Hello from Abu Dhabi, مرحبا من ابو ظبي,
We are delighted to present a new edition of our newsletter, highlighting the latest economic developments in Luxembourg.
Indeed, Luxembourg, as a thriving business destination, continues to establish itself as an ideal hub for expansion into Europe. In this editorial, we aim to showcase some recent achievements that enhance this reputation.
First and foremost, Luxembourg is proud to support the development of the startup ecosystem in Luxembourg. The country has created an environment conducive to innovation and entrepreneurship, providing startups with opportunities for growth and collaboration. Through government initiatives such as incubation programs and attractive tax incentives, Luxembourg attracts the talent and investment necessary to foster the success of startups. This dynamic creates a flourishing ecosystem where innovative companies can thrive.
Furthermore, Luxembourg stands out within the European Union in terms of economic and financial stability, which enhances the confidence of investors and international businesses seeking to establish themselves in a predictable and favourable environment. Luxembourg thus provides a solid foundation for companies looking to establish their presence in Europe.
Additionally, Luxembourg also distinguishes itself in environmental protection and CO2 emissions reduction. With an impressive 12% decrease in emissions, Luxembourg achieves the second-best record in the European Union. This remarkable performance reflects the country’s commitment to sustainability and clean energy. Businesses that value environmental responsibility will find in Luxembourg an ideal partner for their operations.
Finally, in the run-up to the United Nations Climate Change Conference, COP28, hosted by the UAE from 30 November to 12 December, the introductions of this and the next newsletters will focus on this mega event. More than 80,000 participants are expected to attend the COP held in Dubai at what is a critical juncture in the effort to combat global warming. The UN Intergovernmental Panel on Climate Change set the tone for the forthcoming conference with its dire warning that the world is running out of time to prevent the earth’s temperature from rising further to levels that would pose a threat to human life and the biosphere. GCC states are having to reconcile their need for hydrocarbon revenue with their vulnerability to the effects of climate change, including increasing temperatures, water scarcity and desertification, and biodiversity loss.
Three Arab countries have so far hosted COPs: Morocco (COP7 in 2001 and COP22 in 2016), Qatar (COP18 in 2012), and Egypt (COP27 in 2022).
Since the signing of the UN Framework Convention on Climate Change in 1992, the impact of climate change is being felt more acutely around the world. With recent temperatures rising to record levels in much of the northern hemisphere, the UN has warned that the world has entered an era of “global boiling” and has called for an immediate phasing out of fossil fuels that are responsible for the rise in greenhouse gas emissions.
Many skeptics doubt that the UAE, as a major producer of hydrocarbons, can act as an impartial host. The choice of Sultan Ahmed Al Jaber as COP28 president-designate has also been questioned, since he is the CEO of the state-owned Abu Dhabi National Oil Company. However, he is also the chairman of clean energy producer Masdar, one of the biggest investors in renewable energy both in the UAE and internationally.
The conference will have to build on what was achieved at COP27 in Sharm el Sheikh, Egypt in December 2022 and drive it forward with accelerated action. The forthcoming conference will continue formal negotiations on key climate issues, including setting up the loss and damage fund. The institutional arrangements to establish the fund are expected to be finalized at COP28. Also on the agenda is the doubling of adaptation finance, which remains short of its target. At COP15 in Copenhagen in 2009, parties to the UNFCCC set a goal of mobilizing $100 billion annually by 2020 from developed to developing countries to support adaptation measures. However, by 2020, developed countries had pledged only $83 billion per year.
The Middle East, which falls under the “Global South” designation, is clearly among the regions most vulnerable to climate change.
The transition away from fossil fuels will be central to the debates at COP28 and has been one of the most contentious issues at recent conferences. In 2021, the final resolution at the end of COP26 in Glasgow included for the first time a reference to the “phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies.” The term “phasedown” was seen as a compromise amid opposition by some countries to the use of “phasing out” regarding unabated coal power.
“The phasedown of fossil fuels is inevitable,” Sultan Al Jaber said in June on the sidelines of UN climate talks in Bonn, “Our aim should be focused on phasing out fossil fuel emissions” he stated in May at the 14th Petersberg Climate Dialogue. The EU has said that it will push for a global pledge at COP28 to phase out unabated fossil fuels “well ahead of 2050”. The UN has also called for the phasing out of coal and other fossil fuels to avert a climate “catastrophe.”
As a thriving business destination and a bridge between Europe and the rest of the world, Luxembourg is well aware of the urgency of combating climate change. The LTIO Abu Dhabi is proud to witness this major event in our region as it provides us with an opportunity to learn from global discussions on environmental challenges and sustainable solutions.
In conclusion, Luxembourg stands as an obvious choice for companies seeking to expand into Europe. Its favorable startup ecosystem, economic stability, and impressive environmental performance make it an ideal business partner. We look forward to witnessing Luxembourg continue to thrive and play a key role in promoting sustainability.
To be continued in the next newsletter.
Jean-Marie Frentz
Executive Director
Luxembourg Trade and Investment Office in Abu Dhabi