It was a long time coming, but the world seems finally to have grasped the idea that it has to take responsibility for mitigating climate change and alter the way it does things.
The insurance and reinsurance sectors, as the ones who largely foot the bill for natural catastrophes that are increasing in frequency and magnitude, will be feeling slightly easier. But there is still a long way to go.
The experts are fine-tuning their message that mitigating climate change will take every one of us making dozens and dozens of small changes to our daily lives – rather than a few grand gestures.
Taking a leaf out of health insurers’ books, P&C insurers in MENA might want to introduce small financial incentives to insureds who proactively take steps to reduce their carbon footprint, for instance.
Of course, the MENA region will have a tougher time of it than some other regions because it is home to many of the world’s big oil and gas producers. Reducing our dependence on hydrocarbons is fast becoming a central pillar of many nations’ net-zero goals.
As in many of these things, the UAE is often a trailblazer and has recently revised its target for reducing carbon emissions from 30% to 40% with major cuts by 2030. But to be clear, achieving these targets will involve lots of people doing lots of things differently a lot of the time.
The UAE Ministry of Climate Change and Environment has said the government is seeking to cut emissions by 40% by 2030 from a business-as-usual level. The idea behind this is to bring the nation into the struggle, including the public and private sector, to accelerate the UAE’s target to achieve net-zero emissions by 2050.
It will seek reductions from industry, agriculture and in power grid generation and transport – as well as domestic household efforts.
The UAE minister of climate change and environment Mariam bint Mohammed Almheiri said, “In the Year of Sustainability, when our nation hosts Cop28, this milestone announcement underlines our national commitment to more ambitious climate change.”
The minister said the government, “Views climate action not only as a strategic imperative for the environment and our future generations, but also as an opportunity for sustainable economic growth and socially-inclusive prosperity.”
The point about sustainable economic growth is well made and could mean a complete shift away from oil as a significant contributor to GDP.
The ministry has listed its target reductions across sectors. These include a 51% cut in emissions from electric power grids; 56% from transport emissions; a reduction of 22% in emissions produced in the agriculture sector as well as an 8% cut in emissions created from waste. The plan is part of a third update of the UAE’s second nationally determined contribution.
The UAE also aims to triple its investments in renewable energy in the next seven years and to establish a specialised national research and development centre for the hydrogen sector. M
Paul McNamara
Editorial director
Middle East Insurance Review