Africa’s financial dilemma – Climate Weekly

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For much of Africa, the energy transition is above all a question of access to energy.

Indeed, 600 million people still do not have access to electricity and the continent’s energy needs are exploding.

This is also the argument used by the African Union when its officials asked the African group of climate negotiators to adopt a position for COP27 that endorses all sources of energy, clean and dirty, to provide a affordable energy.

A technical paper that informed the proposal, seen by Climate Home News, spoke of investments in oil and coal in the medium term, with financing for gas in the long term.

While a number of African nations have backed gas as a “bridge fuel”, African climate diplomats have dismissed the pro-gas stance, arguing that this stance would distract from another funding need, perhaps more urgent: adaptation.

Finance is at the top of the agenda of the Egyptian presidency of the COP27. At a meeting in Addis Ababa this week, the COP27 host and the UN convened international financiers with the intention of matching bankable climate projects with private backers ahead of the Sharm el summit. -Sheikh. Egypt itself has offered $11.4 billion in funding to support adaptation and carbon reduction projects.

The willingness of the COP27 presidency to mobilize additional private funding follows a stark reminder of unfulfilled funding promises. The OECD has quietly released the latest data on international climate finance flows. It confirms that rich countries have missed $17 billion to mobilize $100 billion a year by 2020.

In addition to eroding trust between vulnerable and wealthy nations, lack of funding is preventing ready-to-fund projects from starting in Africa and elsewhere.

Reminder: the $100 billion target is only a tiny fraction of the trillions that need to be transferred to clean projects. For scale, 28 of the largest oil and gas producing companies made nearly $100 billion in combined profits in the first quarter of the year alone.

UN chief António Guterres called it “immoral” and “preposterous greed“. He urged governments to tax the profits of oil and gas companies and use the funds to support the most vulnerable in the face of the energy and cost of living crisis.

But not everyone agreed with him on who should foot the bill for the energy crisis. The IMF agreed that the government should protect the vulnerable from price hikes, but argued that the costs should be passed on to consumers to encourage energy conservation and the shift away from fossil fuels.

“We need both: windfall taxes on oil and gas profits; and a shift to policies that subsidize people, not energy,” Chris Beaton of the IISD think tank told Climate Home.

In case you missed it, India has finally turned a promise from Narendra Modi at the Cop26 summit into an updated climate plan. A government press release confirmed a clean energy target that had confused experts.

India is aiming for half of installed power generation capacity to come from non-fossil sources by the end of the decade, not half of energy consumption – which would have been much harder to achieve .

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