COP Refocus Could Help Overcome Western and African Differences

If there had been any doubt, 2022 has shown that energy security trumps all issues but the most violent geopolitics. Governments across the developed world are paying whatever it takes to keep the lights on, homes heated and the economy running. Coal plants are back, with one of the most vocal proponents of the energy transition, Germany, re-opening five lignite power plants which cause more CO2 emissions than diesel.

The reminder that access to energy is a prerequisite for modern living is certainly not lost on developing countries, particularly in sub-Saharan Africa where 923 million people lack access to clean cooking and 568 million have no electricity. The spectacle of many of the 39 signatories to the COP26 statement that called for an end to public financing for fossil fuels outside their borders desperately scrabbling for gas supplies has reinforced an already strong perception in Africa that the ‘Western’ world does not recognise energy poverty and its impact on economies in Africa – which could easily be termed an emergency in terms of its consequences for lives and livelihoods – as worthy of the same consideration as the potential for blackouts in Europe.

The COP process has struggled since its inception to mediate between Western countries’ goals to reduce global emissions and prevent their own economies being undermined, and the demands of developing countries for support adapting to climate change and for the burden of emissions reductions to fall predominantly on wealthier, higher-emitting countries. Africa and small islands are at the sharp end of the debate, emitting the least while suffering the biggest impact and having the least resources to adapt.

The ‘African COP’ did deliver something for the continent, with a commitment to establish a new ‘loss and damage’ fund. While welcoming the emphasis on adaptation and new funds, African leaders will be well aware of the limited impact of existing climate funds, which are notoriously difficult and slow to access, and previous broken funding promises. With funding criteria still to be established, the devil will – as always – be in the detail. Several other initiatives were launched at the two-week climate extravaganza with the potential for some positive impact on the continent.

COP has taken on a life of its own and a momentum that sucks in many of the world’s top energy executives, media and civil society, as well as negotiators. The format, increasingly resembling a giant trade conference with negotiations attached, has attracted criticism. It has its benefits, bringing together stakeholders across the climate and energy spectrum, catching global attention, and serving as a launchpad for new initiatives, particularly for the host country. But it has failed to address fundamental questions about the relationship between climate mitigation and adaptation funding and other national priorities in developing countries. This is part of the cause of what Nigeria’s President Muhammadu Buhari called ‘simmering acrimony’ between Africa and the West in an op-ed in the run up to COP27.

Climate–Development Tensions

Tensions have come to the fore since the 2015 Paris Agreement as Western countries have used their leverage on the boards of multilateral development banks and their own bilateral development banks to reorient them towards addressing climate change. This can cut across national policy agendas in a way that Bretton Woods institutions in particular have been keen to avoid since the controversial Washington Consensus days, and is causing resentment and sometimes hostility in capitals and C-suites across the continent, as well as alarm within development institutions themselves. It is also feeding narratives promoted by some political and business groups labelling the process ‘climate colonialism’. The success of populist agendas in recent years shows the danger of ignoring these narrative contests.

New rules to safeguard the climate are in some respects similar to those covering gender and the environment, with every new project required to adhere to climate policies set outside of Africa. In some cases, investments will not only need to meet the relatively uncontested goal of fitting within a net zero strategy, but also to satisfy net zero portfolio requirements across multinational portfolios. The latter condition creates new barriers, with the potential for a gas power project in one country – funded according to financing rule exceptions – to impact an institution’s ability to fund a gas power plant in another country, which might also fit exceptions criteria. Multilaterals are no longer able to invest in upstream gas – where they have played a key role in developments like Sankofa in Ghana, which allowed the conversion of around 1GW of power plants from light crude oil to gas, significantly reducing emissions – and bilateral development banks are increasingly constrained in their ability to fund gas power plants.

Contradicting this ongoing policy agenda, energy security concerns have driven European countries back to Africa – notably Nigeria – although with little fruit to date outside of North Africa, where Algeria has increased supply to Italy. The continent has too often seen underinvestment in its oil and gas assets, meaning that many fields are declining. A number of mega-finds have the potential to meet a significant proportion of European oil and gas demand, but the investment timescale and European reluctance to sign long-term contracts for projects which will not begin operating for years remain a roadblock. It remains to be seen whether a broader assessment of long-term supply security in Europe will prompt a rethink, or if Africa will once again miss out to Qatar and the US.

The scramble for gas has already had negative consequences for Africa. The continent has several liquified natural gas (LNG) import projects in the works which rely on floating, storage and regasification units – large LNG tankers able to store and regasify LNG before piping it to shore. However, between them, Germany and Italy have taken up most of the global supply, and refitting LNG vessels takes time, contributing to delays for African projects. The spike in LNG prices and diversion of cargoes to Europe has also demonstrated to African leaders the risks of relying on the global LNG market rather than domestic or regional production.

Many African leaders in countries with hydrocarbons have been unequivocal about their desire to use domestic oil and gas resources to fuel growth – development of coal power plants has largely stopped due to funding pressures and high-profile construction failures. They argue that hydrocarbons underpin modern economic systems, from agriculture to transport and industry, as the only established supply chain and technology set currently available at scale. Not developing domestic resources leaves African countries reliant on imports to meet growing demand. In his op-ed, Buhari argued that using all of Africa’s known gas reserves would increase the continent’s share of global emissions from 3% to 3.5%, stating that ‘Africa’s future must be carbon-free. But current energy demands cannot yet be met solely through weather-dependent solar and wind power’.

Climate tensions increasingly influence geopolitical attitudes. Many African businessmen look towards China and India as the energy models to be followed, noting successes in reducing poverty, industrialising, and carving out space on the global stage for their agendas. Russia is sometimes admired for recognising national priorities and the importance of raw materials and hydrocarbons in its economy. China and India are aggressively building out electricity systems using all technologies available, from coal and gas to nuclear, hydropower and variable renewables. Their approach prioritises providing cheap and reliable power to businesses and industry across their vast territories, and they have had considerable success in that regard, while also transforming themselves into top global CO2 emitters. This contrasts markedly with the ‘leapfrog’ policy advocated – with the iron fist in a velvet glove of the global financial system behind them – by Western institutions, emphasising variable renewable power alongside battery storage, geothermal energy where available, and sometimes hydropower.

Bringing the Sides Together

COP needs a format that provides greater and more consistent focus on these complex issues, which might begin to break down perceptions of a climate/development dichotomy in some of the world’s poorest countries and better align African and Western interests. The world desperately needs global markets and standards for emissions trading, offsetting, and ‘green’ products such as low-carbon mining, steel and manufactured goods.

Workstreams addressing these areas have the potential both to add value for low-emissions industry in Africa – where many countries, particularly in East Africa, have exceptionally low emissions for grid electricity – and to protect decarbonising Western economies. 98% of Ethiopia’s installed capacity is renewable, as is 90% of Uganda’s and 76% of Kenya’s. Countries such as Nigeria which are currently completely reliant on natural gas and fuel oils have potential for hydropower, solar power trading with regional neighbours as well as domestic generation, and carbon capture. Globally recognised standards and trading schemes for low-emissions goods would give some African countries significant strategic advantages at the same time as incentivising low-emissions technologies and disincentivising high-emissions development pathways. This would allow decisions to be made in line with African governments’ overriding priorities: reducing unemployment and poverty and increasing economic growth.

Energy has for some time been recognised as being at the heart of Africa’s challenges in accessing the global trading system. The US’s flagship Power Africa programme was created with bipartisan support under Barack Obama to address the fact that eligible countries were failing to make significant use of the trading benefits of the African Growth and Opportunity Act. A trade mission found that African exporters lacked sufficient access to energy to produce competitively. COP could address this in ways that align incentives, particularly between the West and Africa.

Several ways forward have been proposed for COP, with most focusing on the need for a smaller and more focused forum, and some recommending that negotiations are separated from the main conference. The establishment of a number of smaller institutions addressing key areas, perhaps with annual ministerial meetings, could help build consensus between sets of countries on the rules of the game and add momentum to the global frameworks required to underpin climate action. But the main COP conference will retain a role. Such an all-encompassing issue requires participation by all stakeholders and global buy-in to high-level emissions targets, as well as the transparency brought by intense media scrutiny. The opportunity now is to reimagine the negotiation and technical processes in ways that reduce ‘simmering acrimony’ and the chances of ‘enshrining inequality of the highest order’, by rethinking the political climate compact with Africa in ways that support industrialisation and trade at the same time as reducing emissions.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

Have an idea for a Commentary you’d like to write for us? Send a short pitch to commentaries@rusi.org and we’ll get back to you if it fits into our research interests. Full guidelines for contributors can be found here.