The former Director-General of the World Trade Organisation says that Africa must adopt united positions on finance and the energy transition if it is to succeed at Cop27 in Egypt.
Gravel-voiced and with eyes that miss nothing, Pascal Lamy is used to driving a hard bargain. As Director-General of the World Trade Organisation from 2005 to 2013, and prior to that as European Commissioner for Trade following a host of senior roles in banking and the civil service in both the Eurozone and his native France, Lamy cut his teeth in some of the world’s toughest policy arenas. Now on the board of the Mo Ibrahim Foundation, one of the pre-eminent African voices on policy, governance and leadership, he has turned himself to the greatest challenge of our time: climate change.
An African position on climate change
The 27th UN Conference of the Parties (COP27) is in Egypt in November; the fifth instalment to be held on the African continent since the annual COP framework was adopted in 1995. As much as has changed since the last African COP in Morocco in 2016 – Covid-19, recession, war, food and fuel crises, democratic backsliding, and the rapid escalation of climate change impacts – some things appear eternal. For one, the ‘elephants’ that dominate global decision-making; China, the EU and North America among them, Lamy says, will roll Africa at Sharm-el-Sheikh unless the continent puts forward a “clear, single, strong African position.” He would see it made of two planks.
First, he says, is Africa’s unique economic situation. As simultaneously the poorest and most climate-exposed continent on earth, Africa faces its own constellation of risks. It must secure rapid and resilient quality of life increases alongside pragmatic contributions to the fight against global warming.
“Africa’s main problem is not reducing its carbon emissions,” he says. “This is the European problem. This is the US problem. This is the Chinese problem. The main problem for Africa is to adopt a trajectory of growth that factors in properly the energy needs of this growth and then the greening of this energy.”
“This, I think, is not well understood. Africa’s population is going to double by 2050, which is the time we have adopted for net zero carbon economies. Africa’s energy needs will grow, Africa’s energy consumption will grow, and then the question is how can Africa best manage this trajectory, of course boosting its potential for renewable energy production, but also accepting that…there has to be a transition.”
Gas: Africa’s saviour or just one piece of the puzzle?
Here, inevitably, comes natural gas. A flashpoint at COP26 in Glasgow, where 39 countries including most of the G7 pledged to phase out public financing for international fossil fuel projects, gas has ruled the agenda ever since. In large part this is due to Russia’s invasion of Ukraine, which sent importers scrambling for alternate supplies and upended global energy markets. It also reflects the belief in some quarters that gas can act as a ‘transition fuel’ between the dirty status quo and the net-zero world to which ever-greater numbers of countries are committing. The EU, for example, voted in July to include gas in the regulations promoting access to private sustainable finance, standing firm against anger and accusations of greenwashing from bankers, investors, activists and some member countries.
This “transition” rationale, combined with the prodigious reserves of a handful of African countries and the crippling energy access deficits that have left half a billion people on the continent without reliable power, has seen many proselytise that gas could be Africa’s lifeline. Lamy himself is no zealot – “I’m not saying gas is the panacea. The panacea is pricing carbon and developing renewables” – but he does firmly believe that excluding Africa’s gas from global markets “will not work”. He draws on the EU vote to highlight the disconnect between the words and actions of the global North – “it would be incredible…if what is good for the European Union would be deemed bad for Africa” – and places the issue in the context of a larger argument over whether Africa will have access to the finance it needs to meet its economic, environmental and developmental goal.
“The real problem…is whether financial systems, financial markets, whether public money or private money should still invest in gas. The finance gap, in my view, in the case of Africa is the major problem. Which is why this gas issue has in a way a role that may be larger in [terms of] the politics of the problem than in the technicalities of the problem. It is a test of whether or not there will be enough finance for Africa to move forward.”
“We know, whether we like it or not, that the capacity of African countries to mobilise African savings for long term investments is weak and that’s a structural problem. As a consequence, it needs finance coming from elsewhere.”
A major point of contestation has been whether Africans will actually be the ones to benefit from new gas projects on the continent. According to a recent BankTrack, Milieudefensie and Oil Change International report, just one-third of future African oil and gas production is controlled by African companies. The lion’s share is owned by companies headquartered in Europe, Asia and North America. With prices to remain sky-high for the foreseeable future, critics point out the real risk that African gas is simply siphoned away to international markets, benefitting foreign shareholders and consumers and neglecting the continent’s own needs. On this, Lamy is agnostic: “markets should decide.”
He does concede, however, that in the long term a more rounded solution to Africa’s environmental and energy woes will need to be found. “If there is one big problem on the trajectory of Africa being zero carbon by 2050…the big problem is infrastructure. The big problem is energy risk. The big problem is transport systems, not just of energy but also of other goods and services. For Africa, the balance between mitigation and adaptation is different from what it is for the EU, US or China. This has to be looked at as a whole.”
Africa leading the way
The second key aspect of Africa’s position at COP27, according to Lamy, is the immense contribution the continent already makes to the global carbon ledger. Africa, he says, is an enormous sink, with its forests, wetlands and lakes removing vastly more carbon from the atmosphere than its cities, towns and villages put in.
Not to mention the extraordinary concentrations of minerals such as nickel, graphite, cobalt, lithium and coltan that can be found in many African countries. Zimbabwe, for instance, boasts the second-largest platinum deposit on earth, while the Democratic Republic of Congo accounted for 70% of global cobalt production in 2019. Notwithstanding the crucial importance of natural resource governance in Africa’s coming mineral boom – which Lamy says is improving, “not least because populations are asking for it” – these resources will be essential for the manufacture and deployment of low-carbon technologies across the world.
The combination of economic urgency and environmental exposure, with an outsized role in supporting global climate solutions, is a potent mix. It is not, however, Africa’s alone. While Lamy concedes that the continent faces a difficult task at COP27 – “the international system today is in terribly bad shape” – he thinks the shared experience of nations across the global South portends a negotiating bloc that could have profound implications if push comes to shove.
“Africa will find allies in pushing for its specific needs in, for instance, the Caribbean region, which has roughly the same problems. In the Pacific islands region, which has roughly the same problem. These are not big tickets, but at the end of the day, in something like a COP…the number matters.”
As for Africa itself, Lamy leans on his decades of experience in the trenches of multilateral policymaking. “This is a place where Africa fights [for] its own corner.” Expect fireworks in Sharm.