Source IISD: Original post here
Presented by the United Nations University’s Institute for Natural Resources in Africa (UNU-INRA)
This event launched a discussion paper that discusses Africa’s development in light of potential asset stranding, in the hopes of alerting African governments to the need for effective natural resource planning towards low carbon economies. The paper highlights the associated risks of stranding and impacts on mineral-rich countries in Africa, as well as the opportunities that lie in green transitions and economic diversification.
Youba Sokona, IPCC Vice-Chair, facilitated the session, noting that the Special Report on Global Warming of 1.5°C (SR15) indicates that limiting global warming has co-benefits for achieving the Sustainable Development Goals (SDGs), and underlined key messages of SR15, including: every bit of warming matters; every year matters; and every choice matters. Noting that socio-economic development and environmental concerns are at odds in Africa, he pointed to the clear political will to control emissions.
Fatima Denton, Director, UNU-INRA, introduced the report on Africa’s Development in an Age of Stranded Assets, noting that it alerts policy makers about an issue that has geopolitical and strategic importance and that will be essential for national planning now and in the future. Defining stranded assets as those that have become devalued or that countries are unable to monetize due to policy changes, disruptive innovation and/or social and environmental conditions, she highlighted the need to discuss the consequences for developing these “un-burnable” assets from a continent whose total emissions are less than 4% of the global total. Noting that Africa’s resources have been stranded since colonialism, Denton highlighted the report as a trigger for African governments to design the economies they want. On the issue of a just transition, she underscored that the continent will need to address the level of exposure to carbon market risk, burden sharing, and knowledge management to ensure more efficient and effective resource use.
Describing how some countries could make the energy transition, Bruk Tekie, UNU-INRA, pointed to land diversification to expand agriculture in Angola, and mineral planning in South Africa, which could push the country to the fore of the fourth industrial revolution (4IR), pointing to the fact that Africa holds 42 of the 63 elements needed for the 4IR.
Sokona then moderated the panel discussion. Jame Murombedzi, UNECA, emphasized that the relationship between production and exploitation of Africa’s resources is not determined by policies, but is historically linked to external interests including debt. Africa’s ability to disinvest in carbon, he concluded, is linked to its ability to pay off its debt.
Rose Mwebaza, Director, CTCN, highlighted that nationally determined contribution (NDC) targets of countries with high fossil fuel resources recognize the need to pursue other carbon pathways. She reported increasing requests to the CTCN for technological support for transitioning to low carbon economies.
Selam Kidane Abebe, Legal Advisor, African Group of Negotiators, reported on risks identified by the group, including: legal risks due to commitments to treaties; social risks attributed to job losses that would result from decarbonization; and economic risks due to the large scale of carbon related foreign direct investment in Africa.
Daria Ivleva, Adelphi, said stranded assets represent a double burden on countries through losses of revenue and decreased economic growth. She noted that fossil fuels are the fabric of many economies, driven by global market demands, and emphasized the need for exist strategies towards a low carbon transition.
In the ensuing discussion, panelists and participants considered, inter alia: the need to channel the benefits of resource exploitation to local communities; Africa’s place in the transition to renewable energy; the choices of sovereign states in their development pathways; engaging states in the just transition; foreign direct investments linked to fossil fuel exploitation in Africa; and the positive unintended consequences of stranded assets including a decrease in illicit financial flows. They also discussed, among others: the legal, economic and social implications of an energy transition, given countries’ contractual obligations to private fossil fuel companies; a managed fossil-fuel exit; future fossil fuel discoveries and risks associated with extraction in a 2°C world; the need for a managed, staggered transition for the continent; intergenerational discussions to ensure a just transition; and the need for more thoughtful, long-term national planning choices for development pathways.
James Murombedzi, UNECA