Countdown to COP28 – In Conversation with Damir Ahmovic: “I wouldn’t bet against our capacity to innovate”

We chatted with Damir Ahmovic, President, Europe, Alfa Energy (DBA Edison Energy in North America), who will be attending the upcoming COP28 UAE climate summit in Dubai. Ahmovic discusses the need to “major on the majors,” private sector innovation, and staying the course towards economywide decarbonization.

This year’s COP climate talks will focus on some major themes, including technology and innovation, finance, and inclusion. What role can the private sector play in addressing these?

I think at the heart of any answer that will wrap all of those concepts around one theme is innovation, because we cannot resolve the situation with the same mindset that created it. The heart of the decarbonization challenge is decarbonizing the electricity network, and there are three known sources that we can count on right now – renewables, nuclear, and biomass.

We must also scale down our reliance on fossil fuels, especially in heat and transport. It implies having an actionable, consensus-driven plan on a global level that will help us hit the first target. Hydrogen is the obvious frontrunner as the most plausible low/zero carbon alternative. What is frustrating is that we have the alternative, but for various reasons it is just not happening fast enough.

Let’s imagine we’ve always had only wind and solar. What would the grid look like? How would we operate with that only and then design a solution with that in mind? Those are the questions that will drive innovation. It almost forces us to start with a clean slate. I’m seeing many examples in the private sector where some of these ideas are coming into the fore. I wouldn’t bet against our capacity to innovate as humankind because there are so many brilliant people out there who can drive change.

We’re being ushered into an era of so much fluidity and change, and we have to change our mindset and allow innovation to come around dynamic pricing mechanisms. Then we can actually lean into the market when it’s cheap and plentiful, and stay away from it when it’s not. And we need to change our habits, because we need to think differently about how we run our lives in order to conform to where we need to go.

COP has laid out a vision to deliver on the pillars of the Paris Agreement. How do you envision this within the context of private sector implementation and decarbonization?

We’re facing a humongous task, and I think it’s really important that we major on the majors right now and that we put all of our resources into lifting the heaviest objects out of the way first. The danger is if we fragment and dilute the focus and put it into a number of different areas. Then we’re going to muddy the waters and we might lose the impact on where it matters the most because there’s only a finite amount of financing.

When we want to do everything at once, that’s where boiling the ocean comes to mind. We need to be very selective about what battles we pick and the cadence of how we organize our wins, because this is going to be a war against time – and we can’t do it all in the in the short space of time. We’ve got 6 1/2 years to reduce our footprint by 40 percent. Let’s make sure that we focus our efforts where it counts the most so we can hit the first target. Because if you don’t hit the first target, the others are irrelevant.

The COP28 Presidential Action Agenda calls for several actions, including for companies to demonstrate scalable technology solutions related to key energy transition challenges. What are you seeing from the private sector around taking these actions?

Most private sector clients are aware that it’s not a magic pill they can swallow and everything’s going to be okay. And most companies that I’ve been working with know that this is going to take multiple efforts on a number of different fronts in order to conform to the pathway that will lead us there.

Ultimately, private sector finance will have to see the returns even if they’re low – as long as they have legs and potential. Some technologies are not at a point of scale where they can be deployed profitably, and they clearly need to be subsidized.

If we’re going to rely on private finance mechanisms, we need to ensure returns are there. To begin with, some of these need to be pushed and given a gentle nudge by the organizations who have a lot more at stake if they don’t do this right. It’s just a simple rule of economics with clients right now. We’re forgetting that climate isn’t their top agenda right now – their top agenda is surviving. I think a lot of that has to do with the fact that companies are having to recover from the pandemic, from inflation, from the impact of wars. So many companies are actually on the edge of survival right now.

During last month’s Climate Week NYC, COP28 President-Designate Dr. Sultan Al-Jaber opened trading on Wall Street with a clear and decisive message: the private sector must play its role in ushering in a new era for sustainable climate finance. What are some tangible ways the private sector can heed this call to action?

I think it’s important that he has addressed the private sector because it elevates that level of consciousness – at least to the point that consumers will start creating this demand from clients. And this is how the private sector reacts because it does not want to be seen as disregarding the rules that make life on this planet sustainable. So, messages like that are needed. But it will be the frequency, the seriousness, and the intensity of those reminders that will permeate into our consciousness from all different levels that will make that work.

Stay tuned for the next installment of our Countdown to COP28 Series!