Hypocrisy will sabotage climate crisis initiatives

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Exacerbating the scramble for the continent’s fossil fuels is that commercial banks, which are part of the Net Zero Banking Alliance (NZBA) on carbon emissions, continue to dish out loans for these projects in 48 of Africa’s 55 countries. Photo: Mohamed Abdel Hamid/Anadolu Agency via Getty Images
Exacerbating the scramble for the continent’s fossil fuels is that commercial banks, which are part of the Net Zero Banking Alliance (NZBA) on carbon emissions, continue to dish out loans for these projects in 48 of Africa’s 55 countries. Photo: Mohamed Abdel Hamid/Anadolu Agency via Getty Images

NEWS


The talk of reducing carbon emissions has a tinge of hypocrisy as 200 multinational companies have flooded Africa with plans for new oil, gas and coal projects that will cause a climate crisis.

Exacerbating the scramble for the continent’s fossil fuels is that commercial banks, which are part of the Net Zero Banking Alliance (NZBA) on carbon emissions, continue to dish out loans for these projects in 48 of Africa’s 55 countries. 

READ: COP27: Global north and south fail to reach loss and damage funding agreement

These developments render the ambition to halve carbon emissions by 2030 and keep global warming at 1.5°C a pipe dream, according to a report by Urgewald – a nonprofit environmental and human rights organisation based in Sassenberg, Germany.

Urgewald and 33 African environmental organisations released a report titled Who is Financing Fossil Fuel Expansion in Africa at the COP27 Summit in Sharm el-Sheikh, Egypt.

The report’s findings, said lead author Heffa Schücking, were “sobering”.

 Schücking added:

In 48 out of 55 African nations, oil, gas and coal companies are either exploring or developing new fossil reserves, building new fossil infrastructure, such as pipelines or liquefied natural gas (LNG) terminals, or developing new gas and coal-fired power plants. These enormous fossil expansion plans are completely incompatible with the Paris goals and will lock African countries into an obsolete and carbon-heavy energy path.

“African states played a crucial role in ensuring that the Paris climate negotiations resulted in an agreement to limit the global temperature rise to 1.5°C. Yet, our chance to achieve this goal is quickly slipping away,” she added.

Research by Oil Change International said the report showed that foreign multinational corporations own two-thirds of the projected new gas and oil production in Africa by 2050. 

The report noted that:

. Fossil fuel industries have brought nothing but conflicts, ecological and economic destabilisation to Africa;

. Ghana is on the brink of financial distress due to “take-or-pay” contracts that require government to pay hundreds of millions of dollars each year for unused gas;

. In Mozambique, huge LNG projects have exacerbated an insurgency in the North and will do nothing for the 70% of the country’s population that lack access to electricity; and

. In Nigeria, six decades of fossil fuel extraction have turned the Niger Delta into one of the most polluted places on earth and destroyed the health and livelihoods of its communities, while half of Nigeria’s population still has no access to electricity.

The report said: 

The current rush for Africa’s oil and gas has nothing to do with increasing energy access for Africans. Its profits will overwhelmingly flow to a global elite, while local communities are again left to deal with the pollution, impoverishment and human rights violations that are the hallmark of fossil fuel development. Instead of the dirty, polluting energy sources of the past, Africa and its people deserve the clean renewable energy sources of the future.

Urgewald’s report indicates that Africa has 39% of the world’s total renewable energy potential, which is more than any other continent.

“While centralised fossil fuel infrastructure has failed to bring energy to almost half of Africa’s population, renewable energy technologies can deliver a flexible combination of grid-based, off-grid and mini-grid solutions to enable universal energy access for all Africans. Renewable energy systems are also more cost-effective and resilient than their fossil counterparts,” the report says.

The report added that 62% of total renewable power generation that went online in the world last year already cost less than the cheapest fossil fuel option.

“These costs will continue to fall. And investments in renewables create three times as many jobs as investments in fossil fuels.”

Since the Paris Climate Agreement was signed in 2015, international financial institutions, both public and private, have sunk hundreds of billions of dollars into oil, gas and coal projects in Africa.

Since the launch of NZBA in April 2021, 121 banks have joined the alliance, which represents 40% of global banking assets.

READ: COP27: Climate talks get boost from G20 declaration

“While the idea behind the alliance was to move banks towards the goal of net-zero portfolio emissions by 2050, the bar for joining was kept low, and the commitments weak. They, for example, do not yet cover banks’ underwriting activities. We were nonetheless surprised to see that members of the NZBA account for 71.6% of the US$ 98.5 billion that commercial banks channelled to fossil fuel developers in Africa since 2019,” said the report.

Many of these financial institutions, said the report, pledged to align their portfolios with the Paris climate goals, but “these promises are meaningless as long as the very same institutions continue bankrolling a fossil future for our continent”.


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