Africa fears backsliding on climate action amid global crises

In depth
This article is part of the dossier: Africa and the economic storm

By Julian Pecquet
Posted on Thursday, 13 October 2022 12:45

A woman stands at her front door after heavy rains caused flood damage in KwaNdengezi, Durban,
A woman stands at her front door after heavy rains caused flood damage in KwaNdengezi, Durban, South Africa, April 12, 2022. REUTERS/Rogan Ward

Exasperated African finance officials are using this week’s World Bank and IMF meetings to press their richer counterparts to deliver on aid promises as concurrent shocks cause global backsliding on climate action.

Meeting on 12 October just weeks before the COP27 summit in Egypt, the Coalition of Finance Ministers for Climate Action offered countries most affected by rising temperatures a chance to vent their frustrations. As the rich countries continue to fall far short of their promise to provide $100bn a year to poorer ones, rising energy prices since Russia’s invasion of Ukraine have only reinforced reliance on fossil fuels.

“What we’ve been discussing is new and innovative ways that must be explored to enable us to meet the transition to net-zero commitments,” Nigerian finance minister Zainab Ahmed tells The Africa Report. “[…] for us African countries, we’re emphasising the need for developed countries to meet the commitments that they made [in the 2015 Paris accord] and also for the whole of the financing community to make sure that there is an adequate mix between financing for adaptation as well as for mitigation.”

The commitments have not been provided and yet we’re all being pushed to net zero.”

The coalition was formed in April 2019 with an initial 26 like-minded countries. It now has 78 members, with Cameroon, Djibouti and Mozambique joining after the previous ministerial meeting in April.

“For many years, climate change was a topic for environment ministers,” says Djibouti’s finance minister, Ilyas Moussa Dawaleh. “That’s no longer the case. What we are seeing is a global awareness about climate change and especially of the role of finance ministers.”

Two steps back

Speaking to The Africa Report after the meeting, Dawaleh bemoans promises “that are not always kept”.

“Developing countries that have hardly any impact on carbon emissions are paying the highest price, so this is a question of fairness, transparency, and respect of previous engagements. We’re headed toward COP27. How long are we going to continue to make empty promises?” he says.

We’re headed toward COP27. How long are we going to continue to make empty promises?

In a summary of the meeting, the coalition’s co-chairs Finland and Indonesia instead focused their criticism on Russia and its “unprovoked invasion” of Ukraine. They also noted that the “increasing frequency and cost of natural disasters adds further economic uncertainty”.

“Members of the Coalition acknowledge the potential risk of backsliding on our climate goals under pressure from current macroeconomic challenges,” the summary says. “Even so, we continue to view concerted and accelerated climate action as essential, and stress the need to move forward with the climate transition as part of our inclusive growth strategies while striving to cushion the economic impact on the most vulnerable.”

According to IMF Managing Director Kristalina Georgieva, rising energy costs should jumpstart the transition to cleaner options.

“While protecting the vulnerable, we must urgently use the opportunity of high fuel prices to move resources & accelerate green transition,” she said in a tweet after attending the meeting. “Otherwise, we are literally cooked.”

The backsliding is evident in Nigeria and Djibouti, where inefficient fuel subsidies account for a growing chunk of the budget as energy prices surge. Nigerian President Muhammadu Buhari signed legislation last year stipulating the removal of subsidy payments, but it was suspended ahead of next year’s elections.

“All subsidies are a pain for a lot of countries,” Ahmed says. “We really have to let them go because it’s taking critical funding that could have been applied to developmental projects as well as even to climate mitigation.”

“We have, of course, a lot of support from the World Bank, from the IMF, in terms of technical capacity [and] research into how other countries that have succeeded have done it. We’re taking advantage of all the opportunities.”

Asked whether it makes sense to remove subsidies when energy prices are high and the pain for consumers and businesses will be severe, Ahmed says the cost to keep them in place has also increased.

“There’s no right time to remove subsidies,” she says. “It will always be painful, but it has to be done.”

Options on the table

Meanwhile, the coalition co-chairs see a silver lining of sorts in the current crisis as it highlights “our vulnerability to fossil fuel dependence” on countries, such as Russia.

They recommend looking at a “full range of fiscal, market, and regulatory mechanisms”, including “green budgeting, carbon pricing mechanisms and incentives, well-designed expenditure and subsidy policies, regulatory policies, targeted public investment, and measures to incentivise investments in low-carbon technologies”.

“Taking into account the cross-border nature of green transition-related issues, such as energy markets, the design of policies at the national level will benefit greatly from regional and international exchanges,” the coalition co-chairs say. “Investment and private finance will play a central role in the transition, and as such, we need to continue to strengthen the enabling environment to further catalyse the involvement of our private sector partners.”

Different countries will have different levels of access to affordable financing, green technologies and renewable energy alternatives, the co-chairs say, but working together can help bridge the gap.

“Our chosen policy mixes will differ,” the coalition says. “Even so, by sharing and learning from each other in global fora, such as the Coalition of Finance Ministers for Climate Action, our policy making will be stronger, better informed, and more coordinated.”

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