Signs of a collective moral compass emerge at COP27
The indications are that Senegal will be Africa’s fastest-growing major economy in 2023. At a time when the global economy is flirting with recession, we expect its economic growth to come in at roughly 7%. The reason behind this enviable growth? Natural gas.
This might make some environmentalists murmur in disapproval, possibly while sitting in front of a warm meal and a cold drink. Electrical stoves and fridges are luxuries not yet afforded to a large proportion of Senegalese. In fact, most people who live without access to electricity reside in sub-Saharan Africa.
About 70% of the world’s population has access to clean cooking technologies, but this figure drops to below 5% when looking at the Democratic Republic of Congo (DRC), Tanzania, Uganda and Rwanda. In Africa’s most populous country, Nigeria, with an estimated 220-million people, only 15% have access to clean cooking technologies.
The lack of access to electricity and cleaner cooking alternatives does not mean these individuals do not consume energy. When looking at energy supply by source we see that the African energy landscape is dominated by traditional biomass, largely encompassing the toxic incineration of wood and charcoal.
More than 80% of the energy supply in Ethiopia and Tanzania is generated through the burning of biomass, while this figure is more than 90% in the DRC. The corresponding figure for the US is less than 5%, with a significant proportion of that taking the form of biodiesel and ethanol fuel.
This reliance on the burning of biomass has considerable social and environmental implications. Estimates suggest that about 500,000 people in Africa died prematurely in 2020 due to household air pollution. In addition to the loss of life, overreliance on dirty cooking fuels has pernicious socioeconomic implications. The gathering of firewood is a time-consuming and arduous task that traditionally falls upon the women of the household. This limits the time available for education and skills development and worsens gender inequality.
It is in this context that the UN’s “African” climate change conference (COP27) took place. The conference was inevitably going to disappoint in some respects. But the one potentially game-changing outcome was the commitment towards the establishment of a “loss & damage” fund — recognising that advanced economies, built on the exploitation of dirty fuels, should assist developing economies in dealing with the repercussions of climate change.
It is still unclear who would be considered liable, what the contributions would be, who would be eligible for funding, what the debt implications would be, and whether this will result in planned spending merely being relabelled. However, this recognition of liability and disparity in responsibility also suggests that a collective moral compass is starting to emerge. So now the important question becomes: what else can we conclude from the direction in which that compass is pointing?
If some countries are less responsible for climate change than others, and building resilience against a changing climate is a global problem, should we not leverage all resources available to improve the lot of those least responsible and most at risk? Whether developing countries should be supported in their efforts to develop their hydrocarbon sectors is a contentious issue. On the surface it sounds counterproductive: why pump more CO2 into the atmosphere to the detriment of the most fragile nations? But there are a number of essential points to consider.
First, not all hydrocarbons are the same: coal and oil are far more environmentally damaging than natural gas, while methane emissions can be reduced through responsible operations. Many African countries are already undergoing internal energy transitions by shifting away from the most pollutive fossil fuels.
Second, the way extraction is managed matters — how oil is produced in Norway looks quite different to the way in Nigeria. Third, the restructuring of energy systems takes time and hydrocarbon-intensive economies still rely on these fuels to earn much-needed foreign exchange, to fund development, and to lessen the fiscal burden.
Finally, scale matters: according to International Energy Agency projections, the cumulative CO2 emissions from the use of Africa’s hitherto undeveloped 5-trillion cubic metres of gas resources over the next 30 years would be around 10 gigatonnes. If these emissions were to be added to Africa’s cumulative total today, it would bring the continent’s share of global emissions to a mere 3.5%, largely driven by SA’s coal-fired energy system.
Economies are complex, and Mother Nature even more so. Making predictions of developmental and environmental outcomes should be done with caution. Still, what is clear is that the status quo is undesirable. Keeping African hydrocarbons underground while investing in renewables does not constitute success if the forests are dying, the lack of access to electricity and clean cooking remains pervasive, debt burdens become inescapable, and profits from renewable energy investments are repatriated to advanced economies — many of which will be expected to contribute to the loss & damage fund.
If advanced economies recognise that they should provide financial support to underdeveloped countries susceptible to climate change, they should not demand that the latter pay the price of foregone development.
New investments in hydrocarbon infrastructure should be carefully considered as the world inevitably shifts away from fossil fuels over time. African countries would do well to craft similar future pathways to that of SA’s Just Energy Transition Investment Plan, unveiled at COP27. These plans need to be assiduously detailed within their own developmental circumstances to prevent a worsening of socioeconomic and developmental outcomes, avoid future carbon lock-in, and ensure the transition does not preclude African countries from achieving fiscal sustainability and energy independence.
It is not about dismissing the need to transition to low-carbon economies, but rather to ensure that the net developmental benefits outweigh the costs in countries ravaged by the worst effects of climate change. Fortunately, the underdeveloped nature of African energy systems also means that relatively small investments, globally speaking, can go a long way in radically altering African energy systems.
• Nel is head: Africa macro and Fourie senior economist at Oxford Economics Africa.