CAN AFRICA FINANCE ITS OWN CLIMATE DRIVEN AGENDA?

Parita Shah,
Department of Earth and Climate Science, University of Nairobi

7th December 2021

Introduction

By 2017, Africa was emitting less than 4% of carbon dioxide emissions.1 Although the continent is the lowest emitter, African countries will lose 2-5% of their GDP with the slightest warming scenario.2 This means Africa will not be able to achieve the Sustainable Development Goals (SDGs) especially reducing poverty, creating jobs, the equitable approach for all and climate adaptation.
While the continent wants to achieve the SDGs, it must also be able to fight climate induced problems. However, there is a real challenge to that. This is because while the 2015 Paris Agreement focused on reducing fossil fuel emissions, the CoP 26 whose target was to totally phase out fossil fuels by the developed nations, are talking about ‘phasing down coal’ rather than ‘phasing off coal’. While Africa continuously suffers from the debt crisis, its climate induced crisis will increase as its European and Chinese counterparts are funding investments in the fossil fuel sector.
For example, in 2020 the Foreign Direct Investment (FDI) to Senegal increased by 39% due to an offshore oil and gas drilling project invested by Australian and British Companies. The same was the case in the Republic of Congo where the investments increased by 19% towards offshore oil drilling, in the Democratic Republic of Congo it increased by 11%.3 China brought in funding of 2 billion dollars to Kenya for mining coal in the Lamu (World Heritage Site) region under the Amu Coal Project. All this means the destruction of the mangroves, habitat, corals and biodiversity under the sea. Kenya was lucky that its National Environmental Tribunal ruled against the power plant decision and the project came to a halt.4

The problem

African countries are further worsening climate induced problems by offering their citizens fossil fuel subsidies. Kenya is one such country where taxpayers pay towards these expenses and yet they suffer the consequences of climate change. To worsen it further, these countries will keep on repaying their debts created by the fossil fuel foreign investment partners and in turn, the environment deteriorates through droughts, floods, rise in sea levels, pests and diseases. African countries are increasing their own debt burden which unfortunately will be carried as a cross by its taxpayers whose lives will also worsen with climate change. Natural resources will diminish and countries’ debts will stay as a burden as payments will become next to impossible due to diminishing revenues worsened by climate change accompanied by poverty.

The solution

Instead of digging their fossil fuels, these countries need innovative finance which can be in the form of blended finance, green and blue bonds and debt swaps. Countries can bring in private investors where they work with communities on developing renewable energy like solar and wind which are very practical in arid and semi-arid areas. This would create a balance for the taxes which locals pay as well as implement most country and county policies that reflect on human rights where the right to a clean and healthy environment is the key. This also helps combat the negatives of climate change caused by fossil fuels.
To add to that, countries can also sell green and blue bonds based on renewable energy, terrestrial conservation and the blue economy which would sustain the negative impacts of climate change. Egypt released its renewable bond in 2020 while Seychelles released their blue bond in 2018. Moreover, debt swaps are also an option if we want to mitigate the impacts of climate change. Where countries cannot afford to pay off their debts, there should be the alternatives to conservation like protection of wetlands, habitats, preventing deforestation and mangrove destruction. This would help curb environmental destruction and reduce the negative impacts of climate change while at the same time financing Africa’s climate driven agenda.

References

  1. Ayompe. L. M., Davis. S. J and Egoh. B. N., (2021). Trends and drivers of African fossil fuel CO2 emissions 1990–2017. Environmental Research Letters Environ. Res. Lett. 15 (2020) 124039.
  2. Economic Commission of Africa
  3. The World Bank., (2021). International Debt Statistics 2022. World Bank Group.
  4. https://www.bbc.com/future/article/20211028-how-chinas-climate-decisions-affect-the-world