At the 2022 United Nations Climate Change Conference (COP27), climate issues relating to Africa took centre stage. Uganda President Yoweri Museveni noted the “brazen double standards” of Europe’s climate process “hypocrisy.” ”The Ugandan leader characterized the Western nations’ agreement to allow some fossil energy investment while blocking Uganda’s rights to retrieve oil and gas for itself as the “purest hypocrisy.” Europe claims that its recent investments in fossil energy are temporary and brought on by the war in Ukraine, but its investment in African energy is restricted to wind and solar which creates intermittent electricity and not the baseload generation required to power factories and productive employment. According to the Uganda President, European jobs are made possible by diversity in electricity production, while Africans are forced to make life-threatening crossings of the Mediterranean Sea to obtain jobs in Europe. The gathering at the exclusive luxury resort town of Sharma El Sheikh, Egypt, is revealing inconvenient truths about the importance of energy availability and reliability to the developing world.
Europe’s Climate Hypocrisy
Africa sees Germany demolishing a wind farm to make way for a new open-pit coal mine as a reprehensible double standard that Africa has come to expect. One of the farm’s wind turbines was taken down last month, and two others are expected to be taken down next year, with all being dismantled by the end of 2023. Europe is also bringing mothballed coal power plants back online to deal with its energy shortages stemming from less Russian natural gas supply due to sanctions on Russia for its invasion of Ukraine. Museveni noted that while new Western investment in African fossil fuels is possible, it is only available for oil and gas resources that will be piped and shipped to Europe. Uganda President Museveni wrote, “It is morally bankrupt for Europeans to expect to take Africa’s fossil fuels for their own energy production but refuse to countenance African use of those same fuels for theirs.” The European Union called for a delay in the development of an oil pipeline that Uganda was building with Tanzania citing violation of human rights and destruction of the climate.
Museveni continued, “When decisions like these are being made, and without a shred of self-awareness or honour, it is no surprise some of my counterparts call for reparations or handouts. But this is the last thing Africans need or most want. Dialling down the brazen double standards is what we desire, along with the lifting of the moratorium on fossil fuel investments for Africa herself so we can meet the needs of our own people.” The United States, Canada and 18 other countries committed at the COP26 climate summit to stop public financing for fossil fuel projects abroad, instead steering their spending into renewable energy. That agreement did not include major Asian countries responsible for much of the fossil fuel financing abroad.
Africa Looks Elsewhere for Investment
Africa has turned elsewhere for investment that comes without lectures attached. Africa has turned to China, and more recently to Turkey and India to help build the infrastructure Africans need to raise their continent out of poverty. Even the United Kingdom is taking a more “enlightenment” approach than the rest of Europe.
If Africa increased electricity production by using domestic reserves of natural gas, the continent’s share of global emissions would increase from 3 percent to just 3.5 percent. Instead, Western money poured into wind and solar projects that leave Africans without electricity when the wind does not blow and the sun does not shine. Along with wind and solar power, Africa needs continuous baseload power produced by coal, natural gas, hydroelectricity, and nuclear power as backup to solar and wind and to maintain a solid manufacturing base. Even the International Energy Agency (IEA) is calling for Africa to be empowered to use natural gas and other hydrocarbons for industrialization. According to IEA, $25 billion per year would raise 600 million people out of energy poverty by 2030 through diversification.
COP27 Calls for a Radical Overhaul of the World Bank and International Monetary Fund
There is interest behind a set of ideas that would overhaul the World Bank and the International Monetary Fund, which loan or grant money from industrialized nations to developing countries. If implemented, the reforms being considered would make more money available to developing nations, deploy funds faster, offer countries lower interest rates and allow them to pause debt payments after major disasters. The changes could enable these institutions to attract trillions of dollars in private capital to help nations transition to wind, solar and other “clean” energy. Note that these reform ideas are not in line with the comments from the Uganda President as they are directed to funding only non-carbon energy.
These institutions have operated largely unchanged since their establishment after World War II, with wealthy nations essentially financing loans to developing nations and holding much of their debt and thus exercising a large degree of control over their growth and progress. Among the most transformative changes discussed is a new approach to the risk ratings and resulting interest rates developing countries must pay on loans from the World Bank. Currently, some countries can borrow at 3 percent while others borrow at 14 or 15 percent. Paying higher debt is a huge drain on national budgets, leaving governments without needed financial reserves when they face a crisis.
Nearly every country is a member of both the World Bank and I.M.F., but power is distributed through a quota system that gives the United States a dominating position in decision-making and leadership. Janet Yellen, U.S. Secretary of the Treasury, said she would make a formal request to the World Bank that it comes up with an “evolution road map” by the end of the year.
According to Uganda’s President: Europe’s “reprehensible double standard” on energy is something that Africa has “come to expect.” Europe’s re-investment in fossil energy makes a mockery of Western commitments to climate targets and their promises to help speed African development in renewable energy. Europe’s determination to write one set of rules for Europeans and a different set for Africans makes Europe complicit in forcing poverty on Africa and limiting their opportunity.
Africans want to use their own fossil fuel resources to develop their countries, bring electricity to households, provide jobs and move people out of poverty. Europe, however, has agreed with the United States and Canada not to finance fossil fuel projects in Africa. Yet, Europe wants to buy African oil and natural gas for its own use, has brought coal plants back online and is opening new coal mines while destroying a wind farm. That is pure hypocrisy to Africa and should be to most thinking Americans.