Dakar, Senegal - A new World Bank report highlighting the potential of the Clean Development Mechanism (CDM) for Sub-Saharan Africa was released recently during the Africa Carbon Forum in Dakar Senegal.

Sub-Saharan Africa currently has a dismal 1.4% share of the 3,900 CDM projects in the UNFCCC pipeline according to the report, nine times smaller than its global share in GHG emissions. As such, the report - Low-carbon Energy Projects for Development in Sub-Saharan Africa: Unveiling the Potential, Addressing the Barriers  - shows that there is tremendous potential locked up in these African countries.

This report presents a first-of-a-kind attempt to inventory the potential of clean energy projects in Sub-Saharan Africa that could receive support from CDM/Carbon Finance products and possibly the new Climate Investment Funds, and thus contribute to supply-demand energy balance in a cost-effective manner. It is the first inventory of opportunities for clean energy projects across various sectors (covering supply side, demand side, energy efficiency and renewable energy measures) in the region.

But as in all things related to Africa, nothing is simply black and white - or in this case - Green and White.

While green investment projects on the Dark Continent offer hope for economic and social improvements for the millions that live in poverty and who are suffering the consequences of climate change, there is a Green Gold Rush underway to acquire vast stretches of African land to meet the world’s biofuel needs. As noted by writer Horand Knaup in an article in Spiegal On Line  Western companies are showering local farmers and governments with promises, but is this just another form of economic colonialism?

In Tanzania the government has granted the British firm Sun Biofuels use of 9,000 hectares (22,230 acres) of sparsely populated farmland for a period of 99 years free of charge in return for investments of about $20 million to build roads and schools, bringing a modicum of prosperity to the region.

Other companies from the Netherlands, the United States, Sweden, Japan, Canada and Germany have also sent scouts to Tanzania, Knaup notes. Prokon, a German company known primarily for its wind turbines, expects to have 200,000 hectares - an area about the size of Luxembourg - under cultivation throughout Tanzania soon.

Elsewhere in Africa, First World investors are being courted with the promise of carbon credits in return for social and economic infrastructure improvements. Nigeria is proposing a solar-powered university; Ivory Coast wants to turn crop waste into fuel; Senegal is offering a wind farm; all these "carrots" that could be translated into carbon credits for the pollution-heavy industries in the West.

As noted in the World Bank report, Africa has the potential to become a goldmine for the type of clean energy projects that produce carbon credits traded under the Kyoto protocol. 

"There are relatively few projects to limit the growth of emissions in Africa. … An event like this is an opportunity to change things," said Yvo de Boer, executive secretary of the UN Convention on Climate Change.

Carbon trading gives growing African economies an opportunity to avoid the mistakes of the West and meet increasing demands for energy in a way that doesn’t contribute to climate change, argues de Boer. "Although Africa is tiny in terms of its contributing to the problem, it can potentially make a huge contribution to the solution," he said.

But the risks of failure are high. No one doubts that Africa will be hit hard by climate change and that more money will be needed to mitigate the human misery that will accompany it - misery already evident in many parts of Sub-Sahara Africa. And aid-related contributions from First World countries, however well intentioned, will not be sufficient.

"The environment is not being taken very seriously in most of the emerging markets, because we haven’t started feeling the pressure yet," Adan Mohamed, chief executive of Barclays Bank Kenya, told Reuters. "But it has got to be addressed and it is up to us corporates to lead that," he added.

It’s a theme echoed by others in the investment community that must balance bottom line interests with the social and economic issues so clearly evident throughout Africa.

"Aid is good, business is better", noted Ellen Johnson-Sirleaf, president of Liberia and Nicky Oppenheimer, chairman of De Beers, in an International Herald Tribune article on August 30, 2008.

African countries must be willing to make a change in mind-set from the idea that foreign programs and plans will lift countries out of poverty to a belief in their own vision for their future, they note. "Foreign aid should only temporarily support countries while they implement difficult reforms and get on their feet."

This is not easy. It is true that African governments suffer from a lack of capacity. They struggle to raise taxes and to plan and coordinate activity with investors and donors. But working together, African governments, businesses and external partners can create prosperity and employment on the continent - if they act as partners, not predators.

The answer is straight forward, these two leaders note. "The key to success will be the extent to which African governments can provide the private sector with the right incentives to add value to the economy, so both business and government can concentrate on what each does best."

Although the answer appears simple, it will be far from easy to implement. Governments throughout Africa are besieged already with the environmental and social stresses of poverty and climate change. Poverty in Africa, where nearly three quarters of people rely on agriculture, means it is the part of the world least able to adapt to the severe weather changes forecast to be triggered by global warming, experts say.

Coupled with other problems of corruption, illegal land grabs, the use of state resources to buy votes, political instability brought on by insurrections, and devastating policies by dictatorial regimes, it is no wonder that investors are leery of funding projects in Africa.

The search for legitimate projects that could generate marketable carbon offsets has the potential to generate social and infrastructure improvements in many parts of Africa. But the United Nations, the World Bank and other agencies directly or indirectly involved in the promotion of such projects must be extra diligent to ensure that efforts to ’green’ the Dark Continent do not simply line the pockets of the rich with ‘green gold’.

The same holds true for the private sector. Africa has seen enough economic colonialism and rampant exploitation of its natural resources. As Johnson-Sirleaf and Oppenheimer note, "African governments need to sell the necessary reforms - to sell capitalism - at home. Citizens must understand that Africa’s competitive edge will not come from short-term price movements in resources and people. Productivity will result from well-governed businesses, educated citizens and leaders willing to take the tough steps to make this happen."

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For More Information: International Herald Tribune



Source 2: Spiegal