Part 1: Why 2021 was a watershed year for Africa and climate diplomacy
Africa has become a critical voice in climate negotiations in the last decade and has played an important role in advancing the agenda. This year has realised huge progress for the continent, which finds itself at the intersection of development and climate change.
Negotiations remain painstakingly slow as nations weigh their economic interests against the damage climate change will wreak on the world. But, increasingly, countries are willing to compromise and consider options that just a decade ago would have been unthinkable, such as phasing out coal.
More importantly is that climate diplomacy is finally mobilising funding at the highest possible level after decades of promises, many of which were not kept. Developed countries agreed in 2009 to contribute $100 billion a year in climate finance to poorer countries by 2020. But the target was not met, in part because of the Covid-19 pandemic.
But 2021 showed decisive progress. Climate finance is now top of mind, and climate deals made this year are much more substantial than those of days gone past.
This week’s meeting of G7 finance ministers proved that climate change is now a serious discussion point in high level economic and finance deliberations. The US Treasury said in a statement that the ministers discussed the macroeconomic implications of climate change and G7 technical work “to better understand climate mitigation efforts”.
In July a better commitment to mobilising finance was already evident at the G7 nations summit in Britain, where leaders agreed to step up action on climate change and renewed a pledge to raise $100 billion a year to help poor countries cut emissions.
The leaders also promised to help developing countries move away from coal with real financial commitments, setting the stage for South Africa’s watershed multibillion-dollar climate finance deal.
The G7 – which includes the UK, US, Canada, Japan, France, Germany and Italy – committed to keeping the projected global temperature rise at 1.5 degrees.
In the final statement they said: “We reaffirm the collective developed countries goal to jointly mobilise $100 billion a year from public and private sources, through to 2025.”
The G7 committed to end the funding of new coal generation projects in developing countries and offered up to $2.8 billion to stop using the fuel.
South Africa was a guest at the G7 summit, together with India, South Korea and Australia.
Because of the apparent strong G7 commitment, much was expected at the G20 in Italy, scheduled just before the climate negotiations at COP26 in Glasgow, Scotland. The G20 summit happened the weekend before the climate talks started, and thus climate change was always going to take centre stage.
Yet the summit delivered a somewhat weak outcome on the back of the high expectations. Some observers were buoyed that the G20, made up of the world’s major economies, moved the Paris Agreement goalpost of when nations should reach net-zero emissions to more ambitious targets: from the “second half of this century” to “by or around mid-century”. But they failed to give a definite year in their final official statement.
The G20 is an important group because many of its members helped fuel climate change over the past century, through greenhouse gas emissions during their industrialisation drive. The group accounts for more than 80% of the world’s gross domestic product, 60% of its population and an estimated 80% of global greenhouse gas emissions.
The official statement after the meeting said that leaders of the world’s richest economies have agreed to pursue efforts to limit global warming with “meaningful and effective actions”. A commitment to phase out coal emerged as well, though the summit was vague on a timeline.
Countries agreed to stop financing overseas coal plants, tackle methane leaks and take greater action this decade to limit global warming. Leaders, however, could not set a precise date for phasing out fossil fuels and reaching net-zero emissions.
Observers were glad to see some form of commitment coming out of the weekend talks, however small, and – crucially – that the talks between G20 leaders themselves had not broken down.
Neither China’s President Xi Jinping nor Russia’s Vladimir Putin attended the summit in Rome, which weakened the outcome.
COP26 and the Glasgow Pact
While last-minute changes watered down a commitment to end coal, the climate talks at COP26 still delivered a deal that has been labeled as keeping the dream of 1.5 degrees alive.
After negotiators worked overtime to come up with an acceptable deal, countries agreed to a climate pact that would keep the world within reach of the goal of limiting global heating to 1.5 degrees. Although coal emissions were included in the so-called The Glasgow Pact there are more fraught nights of talks lying ahead.
A deal was ironed out amid squabbles over measures of phasing out coal, emission pledges and providing money to the poor world through a loss and damage financial mechanism.
The 1.5 degree goal was the big dream of COP26’s hosts the UK.
The talks once again showed that many countries simply still can’t afford the cuts to their economy that a 1.5 degree commitment needs, while others are terrified of the hardship the cuts will bring to their economies. But they also know that the cuts have to be made to avert a climate crisis. What the conference showed was that rich countries are increasingly willing to help fund poorer countries’ move to a greener economy.
The Glasgow Pact also includes a commitment to return to the negotiating table in Egypt next year with a plan on how countries could do better.
The pact also expects parties to the Paris Agreement to increase their pledges by 2022 instead of in the middle of the decade. It also envisages new Nationally Determined Contributions (NDC) – or emission pledges – specifically on 2030 goals next year, and then NDCs on 2035 goals in 2025.
The Economist described COP26 in Glasgow as delivering in three ways: “by changing timetables, by tweaking financing arrangements and by allowing for greater multilateralism.”
South Africa’s Just Energy Transition Transaction
The watershed multibillion-dollar climate finance deal announced at COP26 remains one of the highlights of the year in climate financing. The deal made South Africa a star performer on the climate diplomacy world stage, setting the scene for the country to transition away from coal to cleaner forms of energy. The deal is also being hailed as an example of how to structure similar climate finance deals for other developing countries.
South Africa committed to ambitious targets at COP26 in order to attract billions in climate funding from wealthy nations. France, Germany, the United Kingdom, the United States and the European Union pledged R131 billion to South Africa over the next three to five years in the form of grants, concessional loans and investment and risk-sharing instruments, including mobilising private sector funding.
In return for the funds, South Africa’s state-owned power utility Eskom will close down its coal power stations before the end of their normal lifespan, over the next 15 years. The funds will also assist Eskom to build a strong renewable energy sector. Apart from funding Eskom’s transition, South Africa will also use the funds to build a green hydrogen sector and help shift the nation’s transportation to electric vehicles.
European Green Deal
The European Union’s (EU) also launched its Green Deal in July, the EU’s main new growth strategy to transition the EU economy to a sustainable economic model. With this deal Europe will become the first climate neutral continent by 2050.
But this European Green Deal also presents a challenge for African economies. Analysts have warned that even though the deal is mainly an internal policy instrument for Europe, its potential global spillovers will reach African countries in view of the strong ties between the continents. As part of the plan, a Carbon Border Adjustment Mechanism would effectively apply a tariff on carbon-intensive goods coming into the EU, and this could potentially hurt African farmers.
Africa is sure to feel the effects in agriculture, fossil fuels and other natural resource markets. African countries will see a decline in European demand for fossil fuels in their markets, but might benefit from the rising demand for cobalt, nickel, and other critical minerals needed for the energy transition. But ultimately Africa’s agriculture will be most affected.
Africa tackling African environmental issues
On home soil, African countries are upping their climate change game with strong talks between nations. This was evident at the 18th session of the African Ministerial Conference on the Environment, where 54 African environment ministers agreed to step up the continent’s response to accelerate the green and sustainable recovery programme to tackle the triple crisis of climate change, loss of biodiversity, and pollution.
In a statement after the conference the ministers reaffirmed their commitment and efforts to recover from the impacts of the Covid-19 pandemic by prioritising green and sustainable recovery measures that can deliver mutual benefits for social, economic, and environmental resilience.
The ministers committed to ensuring an effective multilateral approach for addressing climate change through the United Nations Framework Convention on Climate Change, its Kyoto Protocol and the Paris Agreement. They also reiterated their commitment to ensuring its implementation in line with the principles of the Convention, while emphasising equitable access to sustainable development, poverty eradication and recognition of the specific needs of African countries.
At the high-level conference, held virtually under the theme “Securing people’s well-being and sustainability in Africa”, the ministers called for a people-centred recovery that accelerates job creation and improved livelihoods.
To accelerate a green and sustainable recovery plan for Africa, the online platform for the African Green Stimulus Programme (AGSP) was officially launched at the conference. The platform will offer a comprehensive gateway for governments, development partners, communities, and stakeholders to access information and knowledge.
“The African Green Stimulus Programme is a key step in taking advantage of this opportunity. The programme hits all the right notes: climate action, air quality, land restoration, biodiversity, the blue economy, green cities and so on,” said Inger Andersen, executive director of the UN Environment Programme, after the conference.
Connecting with China
China has also strengthened its climate partnership with Africa, becoming one of the continent’s biggest climate funders. At COP26 China tried to position itself as a chief representative of the developing world and a champion of Africa.
Statistics supported that China was pulling more financial weight, providing much more funding for green infrastructure. About 31% of green infrastructure in Africa involved Chinese investments, research showed.
At the eighth ministerial conference of the Forum on China-Africa Cooperation in Dakar in late November, a critical Chinese support programme came into focus: the green development programme.
China reiterated it would undertake 10 green development, environmental protection and climate action projects for Africa, support the development of the “Great Green Wall”, and build in Africa centres of excellence on low-carbon development and climate change adaptation.
Read part 2 of this article. Looking forward to 2022