Sun, Jun 18, 2023 page9

• How Africa could become a climate savior

  • By Lara Williams / Bloomberg
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  In the climate change discourse, Africa is typically cast as a victim. What if it could instead become a hero?

  The continent is suffering the consequences of a climate emergency, despite bearing little responsibility for the carbon emissions that have caused it. As of 2021, Africa had contributed just 2.8 percent of the world’s cumulative carbon dioxide emissions. For context, the US is responsible for about 25 percent.

  Africa faces extreme heat, food and water insecurity, increased diseases and changing weather patterns. Collectively, African economies have been losing 5 to 15 percent of annual per capita growth in GDP because of climate change.

  However, some envision a different path for Africa, in which investors place its 54 countries at the heart of a green industrial revolution. The continent has three things going for it: a young workforce, abundant natural resources and the potential for renewable energy.

  Among the optimists is Africa Climate Ventures cofounder and chief executive officer James Mwangi. His company’s investments include KOKO Networks Rwanda, a start-up that aims to provide clean cooking fuel at a price that undercuts charcoal, and Great Carbon Valley, a developer hoping to harness Kenya’s renewable resources for green industry and technical carbon dioxide removal methods.

  While projects have initially focused on the east of the region, Mwangi says there is scope for transformation across the continent.

  To achieve climate-positive growth, three elements are needed. First, Africa needs to circumvent emissions-intensive technologies for its own production and consumption. Compared with developed nations, there is less need for retrofitting simply because things have not been built or bought yet.

  For example, many African countries do not have advanced concrete and steel industries, meaning that nations can start with low-carbon facilities.

  Second, Africa can accelerate global decarbonization by hosting more of the world’s energy-intensive industrial processes and powering them with renewable energy.

  For example, Kenya estimates it has about 10,000 megawatts of geothermal energy potential, but just 950 megawatts of capacity installed.

  “You literally have countries importing coal from Africa alongside iron ore from Africa to turn into steel somewhere else,” Mwangi said. “Why not do an electrolysis-based process right here? Leave the coal in the ground and save the shipping fuel while you’re at it.”

  Those renewable energy opportunities and plentiful natural resources are partly why the third element — scaling up carbon dioxide removal — could succeed.

  In Ghana, biochar — a charcoal-like substance, which is a stable form of carbon and can be used as fertilizer, made by heating waste biomass in a container with no oxygen — can help cocoa farmers. With ideal geological conditions for carbon dioxide storage, Kenya could host direct air capture hubs in the Great Rift Valley.

  With 77 percent of the population of sub-Saharan Africa lacking access to electricity, it might seem odd to focus on connecting industry and carbon dioxide removal to the grid rather than people.

  However, doing the former should lead to the latter. The problem is that African economies are over-leveraged, particularly with rising interest rates, meaning they cannot commit the money to invest in more capacity for their grids.

  There is no visible demand, Mwangi said.

  “You can say, well, we’ve got all these people without electricity, but do they have money right now? You could say they’ll have money once they have electricity, but you can’t lend on that basis,” he said.

  A potential solution to this conundrum is providing industrial anchor demand for grid expansion, taking financial risk out of the investment.

  The key would be in thoughtful and fair project design — for example, by allowing the grid to allocate 20 percent of a project’s power output to new areas.

  There is also the potential to make energy more affordable. In Kenya, electricity comes at a premium because demand is volatile and consumers end up paying for idle capacity. Increasing demand spreads the costs over more payers and improves efficiency.

  Africa faces huge capital costs to deploy renewable energy sources and other low-carbon technology. Despite the enormous potential, it has seen little of the world’s clean-power investment.

  Addressing this is key. One option is for multinational development banks such as the World Bank to take a larger role in financing or insuring these investments. Regulators need to ensure carbon markets, seen as an important source of financing for the continent, are fair, transparent and work to deliver credible benefits.

  Western climate protectionism is a potential threat. The US Inflation Reduction Act risks unintentionally killing off pathways for Africa, supporting only domestic supply chains. Excluding, say, Tanzanian green steel from subsidies would extinguish an opportunity for sustainable development and fence off a trade partner.

  Environmental justice also needs to be considered — there have been examples of green transition projects around the world associated with land grabs and human rights abuses.

  However, there are also examples of how to do it better, such as Kipeto Energy, a Kenyan company that offers landowners 1.4 percent of the gross annual revenue generated by wind farms. That can translate to US$12,000 annually for each wind turbine on their land.

  If investors and developers take a responsible, people-centric approach, with high standards and strong community engagement, African nations could enjoy climate action coupled with rising living standards. With the world’s remaining carbon budget to stay below 1.5°C of warming rapidly diminishing, green African growth is an opportunity for all.

  Lara Williams is a Bloomberg Opinion columnist covering climate change. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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