Sharm El Sheikh – November 15:
Yesterday, the King Abdullah Petroleum Studies and Research Center – KAPSARC – cohosted a COP 27 side event with the Institute of Energy Economics (IEJ) in Japan to highlight the role of finance in achieving the net-zero energy transition from the Asian perspective.
In his introductory remarks, the President of KAPSARC, Fahad Alajlan, shed light on the importance role of multilateral development banks or donors in encouraging the institutional investors to come in, by providing equity, which currently makes up only a small share of their commitment.
“We have to address and acknowledge that we come up short and need to do more in climate finance – this is vital,” he mentioned during his speech.
He emphasized that the CCE framework is important as it will significantly decrease the need for new investment and new infrastructure; it will still be needed but it will be a little bit less.
He stressed that the energy transformation brings fast opportunities for investment in infrastructure, energy and more, said that finance is importance in supporting the advanced economies in meeting or exceeding the $100 billion a year in climate finance for developing regions.
Alajlan also highlighted the importance of the think tank in providing better data analysis to facilitate better policy, quick decision-making and investment.
The IEEJ Chairman, Mr. Tatsuya Terazawa, stressed on the importance of finance to ensure that we can make the transition; he explained that this event comes in line with the MOU that his organization signed with KAPSARC in promoting research activity in several fields.
He said that in 2050, 60% of energy would be supplied by fossil fuels, but to reduce carbon emissions we expect that 20% of fossil fuels would be decarbonized using CCS technologies.
“The demand for natural gas and LNG is to remain resilient in 2050, and the natural gas is to be used to produce hydrogen and ammonia,” he said.
For his part, Fatih Yilmaz, a researcher in the Climate and Sustainability Program at KAPSARC, said that significant investment gaps persist on the road to achieving the Paris Agreement goals in almost all countries, which are strikingly high in developing countries. ESG finance penetration is extremely unequal and mostly unutilized by many developing countries. Considering these facts, many developing countries may face further difficulties in accessing the necessary finance if global ESG frameworks are not designed to be more flexible, holistic and inclusive.
Additionally, the Board member and Director for Climate Change and Energy Efficiency Unit at IEEJ pointed out thatenergy saving and electrification are core strategies for decarbonizing the end user sector.
It is worth mentioning that the King Abdullah Petroleum Studies and Research Center (KAPSARC) is an advisory think tank within global energy economics and sustainability, providing consulting services to the Saudi energy sector.
The IEEJ is an energy think tank in Japan that focuses on energy, economic and environmental issues, as well as the geopolitics of the Middle East.
This news story appeared on Arab News