To be fair, the European parliament designated investments in natural gas and nuclear energy as climate-friendly in July 2022, months ahead of COP27. But it is doubtful that this would have been the case had Europe not been in a bind with finding gas very quickly to make up for lost Russian supply. COP27’s approval of lower-emission energy sources like natural gas removes key constraints on investors in the continent’s gas resources.
Until the Russia-Ukraine war disrupted Europe’s gas supply arrangements, oil and gas majors had stopped funding new fossil fuel projects in Africa and elsewhere. Without such funding, Africa’s oil and gas reserves which are as yet unexplored will remain in the ground, with huge implications for the continent’s energy security and economic development. African climate activists disagree, arguing that what has been extracted from the continent’s fossil fuel resources thus far has not been particularly to the benefit of a still energy-starved continent, since they are largely exported to rich countries, preferring instead that the continent put more impetus in transitioning to renewable energy.
Defendants of the use of fossil fuel, on the other hand, argue that renewable energy sources remain intermittent, weather-dependent, and are still not capable of baseload power, while natural gas is well-suited for providing baseload power support to a green-dominant energy mix till when the identified drawbacks of renewables are overcome.
Road to climate reparations begins
Despite conflicting considerations, Europe largely came through for Africa at COP27 in Sharm El Sheik, Egypt, which in addition to announcing over 1 billion euros in funding for climate adaptation projects in Africa, pushed for a loss and damage fund for climate-related disasters in poor countries. This UN-backed arrangement for climate reparations was hard-won at COP27, after an extension of negotiations by about 2 days enabled a compromise to be reached with ambivalent key actors like the United States, China, and even Europe at the outset. Still, much of the detail remain to be agreed, and thus will be part of the agenda at COP28 next year in Dubai, United Arab Emirates, and likely a few more COPs after that.
Read also: Post-COP27: Whither African agenda? (1)
It is not all too clear what the size of the fund would be, for instance, or who will fund it for that matter. What counts as loss and damage from climate change, for instance, which by estimates of the Vulnerable Twenty (V20) Group total about US$525bn already for the world’s most climate-vulnerable countries over the past two decades (2000-19), and account for loss in their economic growth of about 1% on average. For Africa specifically, losses to climate change erode 5-15% of the continent’s GDP per capita growth potential, according to the African Development Bank, which also estimates US$1.6trn worth of climate financing will be needed in 2022-30 if Africa is to meet its nationally determined contributions (NDCs).
Rich countries worried that a loss and damage fund that will be statutorily funded by them would potentially expose them to trillions of dollars worth of liabilities on damage caused by historical emissions that allowed its economic development. They also argued, especially the European Union, that China, which though still classified as a developing country, was rich enough to be a contributor to the fund. Besides, the United States believed existing financial arrangements like the Least Developed Countries Fund and the Special Climate Change Fund sufficed for climate-related disaster payments.
In the end, they all came around to setting up a dedicated loss and damage fund that allows for broad-based voluntary financial commitments by governments and private entities, with details to be hashed out in due course. Even so, this is a big win for developing countries grappling with the effects of the global emitters’ environmental excesses, which had been clamouring for climate reparations over the past two decades.
Edited article was first published by the Italian Institute for International Political Studies (ISPI) in Milan, Italy. See link viz. https://www.ispionline.it/en/publication/post-cop27-whither-african-agenda-113480
