African countries need to see an overhaul of global financial support to leapfrog their economies straight to low-carbon energy, writes Elaine Mills
African heads of state have reframed Africa's role in the global climate-change crisis by asserting a new leadership status for the continent and underscoring its abundant clean energy minerals and renewable energy resources as a potential solution. In return, they called for debt relief for African countries, a global carbon tax and a raft of reforms of the international financial system to support climate action on the continent and worldwide.
The proposal formed part of the "Nairobi declaration" issued at the inaugural Africa Climate Summit in Nairobi, Kenya, in September. This will underpin Africa's common position in negotiations at the UN Cop 28 climate conference in the UAE later this month, and beyond. Leaders committed to aiding global decarbonisation efforts by leapfrogging traditional industrial development, striking a different tone to their previous rhetoric, which was that Africa would pursue industrialisation by any means, including continuing to exploit its domestic oil and gas resources.
According to Kenyan president William Ruto, renewable energy can be just as strong a driver of Africa's economic development as oil and gas. So Kenya will still press ahead with its plans to develop its oil and gas reserves, but just not as a priority, he said. But Kenya's stance contrasts with other African hydrocarbon producing countries, such as Uganda, Nigeria and Senegal, which say that they need to tap their oil and gas resources to develop their economies.
The IEA, in its Africa Energy Outlook 2022, said that Africa's industrialisation will partly rely on exploiting its more than 5 trillion m³ of natural gas that has been discovered but not been approved for development. Cumulative greenhouse gas emissions from the use of these gas resources over the next 30 years would bring the continent's global emissions share to only 3.5pc, the IEA says.
As Africa is the continent most vulnerable to climate change, African leaders have depicted it as a victim of a crisis created by the industrialised world. As such, they insist that Africa will chart a "just energy transition" of its own choosing without being dictated to by the west. But at the Nairobi summit, they signalled more willingness to take part in the global shift away from fossil fuels — and to take advantage of the economic development opportunities this holds for Africa.
"The Africa Climate Summit asserted new leadership on global climate action from the continent most vulnerable to its impacts," E3G programme lead for climate diplomacy and geopolitics Alex Scott said. Ruto shepherded a declaration by African leaders calling for accelerated climate action, mobilising a massive scale of investment in green transition and adaptation in Africa, and reforming the finance system for fairer financing and debt management, Scott said.
Climate-positive thinking
World leaders should "appreciate that decarbonising the global economy is also an opportunity to contribute to equality and shared prosperity", the summit declaration says. "We urge world leaders to rally behind the proposal for a [global] carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation," it adds. This could be supplemented by a global financial transaction tax to fund climate-positive investments, which should be ring-fenced from geopolitical and national interests, the declaration suggests.
African leaders also called for "a new financing architecture that is responsive to Africa's needs" and "collective global action to mobilise the necessary capital for both development and climate action". As part of this, they want to see debt restructuring and relief for African nations, a 10-year grace period on interest payments, an extension of sovereign loans, and debt repayment pauses when climate disasters strike. With these aims in mind, they suggest a new global climate finance charter should be developed through UN and Cop processes by 2025.
They also appealed for an increase in concessional finance to emerging economies, as well as reforms of the international financial system to ease the high cost of capital for African nations. "The scale of financing required to unlock Africa's climate-positive growth is beyond the borrowing capacity of national balance sheets, or at the risk premium that Africa is currently paying for private capital," the declaration says. Africa's annual climate finance needs total $250bn, but it only receives 12pc of this, according to the non-profit Climate Policy Initiative.
African leaders further called for a range of measures to "elevate Africa's share of carbon markets". The International Emissions Trading Association (Ieta) welcomed African countries' increasing interest in carbon markets and expressed hope that more would set up carbon pricing programmes to enable stronger national emissions-reduction contributions. But it baulked at the idea of a global carbon tax, which is "unlikely" to gain political traction, and highly difficult to manage centrally by the UN Framework Convention on Climate Change or any organisation.
A more practical and speedy approach would be to expand the use of national carbon markets that recognise a common pool of international carbon credits, Ieta said. "This could channel large amounts of private-sector capital to climate mitigation opportunities in Africa under Article 6 of the Paris climate agreement."
The leaders called for global and regional trade mechanisms to be designed in such a manner that "African products can compete on fair and equitable terms". In support of this, they called for unilateral and discriminatory measures such as environmental trade tariffs to be eliminated. In return, they committed to aid global decarbonisation efforts by "leapfrogging traditional industrial development and fostering green production and supply chains on a global scale". They expressed concern that only 2pc of $3 trillion in renewable energy investments in the past decade have come to Africa, despite the fact that the continent has an estimated 40pc of the world's renewable energy resources, according to the declaration.
We're all in this together
African leaders called on the international community to contribute towards increasing the continent's renewable power generation to at least 300GW by 2030 from 56GW in 2022. Meeting this target will cost an estimated $600bn and will require a tenfold increase in capital flowing into Africa's renewable energy sector over the next seven years, they said. The UAE pledged $4.5bn to accelerate the development of clean energy projects, which far exceeded the pledges of other governments, such as the US, the UK and those in the EU.
Developed countries have come under fire after missing a goal set in 2009 to provide $100bn/yr in climate financing to developing countries by 2020. The target may finally be hit this year. Just a few days after the Africa Climate Summit, the G20 summit in Delhi echoed the Nairobi declaration's clarion call for an overhaul of the global financial system. The Delhi declaration included new language on the issue of global debt, proposed that the World Bank should be reformed to address the growing economic strains on poorer countries and advocated more financing to help vulnerable nations deal with the costs of climate change.
It also showed agreement on raising investment in energy transition and climate finance from "billions to trillions" of dollars. The declaration highlighted that $5.8 trillion-5.9 trillion was needed pre-2030 to help developing nations implement their nationally determined contributions, as well as $4 trillion/yr for clean energy technologies by 2030 to reach net zero emissions by 2050. Whether African countries can advance their call for a radical reform of the global financial system at Cop 28 will be key to affirming their proclaimed new leadership role in global climate talks.
