Today’s global energy inequities are staggering. Video gamers in California consume more electricity than entire nations. The average Tanzanian used only one-sixth the electricity consumed by a typical American refrigerator in 2014. Globally, the top 10% of countries consume 20 times more energy than the bottom 10%. And 1.1 billion sub-Saharan Africans share the same amount of power generation capacity as Germany’s 83 million people. At least half have no access to electricity at all. These stark energy inequalities are fueling thorny debates around financing Africa’s energy future as world leaders and their negotiators prepare for COP26, the United Nations climate conference in Glasgow, Scotland, in November. One increasingly common theme from wealthy countries – including those responsible for the majority of greenhouse gas emissions over time – is a vow that they will cease public funding for all (or nearly all) fossil fuel projects in less developed countries, even as they continue financing, and in many cases heavily subsidizing, fossil fuels in their own. It is generally easier for countries that offer overseas development finance for energy projects to make low-carbon rules for others, rather than for themselves. For example, China, Japan and South Korea – some of the world’s highest coal-consuming nations – have each recently pledged to stop funding coal projects overseas and increase investments in renewables. But they have made no equivalent commitments at home. The U.S. Treasury and the United Kingdom’s development finance institution, CDC Group, have taken a more nuanced approach. They are limiting all coal and oil-based power generation projects and leaving a narrow window available for natural gas projects in poor countries that pass a rigorous screening process. This is roughly similar to the approach of the World Bank. As experienced clean energy policy researchers, we believe the blunt exclusion of all nonrenewable energy projects from development finance is an inequitable and ineffective climate strategy that gaslights over 1 billion Africans. Tiny climate gains, major development losses Focusing on limiting the emissions of the world’s poorest countries while emissions continue to rise in industrialized countries is clearly misdirected in our view. Given stark inequalities in energy use and emissions, this could instead entrench poverty and widen inequality induced by worsening climate change, while simultaneously accomplishing very little to reduce global greenhouse gas emissions. Together, the U.S., U.K., European Union, Japan and Russia have almost the same population – 1.1 billion people – as sub-Saharan Africa, but 35 times more gas-fired power plants in operation or under development, and 52 times more coal plants. When it comes to carbon dioxide emissions, sub-Saharan Africa is collectively responsible for barely half a percent of all global emissions over time, while the U.S., U.K., E.U., Japan and Russia are responsible for more than 100 times that amount, or about 57%. The upper bound for Africa’s future growth in power sector emissions is also negligible. If the region’s electricity demand hypothetically tripled tomorrow, rather than doubling by 2040 as the International Energy Agency recently forecast, and if only natural gas was used to meet the new demand, annual global emissions would increase by only 0.62%, according to one estimate. That’s equivalent to the state of Louisiana’s annual emissions today. What’s more, the share of renewable power in many sub-Saharan African national grids is already higher than for nearly all the big greenhouse gas emitters. In at least six countries – Kenya, Ethiopia, Malawi, Mali, Mozambique and Uganda – renewables make up more than 50% of their annual generation. In 2018, hydropower, geothermal, solar and wind made up about 20% of the continent’s total power generated. Most of the region will find renewable power to be the fastest and cheapest way to expand their generation capacity, but some areas may still need to rely on some fossil fuels in various sectors of the economy as they develop. It has been clear for decades that the world needs to rapidly and aggressively cut its greenhouse gas emissions to keep global warming below 1.5 degrees Celsius and avoid the worst impacts of climate change. Many regions in Africa, including the Sahel and Mozambique, are already facing the effects of climate change, including worsening droughts, food insecurity and severe storms. Adapting to climate change and building resilience requires the very energy, economic development and infrastructure currently lacking in some of the most affected regions and those least prepared to adapt. Climate colonialism and legacies of colonization Other experts agree that this direction of climate policy is not just ineffective, it’s rooted in the historic inequities of colonialism. The philosopher Olúfẹ́mi O. Táíwò defines climate colonialism as the “deepening or expansion of foreign domination through climate initiatives that exploits poorer nations’ resources or otherwise compromises their sovereignty.” Colonialism’s legacy is a contributing factor to a wide range of issues, from conflict to corruption, and to the poor state of electricity access across much of Africa today. While industrializing nations in the 1900s were building electricity grids through massive public spending campaigns, like Franklin Roosevelt’s New Deal in the United States and the Electricity Supply Act of 1926 in the U.K., most of Africa was being actively pilfered of its rich natural resources. Much of the infrastructure built in colonial Africa during that time was built only to facilitate resource extraction operations, such as mined commodities, oil, timber, rubber, tea, coffee and spices. In 1992, a coalition of low-income nations successfully advocated for the U.N.‘s climate mitigation pathways to include their right to development, and a “common but differentiated responsibility” to address the dual problems of development and climate change. This language has long been the basis of equity considerations in climate policy, including in the 2015 Paris Agreement, which expects deeper emissions cuts from developed countries based on their “respective capabilities”. A transition from what? Nigerian Vice President Yemi Osinbajo recently described “energy transition” as “a curious term” when applied universally, given the energy shortfalls in countries like Nigeria. He has argued for an energy transition in which Africa can

  The government has unveiled a $1.9 billion package of investments in new and emerging energy and emission-reducing technologies, and reinforced its message that it is time to move on from assisting now commercially-viable renewables. The package will be controversial, given its planned broadening of the remit of the government’s clean energy investment vehicles, currently focused on renewables, and the attention given to carbon capture and storage, which has many critics. The latest announcement follows the “gas-fired recovery” energy plan earlier this week, which included the threat the government would build its own gas-fired power station if the electricity sector failed to fill the gap left by the scheduled closure of the coal-fired Liddell power plant in 2023. Unveiling the latest policy, Scott Morrison said solar panels and wind farms were commercially viable “and have graduated from the need for government subsidies”. The government was now looking to unlock new technologies “to help drive down costs, create jobs, improve reliability and reduce emissions. This will support our traditional industries – manufacturing, agriculture, transport – while positioning our economy for the future.” An extra $1.62 billion will be provided for the Australian Renewable Energy Agency (ARENA) to invest. The government will expand the focus of ARENA and the Clean Energy Finance Corporation (CEFC) to back new technologies that would reduce emissions in agriculture, manufacturing, industry and transport. At present ARENA can only support renewable energy and the CEFC can only invest in clean energy technologies (although it can support some types of gas projects). The changes to ARENA and the CEFC will need legislation. The government says it will cut the time taken to develop new Emissions Reduction Fund (ERF) methods from two years or more to under a year, involving industry in a co-design process. This follows a review of the fund, which is a centrepiece of the Coalition’s emissions reduction policy. The cost of the changes is put at $24.6 million. The fund has had trouble attracting proposals from some sectors because of its complex administrative requirements. Other measures in the policy include a new $95.4 million Technology Co-Investment Fund to support businesses in the agriculture, manufacturing, industrial and transport sectors to take up technologies to boost productivity and reduce emissions. A $50 million Carbon Capture Use and Storage Development Fund will pilot carbon capture projects. This technology buries carbon but has run into many problems over the years and its opponents point to it being expensive, risky and encouraging rather than discouraging the use of fossil fuels. Businesses and regional communities will be encouraged to use hydrogen, electric, and bio-fuelled vehicles, supported by a new $74.5 million Future Fuels Fund. A hydrogen export hub will be set up, with $70.2 million. Chief Scientist Alan Finkel has been a strong advocate for the potential of hydrogen, saying Australia has competitive advantages as a future hydrogen exporter. Some $67 million will back new microgrids in regional and remote communities to deliver affordable and reliable power. There will be $52.2 million to increase the energy productivity of homes and businesses. This will include grants for hotels’ upgrades. The government says $1.8 billion of the package is new money.

  Two important global events are coming up that are widely hoped to help address what the United Nations calls the “dual challenge” – fighting climate change and ensuring that poorer countries can develop sustainably. Energy is a central theme in both. For the first time in 40 years, the U.N. General Assembly is convening a global summit of world leaders focused solely on energy. If all goes as planned on Sept. 24, 2021, they will consider a road map that includes tripling investment in renewable power and making affordable modern and clean energy available to everyone everywhere within the decade. The second event is the U.N. climate conference in November, where negotiators representing nations around the world will be asked to ramp up their countries’ efforts to reduce their greenhouse gas emissions. This year’s climate summit will be the first to assess progress toward meeting the 2015 Paris climate agreement. There are a few new efforts – President Joe Biden announced on Sept. 17 plans for a U.S. and European Union pledge to cut methane emissions by 30% within the decade and urged other countries to join – but there are also some remaining sticking points in how nations will meet their promised targets. Resolving these will be important for the credibility of the agreement and the willingness of developing countries to commit to further progress. As climate policy experts with decades of experience in international energy policy, we have identified four strategic priorities that would help provide the foundations for success in cleaning up both energy and climate change. What has been achieved so far? Despite the ambitious goals in many countries, the world’s greenhouse gas emissions have continued to rise. The year 2020 was a brief exception – emissions fell significantly due to the global pandemic – but that trend has already reversed as economies recover. The statements released by world leaders after the recent G7 and G20 meetings underlined recognition of the problem. Still, very few countries and companies have detailed plans and budgets in place to meet their own high-level goals. Illustration showing where to cut emissions soonest most efficiently 4 strategic priorities Getting energy and climate policies worldwide headed in the same direction is a daunting task. Here are four strategies that could help countries navigate this space: 1) Deploy carbon pricing and markets more widely. Only a few countries, states and regions currently have carbon prices that are high enough to push polluters to cut their carbon dioxide emissions. The climate negotiations in Scotland will focus on getting the rules right for global markets. Making these markets function well and transparently is essential for effectively meeting the many net zero climate goals that have been announced by countries from Japan and South Korea to the U.S., China and the European Union. These include rules on the use of carbon offsets – they allow individuals or companies to invest in projects that help balance out their own emissions – which are currently highly contentious and largely not functional or transparent. 2) Focus attention on the “hard-to-decarbonize” sectors. Shipping, road freight and industries like cement and steel are all difficult places for cutting emissions, in part because they don’t yet have tested, affordable replacements for fossil fuels. While there are some innovative ideas, competitiveness concerns – such as companies moving production outside regulated areas to avoid regulations – have been a key barrier to progress. Europe is trying to overcome this barrier by establishing a carbon border adjustment mechanism, with emission levies on imports similar to those for European producers. The Biden administration is also exploring such rules. 3) Get China and other emerging economies on board. It is clear that coal, the most carbon-intensive fossil fuel, needs to be phased out fast, and doing so is critical to both the U.N.‘s energy and climate agendas. Given that more than half of global coal is consumed in China, its actions stand out, although other emerging economies such as India, Indonesia and Vietnam are also critical. This will not be easy. Notably half of the Chinese coal plants are less than a decade old, a fraction of a coal plant’s typical lifespan. 4) Focus on innovation. Support for innovation has brought us cutting-edge renewable power and electric vehicles much faster than anticipated. More is possible. For example, offshore wind, geothermal, carbon capture and green hydrogen are new developments that can make a big difference in years to come. Who leads in developing these new technologies, and which companies, will reap important economic benefits. They will also support millions of new jobs and economic growth. Luckily, investors are actively supporting these technologies. More investors are starting to believe in energy transitions and are putting their money into developing the associated technologies. Still, increased government support for research and development funding can catalyze these efforts. An opportunity also exists to broaden innovation efforts beyond technology, to a systemic approach that includes dimensions such as market design, social acceptance, equity, regulatory frameworks and business models. Energy systems are deeply interconnected to social issues, so changing them will not be successful if the solutions focus only on technology. Not one solution It is likely that U.N. energy and climate deliberations over the coming months will continue to move in fits and starts. The real work needs to take place at a more practical implementation level, such as in states, provinces and municipalities. If there is one thing we have learned, it is that mitigating climate change will be a long slog, not a one-off political announcement or celebrity endorsement. It requires much more than simply repeating platitudes. Politicians need to show that the many energy transitions emerging are good for economies and communities, and can create long-lasting jobs and tax revenues. While it’s uncontested that the benefits of greenhouse gas mitigation far exceed the cost, it is not always easy to marry this with short-term political cycles.

  South Africa’s economy has taken a number of very heavy body blows recently. These include a slowdown due to measures taken to control the spread of COVID-19, on top of increased state dysfunctionality due to corruption. The country has also just experienced the worst riots since it became a democracy in 1994. All have left it struggling financially, while investor confidence has been shaken. The country’s president, Cyril Ramaphosa, and finance minister, Tito Mboweni, have put in place measures to try to soften some of the hardships caused by the pandemic, and more recently the arson and violence. But a host of additional adjustments need to be made – to economic plans as well as budgets. One of these is the country’s power generation and electricity supply programmes. Electricity demand projections are interlinked with economic progress. Changes in the economy therefore have a direct impact on the energy sector. In addition, energy generation technologies are evolving rapidly, affecting available technological choices and associated costs. A reappraisal of the country’s long-term electricity requirements – and a review of technologies best suited under the circumstances – has therefore become a priority. Energy planning South Africa’s energy policy is managed through the Integrated Resource Plan. The document is prepared by a panel of experts and sets out the preferred evolution of the power generation landscape (additions, closures, technologies to be used) based on scenario planning. These plans are supposed to be reformulated every two years. The most recent one was gazetted in 2019. Since then there have been a number of significant developments in the sector. The first revolves around technology, in particular electricity storage, a major enabler of wind and solar as sources of electricity generation. Renewables currently make up only 10.5% of electricity generation in South Africa. But there’s widespread recognition that this needs to be increased. The push factor is that the country needs to reduce its dependency on coal. The pull factor is that it has ample supplies of both wind and sun. The cost of storage is a massive obstacle. Wind and solar can only function at specific times. The way round this is to store some of the electricity in batteries, to be released at times when the sun or wind aren’t available. At the moment building batteries large enough to see the grid through dozens of hours without wind or sun is both impractical and too expensive. But batteries with more capacity are being developed with the use of hydrogen. Better and cheaper storage will make the intermittent renewable electricity generating technologies more viable and increasingly attractive. The other reason the plan needs to be revised is that it would allow South Africa to settle the lingering confusion about possible future nuclear builds. The 2019 plan did not envisage any new nuclear developments until at least 2030. Despite this, and in the face of opposition from various quarters, the government has been encouraging the nuclear sector to engage in preparatory work leading to a new build. In my view this option should be left out of any revised plan. The main reasons are South Africa’s national fiscal shortages – nuclear is very expensive – as well as the ongoing global decline in nuclear technology. The other reason that the plan needs to be revised urgently is the changing patterns of demand. Electricity demand will grow less than projected A number of assumptions that were used to develop the integrated resource plan two years ago are no longer accurate. One has been a drop in electricity demand from the power utility Eskom. This has been driven by slower economic activity as was evident during the COVID-19 lockdowns. In addition, demand has been dampened by steep rises in electricity rates. Power cuts have also been a contributor to the drop in demand. This trend is likely to continue as the move to solar generation accelerates. Mines have been keen to set up their own on-site solar plants and there has been significant growth in solar installations on domestic rooftops and in shopping malls and factories. This will be given further wings by the fact that the government is changing the regulatory environment to make it easier for independent developers to set up power plants up to 100 megawatts. While a quicker than imagined economic recovery is always possible, this would be accommodated in future electricity plan revisions. But even here caution is required. Economic growth only leads to slightly higher electricity demand – an increase that’s always been overestimated in the past. Plugging the gaps in the interim The national power utility Eskom has been unable to provide a steady power supply due to ageing infrastructure and an abnormally high number of breakdowns. This has led to periodic electricity blackouts at times when demand has exceeded supply. To alleviate power shortages in the interim, the Ministry of Mining and Energy launched an initiative to solicit 2,000 MW of emergency power from private developers. But the plans aren’t panning out very well. Most of the capacity awarded under the programme was to a Turkish company that operates a fleet of ships with gas power stations on board. Three ships were to be moored off South Africa’s coast. But the floating power stations have run into major difficulties related to environmental authorisation requirements. There are also court challenges. The remainder of the interim plan was to be taken up by renewable energy based projects. But a new requirement in the plan for emergency power was that wind and solar plants must be able to deliver power continually from 5am until after 9pm. This means that renewable projects require supplementation when there is no sun or wind, making them expensive. The most problematic aspect of the emergency power programme is that it will award 20 year contracts to successful bidders. So a short to medium term power shortfall is to be settled by long term contracts that will supply electricity at considerably higher cost than alternative sources. The emergency

  Chinese President Xi Jinping recently announced at the UN General Assembly that China “will not build new coal-fired power projects abroad”. Chinese banks have already swung into gear. Three days after Xi’s speech, the Bank of China declared it would no longer provide financing for new coal mining and power projects outside China from the last quarter of 2021. Xi’s statement is expected to affect at least 54 gigawatts of proposed China-backed coal plants that are not yet under construction. Shelving these would save CO₂ emissions equivalent to three months of global emissions. This pledge from the world’s largest public financier of overseas coal plants could usher in a new era of low-carbon development. But that depends on what happens in the countries where China had funnelled money into coal power. Many of these places urgently need new energy infrastructure. Will China’s investments here be redirected to renewable energy – or simply disappear? Chinese support for renewables abroad One positive sign came in the same speech to the UN, when Xi indicated that “China will step up support for other developing countries in developing green and low-carbon energy”. China’s overseas energy investments grew as part of the belt and road initiative. Launched in 2013, Xi’s signature foreign-policy effort increased China’s cooperation with the rest of the world through infrastructure development, unimpeded trade, financial integration and policy coordination. China has continued to provide finance for the belt and road initiative during the pandemic, and investment in renewables made up most (57%) of the country’s financial support for overseas energy projects in 2020 – up from 38% in 2019. Beijing has supported wind and solar projects in more than 20 developing countries since 2013, including Ethiopia and Kenya. And Chinese banks and companies have also expanded their overseas investments in renewable energy over the last decade. A line graph showing Chinese solar and wind energy investments abroad. While the trends are positive, challenges remain. China’s overseas investment policy remains guided by the non-interference principle. This means that Beijing is supposed to let host countries determine the type of energy projects, and only requires Chinese firms to comply with host-country regulations. Research shows that China’s finance for coal in Asia was largely driven by demand in recipient countries. This is because the domestic policies of these countries prioritised improving energy access over reducing emissions, and coal was a cheap and proven source. Inadequate grid infrastructure and politicians sceptical of renewable energy in countries receiving Chinese investment have also hampered development. In Indonesia, business leaders and politicians formed pro-coal lobby groups to influence the design of China-backed projects. China’s new pledge tells prospective recipient countries that coal finance is no longer an option. China must now promote its offer of investment in renewables. Drawing on its domestic experiences, Beijing should provide subsidies or tax cuts to companies willing to build renewable energy projects outside China. Chinese energy developers are often wary of investment risks in developing countries due to their unfamiliarity with local politics. The Chinese government can help by increasing coordination between Chinese companies and local governments, businesses, and communities in host countries. Over the past decade, China has supported many developing countries to increase their energy generating capacity with financing, affordable technology and quick project delivery. China has taken the first step to stop funding coal. It’s now time to adopt policies that support the overseas activities of its renewable energy developers.