Antonio Guterres, UN Secretary-General, expressively but matter-of-factly painted a concerning picture for the global community gathered in New York for this year’s UN General Assembly.
“We see emissions growing,
We see fossil fuels fashionable again,
We absolutely need to reverse this trend,
We are moving into a catastrophic situation”
He further stressed that “it is high-time time to put fossil fuel producers, investors, and enablers on notice. Polluters must pay.” He was championing billions of voiceless people when he made these points, especially against the backdrop of devastating floods in Pakistan and unprecedented drought in the Horn of Africa, impacting millions. He made a similar appeal to world leaders gathering for climate talks in Egypt to listen to their people’s calls for change and to raise their climate ambition.
By 2050, Africa will be home to more than 2 billion people. Africa’s future cannot be condemned to underdeveloped socio-economic conditions alongside endemic energy poverty at the grossly inequitable scale we see today, especially in sub-Saharan countries. Economic development is key to uplifting millions of its citizens out of poverty, powered by reliable, affordable, local, and scalable renewable energy.
The ongoing global energy crisis is a relatively short-term interruption affecting the global clean energy transition pace. Currently, several African nations are net exporters of oil and gas (O&G), largely to European markets. The current export volumes provide revenue streams for countries like Algeria and Nigeria, but in other countries like Tanzania and Uganda multinational O&G majors are promoting new development opportunities. Much of this effort is focused on creating expensive O&G export infrastructure, including pipelines, to meet anticipated European demand. However, based on the latest estimates it’s highly unlikely that supply from new African O&G export projects will ever be needed by European markets by the end of the decade.
Under the expected trajectory of the global clean energy transition, African nations are well placed to capture the technology gains of these fundamental changes and attract higher shares of climate and energy finance. The IEA’s Sustainable Africa Scenario shows that renewables could account for 80 percent of the 290 GW of capacity additions to 2030 (see Figure 1), while the commissioning of new fossil fuel plants has been slashed in half over the past decade. Further, for Africa, clean energy provides a strong means to deliver on both the 2030 Agenda for Sustainable Development Goals (SDGs) and the Paris Agreement’s ambitious goal to limit global warming to 1.5°C (2.7°F) and build resilience to the unavoidable impacts of climate change.
The U.S.’s Opportunity to fast-track Africa’s Clean Energy Revolution
The U.S. government’s efforts to mobilize and scale-up clean energy investments are vital for ensuring that a just energy transition is kick-started across Africa. Supporting reliable electricity access and clean cooking solutions for millions of Africans is also a priority, and the solutions must meet the scale of the challenge. The U.S. government – together with partners in Europe and elsewhere – should deepen their cooperation and coordination with African countries to assist in building clean, secure, and affordable modern energy infrastructure for meeting the continent’s expanding energy needs as swiftly as possible.
Scale-up clean energy and climate finance
African countries face multiple challenges including limited financial and technical capacity for scaling up clean energy solutions. Developed countries have a significant responsibility and opportunity to help the continent scale investments in clean energy sectors by enhancing access to finance. To date, they have not risen to the challenge as too little support is provided to assist African countries in meeting the climate crisis.
According to the Organization for Economic Co-operation and Development, African countries received just over a quarter – an average of $19.5 billion annually – of the total climate finance from developed to developing countries between 2016 and 2020. However, there is a significant financing gap. Based on the Nationally Determined Contributions submitted by African countries, the investments required are about $2.8 trillion between 2020 and 2030. Of this, almost 66 percent is needed for implementing mitigation-related actions (see Figure 3), and the remainder is for adaptation needs.
At COP27 and the US-Africa Leaders’ Summit in December, the U.S. will have an opportunity to deepen its technical and financial support to Africa’s climate and clean energy plans. The Biden administration should increase support for renewable energy, with an emphasis on universal energy access, energy efficiency, and local renewables-based energy transitions that provide net positive benefits for the labor force and communities most impacted by fossil fuel phaseouts.
Last year, at COP26 in Glasgow, the governments of France, Germany, the United Kingdom, the United States, and the European Union agreed to help mobilize $8.5 billion in the first phase of financing for South Africa’s decarbonization efforts under a “Just Energy Transition partnership” (JETP). The goal of the JETP with South Africa is to accelerate its phaseout of coal-fired power generation by incentivizing the flow of clean energy investments while addressing related social concerns, such as job re-skilling. South Africa recently put forward the contours of its JETP investment plan. The U.S., along with other supporting countries, must ensure a truly just and inclusive JETP with the South African government. Delivering an ambitious deal with highly concessional finance for South Africa can establish a successful framework for financing other JETPs.
Implement international energy guidance across all U.S. agencies working in Africa
The U.S. provided more than $9bn for oil and gas projects in Africa between 2016 and 2021, committing just $682m to clean energy developments including wind and solar over the same period (see Figure 4). Projects in Africa made up 68 percent of all U.S. international fossil fuel energy funding between 2016 and 2021.
The Biden administration made a series of commitments toward ending international public finance for fossil fuels last year at COP26. That included signing onto the Glasgow Statement to end new direct public support for international unabated fossil fuel use by the end of 2022 and shift this into public clean energy finance. The U.S.’s interim international energy guidance issued following COP26 details how these promises will be implemented, and should be made publicly available for the sake of transparency and wider awareness. Going forward, the administration needs to ensure full implementation of the guidance across all its agencies engaged with providing necessary support for clean energy projects overseas. At the heart of the U.S. international energy strategy is to lead with clean energy first so resources freed up from fossil fuel financing can now be geared towards increased investment in Africa’s renewable energy future.
Plans for fossil gas expansion are incompatible with a climate-aligned investment strategy in Africa
According to the IEA’s Net Zero Emissions scenario, unabated gas-fired generation should start to decline later this decade, and gas-fired power plant generation is cut by 90 percent by 2040 compared to the 2020 levels.
African civil society leaders have clearly articulated the risks of expanding fossil gas infrastructure and production in Africa, calling out recent attempts to greenwash fossil gas as clean energy, despite the harmful impacts on climate, health, and air quality. African climate activists called fossil gas a “dangerous distraction” for Africa.
The recent push for new production of fossil gas for exports would not help meet Africa-wide domestic energy access needs. It could instead be a lost opportunity to use international climate and clean energy investments for leapfrogging the continent to an affordable and sustainable development path. An International Renewable Energy Agency report shows that renewables and other energy transition-related technologies have already created 1.9 million jobs across Africa. Clean energy benefits to communities and economies are likely to grow noticeably as investments scale up in the renewables and other ancillary sectors.
Developed Countries Need to Rapidly Ramp-up their Renewable Energy Strategies for Africa
Without low-cost, local clean energy technologies driving development in Africa, the long-term negative economic impact from expensive and dirty energy mix is likely to derail climate ambitions continent-wide. Analysis shows that for African countries, warming more than 2°C (3.6°F) means a loss of GDP of nearly 5 percent per year by 2030. Hence, it’s vitally important for the U.S. government and other developed countries to support Africa in reaching its goals for accelerating clean energy access and necessary clean energy infrastructure build-out. The Biden administration must prioritize – at COP27 and beyond – providing the necessary tools for Africa to equitably decarbonize and sustain its economic potential in the face of rising climate impacts. At COP27 and beyond, leaders need to show that they support Africa’s efforts at achieving 100% energy access and building the required infrastructure for rapidly scaling up renewable energy capacity.