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By Erik Solheim
100,000 people from all corners of the world came together in Dubai for the global conference on climate change ending on December 13. It was a festive atmosphere bustling with energy, ideas were discussed and initiatives launched.
On the last day, the conference agreed that the world needs to "transition away from fossil fuels." The agreement came after hard bargaining and represents a compromise between among others small island development states who wish to phase out oil and do it fast and oil-producing states who are in no hurry for change.
To understand the impact of such a decision we need to put it in a political and economic context. The decision sets a direction for the world. It represents a new global aspiration after many years of not touching this contentious issue. It's however highly unlikely to have an immediate impact on policies in most fossil fuel-producing nations.
There are still reasons to be optimistic.
It was not a political decision that transitioned the world away from horse transport. Daimler and Benz invented a better engine in Stuttgart, Germany. It was not the old companies who made the modern information technology revolution. Steve Jobs held up the smartphone in California.
In the same way, phasing out of oil will not happen thanks to an agreed global decision. It will happen because Chinese solar companies like LONGi, Tongwei, Jinko and Skyworth PV Tech innovate, bring down the price and take solar energy to a massive scale. It will happen because Goldwinds, Envision, China Three Gorges Corp, CATL, BYD and many other renewable companies bring down the price of wind and hydropower, electric batteries and cars.
I have been to nearly all climate conferences since Bali in 2007. When we quarreled and discussed back in the day, no one ever contemplated that the price of solar energy would fall 90 percent in a decade and that the price of wind energy would fall nearly as much. LONGi just set a world record in the energy that a solar panel can absorb. Solar is now the cheapest energy everywhere in the world. Shifting from fossils is not a loss, it saves money and creates more jobs.
It's the political economy that drives the change, not diplomacy. It's the innovations of business which transform our lives, not texts at the negotiating table. The green revolution will happen because people all over the world see that renewables are cheaper, better and more comfortable. No one who bought an electric car ever wanted to go back to the combustion engine.
But of course, the transformation of the economy needs to be guided by visionary governments, markets need to be framed by political leaders and organizations like Global Renewables Alliance must lead the advocacy. The conference in Dubai pledged to triple renewable energy by 2030. That will establish a victorious circle of much larger production scale, which leads to lower prices, which makes it possible to scale up even faster. Climate talks in Dubai also happened at a time of a huge geopolitical shift. We are approaching the Asian century.
If anyone asked me 10 years ago where to go for the best environment practices, I would always answer, please go to Brussels, Berlin and Paris. The green shift was led by the European Union. If I get the same question today I advise visits to Beijing, Shenzhen and Hangzhou. China, one nation alone, has 60 percent or more of all green market share.
My American friends have proudly said their nation is the indispensable nation for the world. China for sure is now the indispensable nation on our road to an ecological civilization. No one who wishes to move fast on solar or wind energy or on electric cars or batteries can do it effectively without China. No idea is more self-defeating for the green transformation than de-coupling from China.
It is however not just China that leads. In India, Prime Minister Narendra Modi is launching green missions by the day. Indonesia last year reached zero deforestation after efforts from the Jokowi government. Vietnam moves much faster into renewable energy than most nations.
Europe is still important, but Asia dominates the real action. This was also reflected in Dubai.
China had a much bigger pavilion and a much larger presence than at any previous climate convention. In the past, we saw mainly the government, now many companies, provinces and civil groups from China were visible and inspired people. I attended the LONGi night with presentations of all their achievements as lead solar company.
Besides the transition away from fossil fuels and the big commitment to renewables, Dubai will be remembered for the establishment of the Loss and Damage Fund. This is exciting because it is a major moral victory for developing nations. It is an acceptance of the obvious. The climate crisis is caused by the developed nations and they should accept to pay for the loss and damage which they have caused.
The U.S. historical emissions per capita are 8 times the Chinese, 25 times Indian and the difference is even much bigger if we compare to Africa or to small island development states. No one should ever blame the developing world for the climate crisis.
The money in the Fund is however very far from the needs of small island development states facing potential extinction. Africa is facing droughts and Pakistan suffered a horrible flood last year. Given the global financial institutions we create tend to be bureaucratic and slow, every nation will do better looking into all domestic opportunities for green transformation and green growth.
In the end, the conference in Dubai turned out a success for global efforts to combat global warming. But let's focus our attention on the green transformation in domestic politics and in business. It's about the political economy!
Erik Solheim, former Undersecretary-General of the United Nations and Vice President of the Green Belt and Road Development Coalition, shares his thoughts on the COP28 in Dubai.
