By Chukwumerije Okereke
We are now a couple of weeks away from the United Nations’ Conference of the Parties 26 (COP26) in Glasgow, where critical decisions that will shape the future of climate governance will be made. As the continent least responsible for, and yet most vulnerable to climate change, African governments cannot afford to be complacent on the need for strong negotiating positions and astute diplomacy in order to get good outcomes from the UN meeting. Of the many issues of negotiation that concern Africa, climate finance has to be among the priorities.
We are aware that several months of pressure from climate advocates yielded significant climate finance pledges from world leaders at the recently concluded 76th UN General Assembly (UNGA) in New York. America’s President Joe Biden doubled the U.S. government’s climate finance pledge from $5.7 billion to $11.4 billion per year by 2024, and promised “a new era of relentless diplomacy of using the power of America’s development aid to lift people up around the world.” Boris Johnson of the United Kingdom touted his country’s pledge of £11.1 billion made at UNGA last year and indicated that the U.K. would be open to increasing its climate finance commitment at COP26 in Glasgow next month. On his part, President Xi Jinping of China promised to end coal finance abroad and indicated that China will instead increase its funding of clean energy around the world.
But while these new financial pledges are commendable, it is important that African leaders are not naïve or ignorant about a host of outstanding issues on climate finance in COP26, the outcome of which can either accelerate or hinder the climate-resilient and sustainable development of Africa. Here are some of the critical ones:
…despite the clarity of the rules, rich countries have long been repackaging their traditional ODA money as climate finance. There are several instances where funding that would ordinarily support energy, transportation, education, and agricultural development are now rebranded as climate finance and counted as part of the steps taken by rich countries to meet their climate finance obligations. This is simply akin to cheating.
The Issue of Adequacy. For a long time, rich countries have treated the $100 billion commitment as a high mark target, the fulfilment of which will absolve them of their climate justice responsibilities. The reality, however, is that the $100 billion pledged by rich countries is actually a tiny drop in comparison to what climate change is costing and will further cost developing countries. A study conducted by the U.K. Department for International Development, now part of the Foreign and Commonwealth Development Office, indicated that the cost of climate change to Nigeria reached about $100 billion in 2020 and would rise to $460 billion per year by 2050.
According to official figures, the 2012 flooding in Nigeria cost the country about $16 billion in direct and indirect damages. The cost of much bigger and subsequent occurrences, since 2013, have not been calculated. The World Bank calculated that the cost of Cyclone Idai, which devastated Malawi, Mozambique and Zimbawe in 2019, was $2 billion. These are just a few examples. So, while rich countries are still far away from meeting the $100 billion per year goal set, even with the new pledges, the truth is that the cost of climate change to Africa alone runs into trillions of dollars per year and several times over, if one includes the cost of climate change to the rest of the developing countries of the world.
So, while the euphoria that greeted the new climate change pledges is understandable, African governments must set their sight on getting rich countries that are responsible for climate change to increase their pledges in COP26. Furthermore, African leaders must press to see a vast increase in adaptation finance, which currently constitutes less than 25 per cent of the total climate finance. They should urge other countries to emulate Denmark, which has pledged to devote the equal amount of its climate pledge, to climate adaptation and mitigation.
The Issue of Additionality: In the first major text of the United Nations agreement on climate change, signed in 1992, it was agreed that the climate finance which rich countries need to provide to Africa and other developing countries around the world, should be new and additional to existing Overseas Development Assistance (ODA). The reason for this decision was that the climate change impact and adaptation measures pose incremental costs on the existing burden of development. As such, the UN Convention makes climate action in developing countries conditional on the “adequacy and predictability in the flow of funds” from rich to poor countries.
However, despite the clarity of the rules, rich countries have long been repackaging their traditional ODA money as climate finance. There are several instances where funding that would ordinarily support energy, transportation, education, and agricultural development are now rebranded as climate finance and counted as part of the steps taken by rich countries to meet their climate finance obligations. This is simply akin to cheating. It is, in fact, a travesty, especially given that developed countries have for a very long time been failing to meet the 0.7 per cent of the GDP transfer. It is therefore possible that the whole funding flowing to Africa can actually be far less than they could have received in the absence of climate finance. Current accounting and reporting measures are simply so opaque that it is actually hard for anyone to verify exactly how much rich countries are giving as climate finance.
The question that arises is whether these new promises of climate finance from rich countries will help to fund energy security in Africa, especially when they are most likely to come with tough conditionalities, including the defunding of coal, oil and gas investments? It is instructive that while many rich countries are pledging to stop investment in gas in Africa, many still retain gas as a part of their long-term energy portfolio.
The Energy Security Issue: Africa is energy impoverished. The total installed electricity capacity in Africa is 147 GW, equivalent to what China installs in one or two years. The whole of Nigeria has an installed capacity equal to that of London’s Heathrow Airport. Africa needs to increase its capacity by at least 6 per cent per year to stand a chance of meeting universal access by 2050. Unless this gap is closed, Africa will remain a dark and poor continent. The question that arises is whether these new promises of climate finance from rich countries will help to fund energy security in Africa, especially when they are most likely to come with tough conditionalities, including the defunding of coal, oil and gas investments?
It is instructive that while many rich countries are pledging to stop investment in gas in Africa, many still retain gas as a part of their long-term energy portfolio. It is also telling that China’s pledge to end coal production does not cover domestic coal, which accounts for well over 55 per cent of its domestic energy consumption. African leaders must therefore focus on how to unlock the scale of finance and investment needed to secure energy security for Africa now and in the years to come. Unless there is a radical change, over 40 per cent of e thAfrican population will still be cooking with dirty wood fuel, charcoal and animal dung by 2050. Making finance flows consistent with pathway towards low GHG emissions and climate-resilient development, is critical to meeting commitment of the Paris Agreement and the developmental needs of Africa.
External and Internal Transparency. A landscape of loosely defined, fragmented, unpredictable and opaque climate finance will not foster the end of climate insolvency in Africa but could rather impose new risks on all. Africa must ask for an increase in the overall amount of climate finance but also that a specific percentage devoted specifically to the continent. At COP26, Africa should ask for greater transparency and accountability to ensure that rich countries are not robbing traditional ODA to pay their climate finance bills. Beyond the COP, African leaders must vigorously reject climate finance conditionalities that seek to compromise the energy security of their countries, while at the same time showing demonstratable commitment to embrace renewables as the energy of the future. Africa must also invest its resources to develop capabilities in the manufacturing and deployment of renewable energy technologies to meet their growing energy demands. They must know that switching from dependence on the importation of fossil fuel from Europe to dependence on Chinese imported solar panels is not a good definition of sustainable green transition for Africa.
Chukwumerije Okereke is the Director, Centre for Climate Change and Development, Alex-Ekwueme Federal University Ndufu-Alike, Nigeria.