This paper evaluates the changing landscape and closing window of opportunity for African petro-states to take advantage of their gas resources caused by the growing global recognition of the urgent threat posed by climate change, as well as the short-term demand for gas in Europe due to Russia’s invasion of Ukraine.
Greater commitment to climate action has led many countries and donor agencies to make plans to end financial support for petroleum extraction. At the same time, the European Union has been pursuing new sources of African natural gas to compensate for loss of supply from Russia. African countries face an unenviable dilemma of needing to foster economic development and industrial growth while mitigating the impacts they are likely to experience due to global climate change. To many policy makers, gas development and export is a bridge to achieving both of these aims. However, exploiting Africa’s gas reserves involves multiple trade-offs, uncertainty and significant transition risk, particularly as the adoption of renewable energy and the low-carbon transition gains speed.
Using models of two Paris-compliant scenarios developed for the African Climate Foundation, we argue that limiting global warming to well below 2°C or achieving net zero emissions by 2050, would lead to investments in African gas being ultimately value destructive. We find that current and aspiring African petro-states should be wary of accepting new risk associated with gas and gas infrastructure and are incentivised, whether or not they pursue gas exploitation, to embrace rapidly scaling up renewables in their energy technology mix.
