The 27th Conference of the Parties (COP27) will kick off in Egypt on the 6th of November. This will be the fifth time the COP has been held in Africa since its creation in 1995, and the second time since the Paris Agreement. This reflects the place and interest of Africa in the issue of climate change. This edition is being held in a particular context, attributable to three macro factors that have played a key role in the past two years.
African COP, world challenges
Firstly, most African countries are still suffering from the economic impact of the COVID-19 pandemic. The economic recovery remains timid and major gains have been reversed. Extreme poverty has increased while economies are experiencing rising debt and therefore little fiscal space to address the enormous challenges. In addition, the supply side shocks coming from the drought in the Horn of Africa have added to the economic hardships in the region. The multiple crises pushed 4% more people in 2021 to live without access to electricity compared to 2019 (IEA-AEO, 2022). This situation may divert attention from climate funding.
Secondly, the Russian-Ukrainian war and the subsequent sanctions have led to spiralling increases in energy costs, supply chain disruptions and global inflation. In Africa, this resulted particularly in food inflation. According to David Beasley, Executive Director of the United Nations World Food Program (WFP), the humanitarian catastrophe exacerbated by the war in Ukraine is “beyond anything we have seen since the Second World War”. Against this backdrop of extraordinary pressures on countries’ economies and consumers, the all-out search for alternatives to Russian oil and gas is setting further back the climate emergency as new investments in fossil fuels are increasing.
Third, geopolitically, the world has not been so divided since the end of the Cold War. The Russian-Ukrainian war has exacerbated the East-West polarization and undermined the ability of world leaders to come together and address global challenges. This polarization is also playing out in Africa with the pressure on African countries to align with one side or the other: this is particularly visible in the rivalries between France and Russia in the Sahel. The positions taken at the last UN General Assembly speak for themselves.
This brief commentary aims to cover the issue of Africa’s energy transition in light of this international context. It presents, first, the African Union (AU)'s position on the energy transition and discusses the arguments on the dilemma between the use of oil and gas reserves and investing in renewable energy. Moreover, it suggests five policy recommendations for successful climate diplomacy.
COP27 and the African Union's position on the energy transition: reconciling divergent positions
COP26 missed the opportunity to mobilize developed countries around their pledge of $100 billion a year in climate financing by 2020, as they had committed to do at COP15 in Copenhagen. COP27, which will kick off in Egypt, labelled 'the COP of Africa’, would be an opportunity to remobilize developed countries on their commitments and beyond. It is an opportunity for African countries to speak with one voice on the asymmetry between Africa's contribution to the climate tragedy, and the dire consequences it faces: about 17% of the world’s population contributing to less than 4% of the global greenhouse gas emissions, while being the most vulnerable to climate change. However, such a stance requires efforts from African countries to live up to their commitments as well. African countries' positions on energy transition diverge. The “just energy transition” is not understood in the same way across governments.
The energy transition is at the heart of climate policy: it is central to both mitigation and adaptation efforts. Africa is the region of the world where access to energy remains the lowest. 57% of the population still does not have access to electricity. This figure increases by 20 percentage points if we consider sub-Saharan Africa alone (77%). Sub-Saharan Africa in particular is the only region in the world where the number of people without access to electricity has increased over the last 20 years.
This energy poverty contrasts with the continent's wealth of energy resources. Africa holds 9% of the world's reserves (17.55 trillion standard cubic meters) and 6% of the global production for natural gas, and 7% (125.3 billion barrels)and 8%respectively of world reserves and global production for crude oil. Moreover, almost 40% of global new gas discoveries in the last decade were in Africa (mainly Senegal, Mauritania, Mozambique and Tanzania). This seems to be a dilemma for African countries: exploiting oil and gas reserves or moving towards an energy transition. Some countries see the exploitation of oil and gas reserves as a solution to the energy problem in the short and medium term, as well as natural wealth to finance other development needs. The weak mobilization of developed countries for climate finance reinforces this position, as well as the race of European countries to find a solution to the energy crisis caused by the Ukrainian crisis through the import of African gas. Between 2016 and 2019, Africa received about US$73 billion in climate finance - which is less than it needs (estimated at over $3 trillion in mitigation and adaptation by 2030). The continent receives less than 4% of global climate finance, while 60% of adaptation and resilience finance is in the form of loans. Furthermore, the energy crisis has called into question the credibility of calls for an energy transition. According to Nigerian Vice President Yemi Osinbajo, Europe has had plenty of help with its energy crisis; “in stark contrast, the developing world is still being held to account for its emission reduction without adequate support for its energy transition.” Other countries, on the other hand, prioritize the mobilization of mitigation finance promised by developed countries to accelerate the energy transition.
Faced with these opposing positions, the African Union (AU) opts for a mixed strategy that consists of using both renewable and non-renewable energies: the Common Position on Energy Access and Just Energy Transition, stipulating that “Africa will continue to deploy all forms of its abundant energy resources including renewable and non-renewable energy to address energy demand”. This position is motivated by the energy poverty of African countries and the dependence of most of them on oil and gas resources. It is important to note that 77% of the continent’s electricity comes from fossil fuels, while oil and gas revenues account for 50-80% of the government fiscal revenues of major producing countries.
Policy implications
In the run-up to COP27, some policies can guide the position of the African Union.
- Distinguish current events and long-term goals. The war in Ukraine and its impact on energy prices, as well as geopolitical events, are current events that should not undermine the long-term vision of African countries or the climate emergency. African countries must stand for a long-term view. Arguably, in the medium term, the energy crisis caused by the war in Ukraine will accelerate the energy transition, although for the time being, in the face of the emergency, States are turning to palliative solutions. Europe will definitely learn from its energy dependence, in particular to Russian gas. Confusing short-term events with long-term trends is misleading and could set back the energy transition.
- Energy transition and exploitation of oil and gas resources: A false dilemma. There is no dilemma between the exploitation of oil resources and the energy transition, as long as the first is functional to the latter. Oil and gas revenues represent a large share of government revenue and export revenue for most of oil and gas rich countries in Africa.Using oil and gas revenue to invest in modern sources of energy can foster industrialisation, economic diversification and reduce vulnerability to energy market conditions. As William McDonough put it so well, “the Stone Age did not end because humans ran out of stones. It ended because it was time for a re-think about how we live”. Africa’s oil and gas revenue should serve the energy transition.
- Speaking with one voice. The current situation shows a divergence of interest between countries and therefore a weak capacity of Africa to speak with one voice. The African Union needs to make informed choices guided by scientific evidence at the various global climate change meetings, starting with COP27.
- Just energy transition. Energy transition will not be without asymmetric consequences across countries, sectors, and individuals. The priority should be to agree on a just energy transition that leaves no one behind (AfDB-AEO, 2022).
- Accelerate the African Single Electricity Mark project (AfSEM). In June 2021, the AU lunched the AfSEM, which ought to be the world largest continent-wide energy trading program. The goal of the project is to connect all 55 African Union Member States through efficient, affordable, and sustainable electricity market.” Accelerating the AfSEM project contribute to accelerating energy transition and attaining the AU’s 2063 goals.
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