The implications of #COP26 for #Africa
“If you want to know the end, look at the beginning”. This African proverb aptly captures the parallels in Glasgow on Saturday 13th November 2021 as nearly 200 parties agreed to a compromise to keep the safe 1.5℃ warming threshold within sight, just as they did six years ago in adopting the Paris Agreement. The pragmatic optimism that pulled the globe together in 2015 to adopt the Paris Agreement was a good beginning that laid the foundation to finally iron out pending issues that prevented full, ambitious implementation of the agreement — which is what the Glasgow Climate Pact has achieved six years later.
COP26 registered some notable achievements. For example, while the planet was on course to a dangerous 2.7℃ warming going into Glasgow, new announcements made during the conference could see warming this century limited to 2.4 degrees C, or as little as 1.8 degrees C. In addition, parties agreed to revisit their commitments, as necessary, by the end of 2022 to put the planet on track for the safe 1.5°C warmings. To put this in perspective, estimates before the Paris Agreement in 2014 took the world to 3.7degrees C of warming this century! So, in the brief period from 2014 to 2021, predicted warming this century has fallen from 3.7 degrees to as low as 2.4 degrees or even 1.8 degrees. That is a very significant change. For the first time, the conference also agreed to phase-down unabated coal and inefficient fossil fuel subsidies, all steps towards achieving the safe warming thresholds. And all this actuated in a manner that justly transitions economies to low emissions pathways.
The conference also finalized the “Paris Rule Book, “ which explains the “how” of implementing the Paris Agreement. This covered key issues of cross-border collaboration in implementation covered under Article 6 and transparency & reporting on progress by all parties that had previously been contentious. On the critical finance issues, wealthy countries committed to doubling the collective share of adaptation finance within the $100 billion annual targets for 2021–2025. And to reach the $100 billion goals as soon as possible. Parties also committed to a process to agree on long-term climate finance beyond 2025.
Implications of COP26 for Africa
But which way Africa? One fundamental fact is that climate change stressors did not stop even as the negotiations ended in Glasgow. Africa continues to hold the unenviable position of being disproportionately vulnerable. For a region that has contributed least to the changing climate, accounting for only 2–3%, Africa is already heating up twice as fast as the rest of the globe, and 20 countries are already warming more quickly than the globe. By proportionality, the implication is that as the world crosses the safe target of 1.5℃, Africa could be approaching catastrophic levels of up 3℃. And with this, the escalation of socioeconomic misery that is already at breaking point is guaranteed. This portends more bad news. Be it the 257million people experiencing hunger. The over 12million young people who need jobs every year remain disenfranchised in unemployment. Up to 60million children are malnourished and costing the continent between 1.9% and 16% of its GDP. To a surge in vector-borne diseases like malaria. To increase flood risks, where flooding costs between $10billion. Despite all these, another variable, the COVID-19 global pandemic, has been added to this equation of stressors
This then means that Africa’s pace to build resilience must exceed the global average. The continent must aim for resilience building at least at twice the global pace. And this should follow pathways that unlock tangible socioeconomic opportunities — including food security, creating inclusive enterprise opportunities and competitive macro-economic growth. By this ensure a just transition of Africa’s communities to the low emissions development pathway.
Already, the continent has taken steps to demonstrate this urgency. For example, the region was among the leading leaders in ratifying its first Nationally Determined Contributions (NDCs) commitments. Up to 98% of countries have ratified their 1st round Nationally Determined Contribution (NDC) that are now being built upon. This makes Africa the continent with the highest compliance rate. As countries submit second-round NDCs, already 37 countries have submitted revised NDCs, with 18 being highlighted for submitting stronger targets. But while impressive, these emissions cuts need to be considered in the context of achieving a just transition for a region that remains a negligible emitter yet disproportionately vulnerable because of a low socioeconomic base.
Implementation considering a Just Transition in Africa
Fundamental questions need to be answered as to how the region approaches issues such as ending fossils fuel subsidies, operationalising market mechanisms, the finance question among key elements agreed to in Glasgow towards ratcheting up implementation ambition of the Paris Agreement. The following are the key issues to guide Africa’s implementation of its climate commitments considering the need to actuate a just transition.
First, relook at fossil fuel subsidies. It is estimated that Africa has spent as much as $75billion in fossil fuel subsidies in just one year. But the question we need to ask is, how do such expenditures contribute to a just transition? How do they contribute to job creation, for instance? The answer needs to start from a serious consideration of economic inclusivity. The entirety of Africa’s extractive sectors is estimated to employ less than 1% of Africa’s workforce. The lack of inclusivity in this sector coupled with the economic effects of commodities price shocks, where Africa has lost up to $63 billion due to price shocks, and leading oil economies shrinking by up to 10.6% in 2020/21, means that the region needs to look at everything around fossil fuels, including subsidies, from economic inclusivity. And this calls for an urgent need to re-invest proceeds from oil and fossil-based extractive industries into the inclusive climate-resilient areas of the economy instead of fuel subsidies that are unsustainable in the long run. Part of the $179billion in oil revenues that Africa earns, together with part of the $75billion currently expended in subsidies, needs to be re-invested in inclusive and climate-resilient sectors of the economy to provide dividends in jobs and competitive enterprise opportunities for the majority. For example, up to $320billion in new business opportunities can be added each year to Africa’s economies between now and 2030 if we transition to low carbon, value-added, sustainable, and climate-proofed food and land-use systems. Part of the proceeds from and subsidies expended in the oil sector needs to be re-invested to unlock these opportunities.
The second is just a transition in energy. The energy conversation in Glasgow focused on “phasing-down” coal and fossil fuel subsidies. We need to ask in Africa how this discussion relates to a region that is not only a negligible emitter but also leads to energy poverty. Currently, over 580 million Africans lack access to energy. In addition, unpredictable and frequent power outages cost firms in low- and middle-income countries — the majority in Africa — up to $300 billion each year. To bridge this gap, using fossil-based high emitting solutions such as generator-based power costs three to six times what grid consumers pay across the globe. This impedes the competitiveness of local enterprises that must pay more for unstable power than their competitors in the local marketplace. An equivalent discussion for Africa that will achieve the same objectives of abating energy-related emissions envisioned in Glasgow should be to bridge the energy divide using clean sources. And considering that energy is an enabler of economic development and not an end, this approach has two paradigms to focus on:
One is that up to 84% of Africa’s energy poor are in rural areas and live far from grid connectivity. The lower energy demand densities in rural areas coupled with high dispersal where potential users are spread sparsely over large areas mean that extending grid connectivity becomes uneconomical, including costly transmission losses. This then makes off-grid solutions the most economical for Africa. And in investing in such an off-grid, Africa will need to target its areas of comparative strength. Clean energy solutions such as solar power offer the region the most significant comparative advantage. Africa has the richest solar resource in the world. Africa enjoys the lowest cost of solar development at $1.30 per watt compared to the global average of $1.80 per watt. Africa holds less than 1% of the global total installed solar capacity even with this significant advantage. This is a time gap that the region should focus on bridging and turning its comparative advantage into a global competitive edge. Two is the context of application which should target productive applications. Bridging the energy gap needs to prioritise relevant energy solutions that can be applied to power key income-generating activities in Africa’s underserved to enable them to enhance incomes and build resilience.
The third is the finance gap. Even as Glasgow parties agreed to double the $100 billion pledge to developing countries, Africa already needs a minimum of $2.5trillion to implement its climate action commitments. This means that even if the pledges were honoured in full, the gap would still be gapping. At the same time, the region already invests in adaptation at the rate of 2% of GDP each year. The question is how the region can bridge the finance gap using what it already has. One area that is a big win for the region was the finalization of the rule book, with key issues of Article 6 being ironed out. This is to say that the region can leverage Article 6 to mobilise market financing to drive key NDCs action in the two most critical sectors to the just transition — agriculture and clean energy — that are already prioritised in over 70% of NDCs. For example, Article 6.2 on Internationally-Transferred Mitigation Outcomes allows countries that are considered the highest emitters to partner with low emitters across the globe — including in Africa — and agree on how their high emissions can be offset through investing in supporting a low emission action within the territories of low emitters. Africa, due to its negligible emissions, is a natural supply market here. But the key to Africa’s benefit should be on how well such market mechanisms are tied to catalyse the growth of competitive low carbon enterprises on the continent. While typical areas of investment have been in reforestation, Africa should take a strategic stance and prioritise how any collaborations towards reforestation will enhance much needed economic productivity. Africa should look at investing its 2% of GDP contribution to climate action to forging collaborations under Article 6 that unlock such tangible enterprises to implement up to 70% of its NDCs while unlocking key socioeconomic opportunities to drive a just transition.
Also, some of the money pledged and promised will go to developing countries to restore damaged land and help tackle wildfires; the above opportunities for Africa should inform how this money is utilised to drive the implementation of NDCs. Indirect financing through incentivising critical constituencies of implementers in Africa is key. These resources should be used to incentivize a shift to non-typical sources such as micro-finance & cooperatives that are most accessible to most Africans in the informal sector and most vulnerable. Leveraging the informal sector that provides livelihoods for up to 80% of Africans and the youth to invest in enterprise actions that drive the realisation of country NDCs is a critical niche to tap. Africa informal sector, as well as the youth, are already engaged in various actions. In addition to looking at new sources of investment, we need to look at catalysing a shift of investments by these actors who are the majority players in Africa’s economies.
Fourth, incentivise the youth & informal sector for implementation in the aforementioned areas. Africa can only compete from her position of strength. The region’s strength is her youth, who form over 60% of the population. Another is the informal sector that engages up to 80%. These two constituencies need to be tapped as the foot soldiers of ground implementation and inform policy recalibration to maximise implementation. The enterprises they do need to be incentivised to take up climate action solutions as productivity and income generation sources.
For example, clean cooking is an area in which many youths are already engaged. Fuelwood is a major driver of deforestation in Africa. The provision of sustainable alternatives that are better is a key incentive for reducing this risk that African countries need to prioritise in their NDCs implementation. It is crucial to support youth to retool their skills into establishing enterprise actions that drive clean cooking to lower pressure on ecosystems and minimize indoor pollution. Targeted fiscal incentives such as offering tax holidays for youth & informal sector entrepreneurs who establish enterprises in the NDCs areas to enable them to minimise their tax burden during the formative years will go a long way to attracting enterprise growth and longevity in climate action.
Fifth is data for policy. The entrepreneurial actions of the youth and informal sector actors in implementing climate actions need to be tapped as sources of empirical data of what works successfully to be further targeted by enabling policy incentives to expand such successes. This will form a continuous loop of policy being informed by what works to make them targeted and maximize their impact in driving implementation.
The success in Glasgow elicited the nostalgia of Paris 6 years ago, where pragmatism and unity of purpose to combat common challenges of climate change led to the Paris Agreement. Glasgow replicated this success, only this time, from an implementation dimension. Africa will be among the regions that will benefit most from the full implementation of the agreement, which should now be the focus for everyone across the planet. The transition away from fossil fuels and towards a clean, just, renewable future is going to happen. Let’s keep the passion and faith!