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HomeAfrica-NewsGas casts a long shadow on green development in Africa

Gas casts a long shadow on green development in Africa

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Comment: At Cop27 in Egypt, a race for gas risks distracting from supporting climate resilience that Africans really need

Here in Egypt, at the Cop27 climate talks, attendees are on the receiving end of a barrage of Africa-focused announcements.

Africa, where climate vulnerability is higher than in any other region. Where renewable energy deployment is receding and where, despite having 60% of the world’s solar resources, we are only home to 1.7% of global investment in renewable energy.

We Africans know that we are vulnerable to climate change, because many are still intrinsically dependent on the land for their livelihoods. And we can feel the climatic shocks: drought in the Horn of Africa. Floods in Nigeria. Cyclones in Madagascar.

We are already dealing with reduced food production, reduced economic growth, increased inequality and poverty, increased human morbidity and mortality, and vast loss of biodiversity, all of which will intensify and worsen as temperatures rise.

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Limiting global warming to 1.5°C is critical for development, with clear economic benefits from an emerging low-emissions pathway for Africa by 2030. The International Renewable Energy Agency (Irena) estimates that, compared to current plans , a path to 1.5 °C would generate an additional 6.4% increase in GDP growth by 2050, 3.5% more jobs and a 25.4% higher welfare index.

But in the current energy crisis, lobbyists, companies and governments are pushing another option: gas.

At Cop27, a significant minority of delegates seek gas deals, with development as the moral justification. The reality is that African governments take on outrageous debt to subsidize companies in the global north seeking to make a profit, while the local population bears the brunt.

white elephants

If African countries invest in fossil fuel infrastructure, they risk locking up high emissions, burdening their economies with stranded assets, and potentially missing out on significant economic opportunities to invest in renewable energy and green hydrogen, both for domestic use and for export.

Most of the revenue generated by fossil fuel projects goes to multinational companies, not to the countries where they are generated. In Nigeria, Africa’s largest oil producer, 55 million people still do not have access to electricity: it has the largest number of people in extreme poverty in the world.

Another example is Mozambique, where the government has gone into debt ahead of promised future tax revenues from LNG development.

This can exacerbate the debt burden of developing countries, worsen poverty and increase dependence on international aid.

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A study by McKinsey shows that African oil and gas fields are 15-20% more expensive to develop and up to 80% more carbon intensive than other fields globally. New African LNG faces significant competitive pressures, if not disadvantages, from established producers or producers with inherently lower cost structures.

LNG manufacturers want to take advantage of high world prices for their product, which creates serious difficulties for domestic access to cheap gas.

Is there room for more gasoline? The International Energy Agency’s (IEA) 1.5C-compliant Net Zero roadmap projects that African LNG exports would need to peak by 2025 and start falling to low levels by 2030.

In this scenario, total African gas production would also have to peak around 2025 and fall below 2010 levels by the mid-2030s. Importantly, the IEA scenario has a significantly greater gas than many other Paris-compatible pathways through the 2030s: It is clear that if the world implements the Paris Agreement, the prospects for ongoing markets for new gas from Africa are not great.

Barriers to clean development

To achieve the sustainable development goals, sub-Saharan Africa needs increased investment in renewable energy. IRENA shows that the region, which accounts for around 14% of the world’s population, received only around 1.7% of global investment in renewable energy between 2010 and 2020.

The IEA says that 60% of energy investment in Africa will still go to fossil fuels in 2021, with total annual energy investment of around $90 billion.

The high perceived risks of renewable energy investments mean that investors require a higher rate of return. Projects face high financing costs, limited availability of long-term financing, lack of institutional knowledge, and must compete with the heavily subsidized consumption and production of fossil fuels in many countries.

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The average annual investment in fossil fuels in Africa in recent years is around 33,000 million dollars a year and in renewables 5,000 million dollars. In other words, the annual investment in fossil fuels is 6-7 times higher than in renewables.

The paradox? Renewables are already cheaper than coal and gas power plants in most African countries, but have not received the promised climate finance needed to finance the energy transition, while international support for fossil fuels continues.

Energy access and supply in Africa is not a black and white or decision making environment, but Africans are not here to be taken advantage of to further subsidize northern consumption habits.

This model is all too familiar to us. If developed countries are serious about supporting sustainable development in Africa, they must prioritize supporting climate-resilient infrastructure and generation.

Deborah Ramalope, a South African, is the director of the Climate Policy team at Climate Analytics.

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