compromise work toward maintaining 1.5°C, there was more emphasis added on the implementation agenda, especially with the engagement of the private sector.

I'm expecting more action on this topic from COP28 because it’s no secret that the host country is one of the biggest hydrocarbon producers. I have seen some good indicators coming from the oil sector regarding an announcement of its 2050 carbon neutrality targets as soon as possible, what kind of investments they will be making, and how they can use their accumulated surplus to invest in other sources of energy including renewables and green hydrogen.

E: There's been growing concern of an influence of fossil fuel producers on the upcoming summit, will this impact the ability to continue with a successful agenda for the climate talks?

MM: Well, I think this is unfair because the COPs in the past have been hosted either in a major producing country or a major consumer country or even both. Glasgow, which has its location not far from the North Sea’s oil resources, still did a good job in keeping the 1.5°C goal alive during COP26.

The Presidency and the host of COP are basically under the mandate of the UNFCCC. UAE is going to not only be a generous host, but also an effective one. The work is basically in the hands of negotiators, and 80% of emitters happen to be within the G20. If we see progress and some consensus during the G20 discussions in September, that’s great news.

ِِE: Do you believe disagreements on emission cuts and scaling up financing for developing countries in conferences preceding COP28 may lead to these issues failing to gain traction at the summit?

MM: There is no disagreement whatsoever on emissions reduction — the discussions at conferences like Bonn are clearly centered on how it can be delivered, how to shift from the high dependence on fossil fuel, how to pledge implementation, and determining the pathways that deliver this implementation. These are issues of high priority, and it’s not enough to just set targets. It’s very much about the three major means of implementation: Finance, issues related to technology, and regulatory frameworks.

I would say that we shouldn't really be ignoring theimportance of trade as one of the areas of means of implementation. Trade can act as support to implementation or we leave it as it is today, with many restrictions on trade flows that don’t support countries achieving their energy transition goals.

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