At the upcoming UN Climate Change Conference (COP28) in Dubai, world leaders will, for the first time, officially take stock of global progress towards the goals set out in the Paris climate agreement in 2015. The growing frequency of extreme weather events makes this a decisive moment for climate action, and it’s no secret that countries are falling short of their Paris commitments. The question is whether the assembled leaders—whose ranks will include ^[1] Pope Francis—will be able to navigate the myriad complex challenges impeding progress.

One particularly thorny challenge is the ‘energy trilemma’: the need to balance the reliability, affordability and sustainability of supplies. While sustainability is obviously critical—which means rapidly reducing emissions in order to limit global warming to 1.5°C above pre-industrial levels, as set out in the Paris agreement—it can’t come at the expense of access. On the contrary, the world must increase access to energy: 775 million ^[2] people worldwide currently lack electricity.

The energy trilemma lies at the root of key controversies surrounding climate negotiations. The selection of Sultan Al Jaber, head of the Abu Dhabi National Oil Company, to serve as COP28 president was labelled ^[3] a ‘scandal’, much like having the fox guard the hen house. But the United Arab Emirates has been using its position as one of the world’s biggest oil exporters to persuade its fellow oil-rich countries to accelerate their emissions-reduction efforts. The Global Decarbonization Alliance ^[4], an effort by Al Jaber to prod major state oil companies to reduce their greenhouse-gas emissions, is expected to be unveiled at COP28.

We know that effective climate action will require the engagement of a wide array of stakeholders. For example, in order to cover the massive costs of climate action—it’s estimated ^[5] that Africa’s nationally determined contributions alone will cost nearly US$3 trillion—private finance is essential. That is why it bodes well that Wall Street heavyweights, led by BlackRock CEO Larry Fink, are flocking to COP28 ^[6], after staying away from last year’s conference.

When it comes to climate action, engaging with big finance might seem less problematic than including big oil. But the energy trilemma implies otherwise. Though the International Energy Agency suggested ^[7] last month that 2030 would mark the ‘beginning of the end of the fossil-fuel era’, OPEC rejected ^[8] the IEA’s forecasts, arguing that they were based on ideology rather than facts.

The hydrocarbons exporters may well have a point. The IEA report ^[9] paints an optimistic picture, predicting that global demand for coal, oil and natural gas will peak by 2030, as electric-vehicle adoption accelerates and renewables gain a larger role in the global electricity mix. But as energy experts ^[10] were quick to point out, these projections depend on several factors.

For starters, the IEA is betting ^[11] that economic growth in China—the world’s largest polluter—will slow enough to bring about a significant reduction in energy demand. It also assumes that governments will fulfill their climate policy pledges, despite strong evidence to the contrary. In the United Kingdom ^[12] and Germany ^[13], green measures have been rolled back, and in the United States, Republicans are working hard to dilute the clean-energy provisions contained in the Inflation Reduction Act.

There’s another problem. The IEA focuses on when fossil-fuel demand will peak but fails to consider adequately the shape of the consumption curve before and after. Energy demand may well plateau at its highest-ever level for some time, rather than quickly beginning to fall. That demand will have to be met, and the extent to which renewables will be able to cover it is not yet clear. OPEC’s warning ^[14] against underinvesting in energy security thus should not be dismissed out of hand.

Allowing idealism and ideology to dominate discussion of the energy transition will lead only to incomplete or unrealistic solutions. Though use of renewables is growing, fossil fuels continue to account for a large share of the global energy mix. And there’s no guarantee that energy demand will fall in the short or even medium term, not least because the developed world’s burgeoning middle class has shown a strong and growing appetite for affordable energy.

Big oil is well aware of this. Last month, US oil-and-gas giant Chevron announced ^[15] its purchase of rival Hess for some US$53 billion, and ExxonMobil acquired ^[16] Pioneer Natural Resources for nearly US$60 billion. While these acquisitions may have been partly motivated ^[17] by the desire to evade buyback pressure from shareholders, they also represent a bet that firms will benefit from the ability to produce more oil and gas in the coming decades.

Phasing out fossil fuels is, as Al Jaber himself has put it ^[18], inevitable. But, as enticing as the IEA’s projections might be, the precise trajectory and timeline are far from certain. If COP28 is to be a success, participants must recognise this and work together to find pragmatic and realistic solutions to the energy trilemma that enable real progress towards a global economy that is dynamic, sustainable and inclusive.