By Chris Pesso 

The Oil and Gas Industry, over the past decades, has significantly contributed to the rise of CO2 emissions. The time has arrived for these companies to start funding the development of new technologies towards renewable energy. For this purpose, a global effort has been made for the first time, to include the International Oil Companies (IOCs) at COP27.

The West has been highlighting the importance of renewable and sustainable energy. However, that doesn’t seem to be the focus for most African countries. Uganda’s Minister of Energies- Ruth Ssentamu- emphasises that the focus of her country is to eradicate poverty and alleviate hunger. According to her, “Clean energy is not cheap!”. Amr Kamel, the Executive Vice President of the AFREXIMbank shares similar thoughts. The AFREXIMbank has prioritised their support to fund the needs of their member countries over their climate commitments.

Many African leaders have pointed out that Africa’s contribution to global CO2 emissions is minute in comparison to the emissions of western countries. Moreover, most African nations lack the funds to invest in future technologies for sustainable energy. This seems even harder to achieve knowing that the entire continent only receives 10% of the $100 billion climate fund.

Senegal has strongly stressed the need for novel policy strategies to implement the Nationally Determined Contributions (NDCs) that each nation has committed to. Carbon Pricing seems to be a good instrument to implement the NDCs, more specifically, the Carbon Tax. As of now, the Carbon Tax has proved to be a good fiscal reform, “one of the best” according to the National Climate Change Committee of Senegal. But this may prove to be troublesome in federations and economies that facilitate free trade such as the East African Federation. The Carbon Tax can cause economic instability between countries that practise free trade. This could prove useful only if all the participating countries of the East African Federation are willing to impose it. As of now, the Carbon Tax has been imposed on the electricity, cement and the oil and gas sectors. However, the carbon taxation system needs to be studied further and its impacts on the other sectors need to be understood more fully before they can be implemented.

The African Development Bank has played a major role in assisting underdeveloped nations with their NDC commitments. “To stay in power, you have to give power” according to Akinwumi Adesina (CEO, African Development Bank). The bank has recently funded a pan-African solar energy project that would stretch across the nations of Mali, Burkina Faso, Chad, Egypt, Ethiopia, Mauritania, Djibouti, and Somalia making this the world’s largest ‘Solar Zone’. They have also funded a huge electric grid infrastructure project in Kenya to connect villages that do not receive electricity. With more than 600 million Africans not receiving electricity, the bank has engaged in expanding the grid network to other countries across the continent. The responsibility for such energy projects should not solely lie in the hands of external banks but instead the governments could use this as an opportunity for more private investors to contribute.

In a world with rising temperatures and changing climatic patterns, the developing and underdeveloped countries have been experiencing the most extreme impacts.  We can only hope that global governments and the IOCs fulfil their financial commitments towards the African continent. Given its geocentric location, Africa could be a crucial player in supplying clean energy to the world in the future, provided the right decisions are made today!