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A Just Transition?

Transforming Energy Systems in Africa

German development cooperation with African countries largely centres around the concept of a just (energy) transition towards low-carbon development of industry and infrastructure, as is prominently highlighted in the new Africa Strategy published by the Lead Federal Ministry. Even though creating jobs and boosting economic growth must be a key element of cooperation with Africa while at the same time taking into account environmental protection and biodiversity, it is questionable whether Germany’s approach of a “just transition” adequately does justice to African countries’ development priorities.

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Due to its low adaptive capacity and lack of resilience, Sub-Saharan Africa is one of the world’s regions most affected by climate change. Even now, the effects of climate change are already having devastating consequences on the continent: the scarcity of water and grazing land is increasingly leading to violent conflicts and migration movements, for example, while extreme weather events are threatening the livelihoods of millions of people working in the agricultural sector.

In order to mitigate the effects of climate change, the parties to the Paris Agreement committed to limiting the global temperature increase to below two degrees Celsius, and if possible to 1.5 degrees Celsius, compared to the pre-industrial era. For this to succeed, a transformation is required towards a low-carbon global economy that is as climate-neutral as possible. African countries face the challenge of driving this decarbonisation while at the same time creating millions of jobs for their growing populations and building a modern, climate-resilient energy and transport infrastructure.

 

What Exactly Is a Just Transition?

How can this urgently needed growth and the expansion and renewal of infrastructure be achieved in the most environmentally friendly way possible and taking account of the continent’s biodiversity? For some years now, the concept of a “just transition” has been used in the field of development cooperation to describe this process. The term can be traced back to the trade unions, where it referred to the prevention of negative effects of transformation processes on workers. However, this did not necessarily establish a link to nature conservation. The ecological dimension of a just transition is attributed to Canadian trade unionist Brian Kohler, who, in the late 1990s, stated: “The real choice is not jobs or environment. It is both or neither.” Since then, environmental sustainability has been closely associated with the concept of a just transition, and over the course of the years the term has found its way into international climate negotiations, too. The preamble to the Paris Agreement also refers to the need for a just transition.

The German Federal Ministry for Economic Cooperation and Development (BMZ) has made the achievement of a just transition a focus of cooperation in its Africa Strategy – “Shaping the Future with Africa” – adopted in January 2023. The table of contents of this document already refers to the just transition, which the ministry defines as the “social and environmental transformation of the economy, conservation of vital natural resources, energy and infrastructure.” In order to achieve this, the Ministry plans to expand climate and development partnerships, work with partners for the climate-friendly and socially just development of cities and energy systems and the responsible use of resources, promote sustainable supply chains, interlink ecosystems and economic development, expand mechanisms to protect against climate risks and strengthen climate resilience.

African countries are responsible for less than three per cent of global greenhouse gas emissions.

Since the creation of sustainable economic systems is essentially based on the restructuring of the global energy supply along with the reduction of CO2 emissions that this involves, the BMZ uses the concept of a just transition in a broader sense to mean a “just energy transition”. This highlights the importance of the shift from fossil fuels to low-carbon or renewable energies, while at the same time presenting the transition to a low-emission economy as an integral part of a societal transformation process. Consequently, Just Energy Transition Partnerships (JETPs) are mentioned as another instrument of cooperation between Germany and African countries.

However, it is questionable whether stakeholders in Africa have the same understanding of a just transition as the one presented by the BMZ in its strategy or indeed in the context of development cooperation in general. While the discussion of a just transition towards a low-carbon way of life in industrialised countries combines the three elements of social justice, environmental sustainability and economic viability, discussions on a just energy transition in African countries often involve the question of global justice. African nations account for less than three per cent of global greenhouse gas emissions: calling for emissions to be reduced in industrialised countries first, African countries demand that they receive financial compensation for the climate damage that has already occurred. As many Africans see it, an (energy) transition is only just if it adheres to the idea referred to in climate negotiations as the “polluter pays” principle. A just energy transition can also be interpreted to mean that historical emissions impact on future emission pathways: in other words, African countries have a budget of emissions available to them for their development that industrialised countries have already used up.

What is more, the concept of a just transition – whether in reference to energy systems or economic transformation – implies that there are already systems in place that need to be changed. Yet in countries where more than half of the population has no access to electricity at all, or where most of the population works in the informal sector, people cannot apply the concept of an energy transition or see efforts to decarbonise the economy as a transformation process that is connected to the reality of their lives.

An energy transition along Western lines is not feasible in Sub-Saharan Africa.

 

An African Understanding of a Just Energy Transition

Discussions of the energy transition in the African context thus do not primarily revolve around the potential to produce energy from renewable sources. For a long time, the focus was on access to energy and therefore on energy security itself. Increasingly, the term “just transition” is also being used in connection with the debate on which energy systems are capable of addressing energy poverty in an equitable manner. Some researchers argue that although most African countries have initiated comprehensive renewable energy strategies, research into the possibilities of a transition to renewable energy sources remains Eurocentric. There is no question that the implementation of the energy transition is commendable, especially with regard to UN Sustainable Development Goal (SDG) 7, which calls for sustainable, reliable and affordable access to energy for all. Yet in democracies that are weak or deficient, as is the case in many African countries, it is more important than in liberal democracies to ensure that the costs and benefits of the energy transition are distributed fairly and that the population is involved in political decision-making processes.

At the same time, there should be a fundamental understanding that the expansion of renewable energies is essentially dependent on the political will of national decision-makers. For this reason, a just energy transition in Sub-Saharan Africa as a development cooperation mandate must inevitably include issues of good governance and political participation; otherwise, there is a risk that the energy transition will be perceived as a transformation that exacerbates existing injustices. At the same time, it must be taken into account that an energy transition along Western lines is not feasible due to the societal, social and economic situation in these countries.

 

Just Growth versus Just Transition

According to Linus Mofor, Senior Environmental Advisor at the UN Economic Commission for Africa, the priority of the Global North should be decarbonisation of the economy, while the priority of the Global South is industrialisation, whereby the opportunities of low-carbon growth should be taken into account. His statement demonstrates that African countries understand and indeed demand that their right to development should also be a right to economic growth and material prosperity.

The African Charter on Human and Peoples’ Rights does not enshrine the right to a prestine natural environment but to an environment conducive to development in general. This interpretation endorses development projects that allow for a certain level of degradation of the environment and biodiversity as long as the impact is as low as possible and human well-being is not significantly affected. By referring to an environment conducive to development in general, the Charter recognises that development cannot take place without adequate environmental protection.

Although many African countries have fossil resources that are key to their development, the World Bank has discontinued funding that is dedicated to the development of fossil energy projects. At the UN Climate Change Conference in Glasgow (COP26), 39 countries and development organisations pledged to end direct international public funding for fossil fuel projects. Citing the global energy transition, the need of African countries for energy security was not taken seriously for a long time, with industrialised countries keen to present themselves as pioneers of green energy technologies. However, since the global energy crisis at the beginning of 2022, many industrialised nations and emerging economies have expanded the use of fossil fuels for their national supply, which certainly undermines their credibility with regard to the goal of development cooperation to support African countries in a social and environmental transformation of the economy.

Energy security is the basis for economic and social development.

The European energy supply gap caused by the Russian invasion of Ukraine has given rise to numerous new energy agreements being concluded between European and African countries. Germany has expressed its interest in buying offshore gas from Senegal. Italy has signed gas contracts with Algeria, Angola, Egypt and the Republic of the Congo to reduce its dependence on Russia. Italy, France, Portugal, Spain and the Netherlands are negotiating gas deals with Nigeria, while investments in Mozambique that were previously put on hold may now be reactivated. Generally speaking, investments in Africa are to be welcomed. It is also understandable and legitimate that Europe should try to close its energy gap by forging new partnerships on the African continent. However, it appears hypocritical that up to the beginning of 2022, African countries were expected not to utilise their own fossil resources, and no more funds were made available to develop these resources for national use. It almost seems as if differing yardsticks apply to ensuring energy security in Europe and in Africa – a far cry from the principle of treating partners on an equal footing and the BMZ’s aspiration to shape the future in collaboration with Africa.

More than 70 per cent of the population in Sub-Saharan Africa has no access to electricity, and most of these people live in rural areas. The various countries differ greatly in terms of their basic situation. In South Africa, for example, around 90 per cent of the population has access to electricity, 95 per cent of which comes from non-renewable sources. In Rwanda, some 47 per cent of the population has access to electricity, with 63 per cent of this coming from renewable energy sources. In Kenya, more than 70 per cent of the population has access to electricity, and the share of renewable energies here is around 90 per cent. In Chad, only 11 per cent of the population has access to electricity and, as in South Africa, the share of renewable energy sources in electricity production is around just 5 per cent.

Yet energy security is a prerequisite for increased productivity in agriculture, industry and other sectors, so it is ultimately the basis for economic and social development. For Africa, this means that equitable growth must include all forms of energy production provided that they can overcome energy poverty on the continent. In a communiqué entitled “Ensuring a Just and Equitable Energy Transition in Africa” – also known as “Kigali Communiqué” –, ten African countries advocate the use of gas as a necessary bridging technology for economic development. Similarly, the African Union and other institutions published a joint position on energy access and a just transition last year, which likewise affirms the right of nations to make use of their own fossil resources.

While it is often cited that the African continent is rich in renewable energy sources, people tend to omit the fact that the use of these energies requires technology that is frequently not available. By contrast, the infrastructure required for countries to be able to use their own fossil resources is available and can be used. Development cooperation should take this fundamental reality into account pragmatically, too.

 

Taking Greater Account of the Context in African Countries

The notion of a just transition has a different significance in industrialised countries than in Sub-Saharan Africa. In view of climate change, discussions about justice are often conducted in African countries with the “polluter pays” principle in mind. Yet justice for these countries also means using their own fossil resources to boost development. For this reason, the concept of a just transition that focuses mainly on environmental and social change is one for which most African countries have little sympathy and that they even perceive as paternalistic.

One example of this is the BMZ’s alliance with South Africa under the Just Energy Transition Partnership (JETP). This “tailor-made” form of cooperation aims to bring about a broad-based social and environmental transformation of the economy and of people’s day-to-day lives. In addition to achieving a reduction in greenhouse gases, it is designed to create employment opportunities for women and young people. However, the JETP is often perceived locally as an instrument that forces South Africa to abandon the supposedly lucrative coal industry in the interests of climate protection. Mining trade unions argue that the transition is being imposed on them by the West, that social and economic aspects are being neglected, and that nothing about the process is just.

Senegal is forecast to see high levels of economic growth over the next five years, largely due to new oil and gas projects.

The Mozambican government has initially ruled out phasing out coal mining, justifying its stance based on the fact that as an export item, coal makes a key contribution to the balance of payments as well as being a source of foreign currency. It also argues that any energy transition should be based on the actual situation on the ground.

For Ghana’s President Akufo-Addo, too, a just transition must focus on the “polluter pays” principle. He advocates a fair solution that creates a level playing field and recognises the historical inequalities between large and small emitters. While decarbonisation is supported by Ghana in principle, it ties up funds there that are needed for other urgent projects such as securing a stable electricity supply and modernising the transport infrastructure. One of the greatest challenges facing Ghana is having to respond to the expectations of its own public and population while at the same time achieving low-emission growth so as to meet national and international climate targets.

Forecasts see high levels of economic growth for Senegal over the next five years, largely due to new oil and gas projects: these will provide new employment opportunities, improved energy security and – as a result – good economic prospects. The country also recently concluded a JETP with various partners, including Germany. Under this agreement, Senegal has committed to producing 40 per cent of its electricity supply from renewable energy sources and will receive financial support in return. In seeking to bring about a just transition, therefore, the country’s primary development goal – namely access to electricity – has not been subordinated to a climate target. Civil society actors also praised the fact that they were consulted during the negotiations, with the result that the agreement enjoyed broad social acceptance.

The example of the Senegalese JETP shows that it is indeed possible to reconcile climate and development goals. However, if the concept of a just transition is perceived merely as an imposed requirement for achieving climate targets that does not adequately take into account efforts by African countries to achieve their own self-defined development goals – as in the case of South Africa – there is a danger in the medium to long term that efforts to reduce CO2 emissions globally by means of targeted measures will be perceived as an obstacle to their own development. What is more, most developing countries and emerging economies are unable to benefit economically from the energy transition due to the lack of availability of the relevant technologies. This could potentially contribute to a nega-tive perception of the global energy transition and to an impression of being left behind yet again.

When it comes to issues of justice, any debate on a social and economic transformation must also include the issue of the accountability of African partners. While many African countries already pursue policies aimed at achieving a just energy transition, these transitions run the risk of perpetuating inequalities if democratic deficits are not addressed. Far too often, effective and efficient renewable energy expansion and climate financing are hampered by poor governance and corruption. This is why good governance and civil society participation are integral elements of a just transition – though these are unfortunately missing in the BMZ’s strategy for a just energy transition.

 

Options for Implementing a Globally Just Energy Transition

Implementing a global energy transition along the lines of the industrialised countries is not in line with the African understanding of a just transition. In addition, African partners perceive contradictions between the EU’s short-term climate and energy policies and the medium-term to long-term goals it is pursuing. There are good reasons for such policies, but these must be discussed as part of a dialogue; otherwise, there is a risk of losing credibility. This also includes engaging in open and honest discussion of the measures required to reduce CO2 globally, such as introducing carbon taxes or other forms of pricing for carbon products that are traded internationally. Otherwise the African side could gain the impression that it is being disadvantaged.

Subsidies for climate-friendly technologies and fiscal incentives to make use of green technologies have the potential to change patterns of behaviour in industrialised countries. However, the fiscal leeway for such measures is limited in African countries. The aftermath of the COVID-19 pandemic is still being felt: many countries are struggling with high inflation and debt ratios as well as the devaluation of national currencies, and this has caused numerous economies on the continent to contract for the first time in decades. If a globally just energy transition is to be achieved, it is vital to counter any impression that efforts towards global decarbonisation might be an obstacle to development or could restrict the competitiveness of developing and emerging countries. New and innovative climate finance mechanisms have the potential to send out a powerful signal in this regard.

In order to mitigate the increase in global CO2 emissions, green technologies must be made available to African countries.

Partnership-based relations between Europe and Africa should take the continent’s development and industrialisation needs more seriously. This means supporting the infrastructure projects set out in “Agenda 2063: The Africa We Want”. Issued by the African Union, Agenda 2063 is considered to be a strategic guideline for the continent’s development. Germany can help ensure that these infrastructure projects are implemented in a way that is as environmentally sustainable as possible with minimum emissions. This would also create an alternative to China’s Belt and Road Initiative, which has driven many countries into high debt. Improving and building climate-resilient transport and energy infrastructure on the African continent is in Europe’s interest too, since this would facilitate trade with Africa and make it more attractive. Inadequate transport routes and outdated water and energy infrastructure are a hindrance to market development, especially in the interior of the continent. A study by the Infrastructure Consortium for Africa (ICA) concludes that poor transport infrastructure makes the intra-African movement of goods 30 to 40 per cent more expensive. Likewise, the World Bank estimates the loss of productivity due to poor infrastructure at up to 40 per cent.

Fossil fuel reserves offer potential for development and industrialisation on the African continent, but this runs counter to the global need for decarbonisation: this is an issue that cannot be resolved by pragmatic discussion, but it can at least be addressed. It is important here to include aspects of distributive global justice regarding the causes of climate change. In order to mitigate the increase in global CO2 emissions, green technologies must be made available to African countries, and there must be more knowledge transfer in the field of climate action and environmental protection. This demand is not new and is to be found in the BMZ’s Africa Strategy, too. Collaboration of this nature should not be viewed in terms of development cooperation, but from a strategic perspective and with a view to future economic cooperation, in particular in the field of critical minerals and metals and sustainable energy production.

Nonetheless, claiming the right to economic development and the associated use of a country’s own fossil resources is no excuse for countries to disregard the commitments made under the Paris Agreement to limit global warming. In negotiation processes under the UN Framework Convention on Climate Change, African countries that advocate the use of gas and oil as a bridging technology should present long-term strategies for low-emission development and set medium-term CO2 reduction targets.

Whether large export markets will be created for future-oriented technologies such as hydrogen and green ammonia in the future cannot be predicted with certainty today. Although some countries have concluded significant investment agreements on production, there is no industrial production capacity in Africa as yet. It thus remains to be seen whether these products can be offered competitively on the world market, which will also depend on how decarbonisation progresses globally. When opening up new markets, the focus should be much more on regional trade and the development of regional production capacity. The African Continental Free Trade Area (AfCFTA) Agreement provides the framework for this and its implementation should be a priority for African countries. The creation of the African Single Electricity Market agreed in the AfCTFA is highly attractive for private investment in much-needed sustainable energy infrastructure, since it would create markets with large purchase guarantees.

The processing of critical minerals and metals in Africa itself could be favourable for industrialisation on the continent.

 

Increased Cooperation between Africa and Germany in the Field of Critical Minerals and Metals

One major opportunity for a just and sustainable transformation of the economy and industry lies in the area of the critical minerals and metals needed for the energy transition. As a result of the Russian war of aggression against Ukraine and the tensions between the United States and China, the geopolitical situation has changed to the extent that the issue of supplying the raw materials needed for the energy transition and ensuring the relevant supply chains has taken on a new significance that goes far beyond climate policy.

Critical minerals and metals are often regionally concentrated: more than 70 per cent of the cobalt ore processed worldwide comes from the Democratic Republic of Congo, while China has more than 50 per cent of all rare earths in the world. By way of comparison, the three largest oil producers, the United States, Saudi Arabia and Russia, are each responsible for less than 10 per cent of global oil production. In addition, processing of the minerals and metals needed for the energy transition such as nickel, cobalt and bauxite is likewise heavily concentrated in China, while Beijing is frequently involved in mines in other countries through direct investment, too.

A visit by Congolese President Félix Tshisekedi to China in May 2023 showed that this is increasingly causing unease in Africa as well. President Tshisekedi was seeking to renegotiate mining contracts and obtain better terms for his country, arguing that China’s revenues from copper and cobalt mining in the Central African country were disproportionate to the marginal compensation paid. A new agreement is to be negotiated by the end of the year and it remains to be seen whether Tshisekedi can deliver on his claim to be able to achieve a better balance with China.

One of the measures taken by the EU to diversify the supply of critical raw materials and hence reduce dependence on Chinese supply chains for critical minerals and metals was to adopt the Critical Raw Materials Act in March 2023. The aim of the Act is to maintain the EU’s competitiveness in the area of green energy technologies. In order to achieve this, measures are presented to ensure the supply to European industry of a total of 34 minerals and metals that are considered critical. Many of these are found on the African continent. As a result, increasing importance is attached to the issue in Africa as well. However, this is not out of a desire to drive decarbonisation and remain competitive in the field of green technologies. Rather, African states now recognise the potential for their own industrialisation and a new form of strategic cooperation.

In the extraction of fossil fuels and other raw materials, Africa’s role in the value chain has in the past been limited to the export of unprocessed raw materials, which has made African countries vulnerable to global price fluctuations while at the same time generating limited revenue and few jobs. The processing of critical minerals and metals such as lithium, cobalt and bauxite in Africa itself could be favourable for industrialisation on the continent by creating the necessary production capacity, which in turn would result in economic growth and job creation along the entire processing value chain.

Under commodity partnerships linked to investment agreements, for example, African states could call for investments to create the relevant capacity. In this way, the increased demand for green commodities puts them in a strong negotiating position. This would also have the effect of transforming what was previously development cooperation into economic cooperation on an equal footing. One example of this is an agreement recently concluded between the Democratic Republic of Congo, Zambia and the United States to establish a battery factory for electric cars in a newly created free trade zone.

By contrast, Zimbabwe introduced more rigorous restrictions on the export of unprocessed lithium earlier this year. However, experience has shown that export restrictions in African countries have not resulted in the desired creation of local production capacity. Longer-term investments in production capacity and the resulting technology transfer are preferable to government export restrictions, but this also requires the creation of a favourable investment environment in the African countries.

Legislation must be ready for the increased demand for minerals and metals such that international agreements guarantee a just transition for the population at large – which includes not only investment agreements, but also transparency, social and political participation, and the reinvestment of profits and returns in the countries themselves. The adoption and application of specific ESG (environmental, social and good governance) standards in the extractive industries is also indispensable to ensure that the development called for in the African Charter on Human and People’s Rights is environmentally and socially sustainable. Under these conditions, a strategic partnership could potentially guarantee the security of critical minerals and therefore the competitiveness of Germany and Europe, while at the same time driving a just transition for African countries as they themselves understand it.

– translated from German –

 


 

Anja Berretta is Head of the Regional Programme on Energy Security and Climate Change in Sub-Saharan Africa, based in Nairobi.

 


 

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