Vast, vital and often criminalised

Charcoal: the grey trade

If forests are properly managed and harvested, charcoal could be a renewable energy source that does not destroy the environment

Congolese charcoal dealers push their bicycles up the hill as they transport their produce to the market in Sake, North Kivu, in democratic republic of Congo’s Goma province on December 3, 2011. Much of the charcoal in Goma is produced from trees in the Virunga National Park, which is used for cooking and heating by the millions of people living in this troubled region. A sack of chalrcoal sells for approximately the equivalent of USD20 in the market. AFP PHOTO / SIMON MAINA (Photo by SIMON MAINA / AFP)

Charcoal is one of the most important commodities in sub-Saharan Africa. In southern and East Africa, the tall, stiff sacks of charcoal propped up by the side of road are one of the most ubiquitous sights when driving along even remote rural roads; likewise, the evening smell of any town is always partially composed of the smoke of charcoal fires. According to the most recent estimates by the United Nations Food and Agricultural Organization (FAO), Africa produces nearly 60% of the world’s annual charcoal supply, most of it for domestic use by as much as 80% of sub-Saharan Africa’s urban consumers.

The road-side sacks speak to its vital role as a rural employer; the evening smells to the huge reliance of urban dwellers on charcoal as their primary energy source. The charcoal economy is vast, vital, and often criminalised and corrupt. Its negative impacts are well-known: it contributes to lung disease and forest degradation, and sometimes to deforestation. It has been taxed by Al-Shabaab, and attempts to ensure access to woodlands for charcoal have led to the killing of forest rangers in the Democratic Republic of Congo (DRC) by local militias.

For most people, charcoal is either so ordinary it’s invisible, or it is seen as so dangerous that it must be demonised. But this is really a “grey” trade, straddling the legal and the illegal, the legitimate and the illegitimate, and it is too important to remain in this inbetween space. To make charcoal, wood, usually harvested from nearby forests, is burned over several days in an artisanal kiln. Most charcoal producers are poor and often illiterate rural people, who produce charcoal on their own homestead. The process is extremely inefficient – as little as 10-15% of the wood used in this method is actually marketable as charcoal; the rest goes to waste.

From these “backyard” kilns, charcoal is collected and transported to towns and cities, and sometimes across regional borders. The highest-quality charcoal, made from particular tree species, may also be exported off the continent. Along the way, the charcoal trade involves a large range of people: loaders, truck owners, truck drivers, small transporters, creditors, wholesalers, retailers, stove makers, stove retailers, tool retailers, and charcoal exporters. Seen like this, the industry provides income to millions across the region – if not tens of millions. According to a report by the World Bank published in 2018, in rural areas of Mozambique, the industry generates jobs for 136,000 to 214,000 people.

In 2018, Kenya’s Ministry of Environment and Forestry estimated that the charcoal trade was the largest informal-sector employer, employing 700,000 people, who in turn were believed to be supporting 2.3-2.5 million people. The charcoal value chain ties the fate of the rural poor to the quality of life of millions of urban residents. For the households in towns and cities who consume most charcoal, it is a cheap and efficient energy source. Other energy sources, when they are available, are simply not as affordable. Combine this reality with the fact that, according to the UN, Africa’s urban population is the fastest growing in the world.

Charcoal vendors in Zimbabwe stand beside their wares in Harare, 2019 Photo: Jekesai Njikiz ana / AFP

According to a meeting held by a UN expert group on urbanisation and migration in 2018, urbanisation in east and southern African countries is expected to increase by 74.3% and 43.6% respectively by 2050. While many hope that investment in energy infrastructure – renewable or not – will reduce the urban reliance on charcoal, this seems extremely unlikely to happen soon. Dr Casey Ryan, who researches charcoal production and land-use change at the University of Edinburgh, points out that even if investments come to fruition in the region’s capital cities, most urban growth in Africa is happening in so-called secondary cities: “So, all those cities, which are growing very fast, are mostly going to run on charcoal – and they’re also quite far down the queue for, say, piped gas or electricity, investments which are normally focused on the capital,” he told Africa in Fact.

However, the current dynamics of charcoal production result in environmental degradation, threatening biodiversity and carbon sinks, and some profits from the industry accrue to corrupt and violent groups. The DRC, Somalia, South Sudan, Kenya, Tanzania, and Mozambique all show alarming rates of loss of forest cover. Charcoal is not the only culprit: deforestation is also happening as land is cleared for farming, and through logging for timber. But charcoal is a significant contributor to this phenomenon, often in a dynamic relationship to other causes of deforestation.

Charcoal production is currently often locked into a damaging cycle with rural poverty, as extended droughts and low agricultural productivity push many away from farming and towards charcoal production, which in turn degrades the environment for agriculture further. Yet it doesn’t have to be this way: wood fuels are renewable resources which, if properly managed, can regenerate through the planting of new trees. Their impact on carbon emission is more complex: scientists are split on whether wood-based fuels are carbon neutral or not.

Simply stated, the positive case rests on the idea that newly planted trees absorb carbon dioxide, making up for the emissions caused through burning them. While Europe has come under fire for counting wood fuel used in wood- chip fuelled energy plants as carbon neutral, charcoal production in Africa is much more artisanal and does not necessarily result in large-scale conversion of forest to, say, agricultural land. If trees were selectively harvested, or replanted, forests would fare much better. Much of this calculation ultimately rests on the exact nature of the forest use, fuel production, fuel consumption, and their regulation.

The most extreme impact of the charcoal trade occurs in places where governance is contested, or where there is large-scale criminalisation of the sector. This is the case in the Virunga region of the DRC, where profits from the charcoal trade – amongst other things – flow to militias like the Democratic Forces for the Liberation of Rwanda (FDLR), leading to violent, lethal conflict over access to national parks. Effectively regulating the charcoal industry involves balancing competing interests in preserving forests and sustainable resource use, rural livelihoods and the needs of urban consumers. Yet, in sub-Saharan Africa, policies regulating the charcoal trade, if present at all, are typically paper tigers.

Charcoal vendors in Zimbabwe stand beside their wares in Harare, 2019 Photo: Jekesai Njikiz ana / AFP

When faced with criticism about forest degradation and the charcoal trade, states often talk big, but act little. Most states already have laws stipulating a licensing regime for charcoal production, which are intended to keep environmental degradation to a minimum while allowing production to take place. But weak state capability (especially in rural areas), corruption, and the way these things square up against the vital role that charcoal production plays in rural economies, mean that these laws are often barely enforced. The result is that most charcoal production, transport, and sale becomes informal and often illicit, and transporters become a prime source of petty bribes for police.

This is often to the benefit of large entrepreneurs who have “captured” a large slice of the urban market, often by buying state protection. Such clumsy, ineffective, and even insincere, attempts at regulation have the effect of making a massive industry largely illicit. The World Bank’s research in Mozambique, for example, estimated that only about 5% of the charcoal sector was operating under formal regulation. Other researchers have estimated that 80% of production in Tanzania is illicit. While weak regulation fails both at protecting the environment or upholding the interests of rural producers or urban consumers, the use of outright bans is even more destructive.

In Kenya, for example, the production and sale of charcoal is currently under a blanket ban, despite the fact that it remains vital to the basic needs of millions of Kenyan citizens. Other countries also periodically place total bans on the trade when pressure to curb forest degradation becomes intense, but then cannot meaningfully impose the regulation. Ten years ago, research by the World Bank on  East African charcoal value  chains  demonstrated  that bans can make criminality and corruption  in  the industry worse. Urban consumers simply cannot find alternatives to charcoal, as other fuels are far more expensive or unavailable.

Bans mean that a vital industry has to be conducted entirely clandestinely, increasing corruption and state collusion, and transporters pass these costs onto the consumer, driving up prices, which remain high even after bans are lifted. Yet to this day, bans continue to be a popular government reaction. Likewise, academics Esther Marijnen and Judith Verweijen, writing about their research for the London School of Economics, have challenged the idea that strict law enforcement can ever be a solution to the FLDR’s profits from the charcoal trade using trees from the Virunga National Park, as local inhabitants have no other sources of income, and the demand  from the nearby city of Goma is unceasing.

“With little collaboration from the population, can operations to dislodge armed groups from production areas be successful?” these authors ask. “With no alternative livelihoods, will further impoverishing offenders with arrest work as a deterrent?” There is, however, scope for intervention and reform. Researchers such as Mary Njenga from the World Agroforestry Centre argue persuasively that, if forests are properly managed and harvested, charcoal can be a renewable energy source that does not entail environmental destruction. Technical and value chain interventions, Njenga argues, have already been identified in improving the efficiency both of the kilns that are used to produce charcoal and in the stoves that burn it.

A woman sells charcoal in Asosa, Ethiopia, 2019 Photo: Eduardo Soteras / AFP

But regularising the charcoal economy will also be political. It will require tackling interests that benefit from the current (corrupt and poorly regulated) status quo, including powerful entrepreneurs who control profits in urban markets and resist state regulation of the sector. To regularise the trade in a way that is fair and supportive of the poorest, such measures will also have to take into account the realities of rural livelihoods and address highly contentious issues such as access to land. It is in these measures, perhaps counter-intuitively, where the most sustainable intervention will be found in even highly violent situations.

 

Simone Haysom is a South African writer and researcher, currently based in Geneva. She is the author of The last words of Rowan du Preez : murder and conspiracy on the Cape Flats, published by Jonathan Ball. Her research covers the political economy of crime and corruption in southern and East Africa.

A clear and present threat

Climate change: perceptions and experiences

Although nearly 60% of Africans are aware of climate change, some of the continent’s most influential countries lag behind in widespread awareness

Across the continent, African citizens have begun to witness the consequences of climate change, driven by human industrialisation and the pursuit of economic growth. Climate change is a gradual process of average climate modification, which is what has made it difficult to track or detect based only on human personal experience. Every day we experience variations in temperature according to the time of day or season of the year. This makes it challenging for ordinary citizens to really comprehend the risks associated with a global average temperature change of 1.5 or 20C.

Factors that influence Africa’s vulnerability to climate change stem from its high dependence on natural resources, limited financial and institutional capacity, low GDP per capita and high levels of poverty. Employment in agriculture remains high across the continent; as of 2019 an average of 44% (of total employment) was in agriculture. The graph below provides the estimates for agricultural employment for African countries that have more than 40% of total employment in agriculture. Long-term temperature and rainfall variations will have a serious impact on the livelihoods of African citizens.

Agriculture remains an important economic activity for more than half the continent and will be a sector greatly affected by climate change. In the recent Afrobarometer Round 7 (2017- 18) Survey, “climate  change” was not identified as the most important problem respondents believed their government should address, although many respondents cited water supply (23%), food shortages (17%) and agriculture (9%) as urgent issues that needed to be addressed. Those responses are embedded in the issues that climate change poses for African citizens. Climate change will certainly have an impact on any developmental progress made in these areas by African governments.

Preparing for, and adapting to, the effects of climate change will require a coordinated effort across the continent. North Africa will witness a reduction in arable land and a shortening of crop-yielding seasons due to a predicted decrease in rainfall and increase in average surface temperature. Similarly, East Africa and southern Africa are regions sensitive to climate variability and most farming practices are dependent on seasonal rainfall. West Africa’s vulnerability also relates to climate-sensitive economic activities such as livestock rearing, rain-fed agriculture, fisheries and forestry.

The Intergovernmental Panel on Climate Change (IPCC) predicts that, under a high-emissions scenario, land temperatures over the African continent are likely to rise faster than the global land average. National governments are well aware of the risks climate change poses for future development on the continent, but under-resourced and fragmented institutional frameworks have caused most countries on the continent to be among the least prepared to adapt to climate change, according to the Notre Dame Global Adaptation Initiative Index.

Building up resilience and capacity will require a coordinated effort by both national governments and their populations at large. Perceptions of climate change are arguably guided by national government and business rhetoric on the topic as well as by the personal experiences of ordinary citizens with regards to weather pattern variability. Afrobarometer’s Round 7 Survey conducted 45,823 interviews across 34 African countries, covering almost 80% of the continent’s population, between 2016 and 2018.

The survey included nine questions relating to climate change. The first question asked respondents to rate climate conditions compared to a decade ago; some 48% answered “worse” or “much worse”. An overwhelming majority of respondents from Uganda (85%), Malawi (81%) and Lesotho (79%) had witnessed worse weather conditions for agricultural activities. Only 23% of Mozambicans agreed that climate conditions had worsened, but this fieldwork was conducted prior to the devastating cyclones that hit the country in 2019.

Figure 3 indicates the distribution of respondents who had heard about climate change and believed they had experienced “worse” weather conditions over the past decade. Less than half of the South African citizens had heard about climate change and even fewer believed it had made weather conditions worse. Most ordinary citizens had heard of climate change, but opinions were mixed on whether it had made weather conditions worse.

Citizens were asked to rate whether extreme weather events such as drought or flooding had become “more” or “less” severe where they lived over the past decade. Almost half the respondents reported drought as being somewhat or much more severe, while 28% thought it had become less severe. Figure 4 shows the countries where drought has worsened. In early 2017 drought hit Uganda and its impact was felt most along its so- called “cattle corridors” and into its agricultural sectors. During this period, food insecurity rose to acute levels across most of the eastern and northern parts of Uganda.

The severity of flooding was similarly seen as much worse in both Uganda (73%) and Madagascar (67%), which could be closely linked to the increase in drought intensity. When examining the demographic splits for the continent, respondents living in rural areas were more likely to observe worse weather patterns than those living in urban areas. There was a similar contrast among age groups; respondents over the age of 56 were more likely to provide a more negative view of historical weather changes than the younger age groups.

Occupation also played a role in the kind of response citizens gave: six out of 10 respondents whose occupations were in agriculture, fishing or forestry observed worse or much worse climate conditions over the past decade. Exposure to news from any source was also associated with higher levels of awareness. However, those who got their daily news from either the internet or social media sources were much more likely to have heard of climate change. Part of being informed about climate change is understanding the meaning of the concept itself. Citizens were asked whether climate change meant negative, positive or other changes in weather patterns and on average two-thirds associated it with negative changes in the weather.

Figure 5 indicates whether those who had said “yes” to hearing about climate change had in fact an understanding of its negative effects on weather patterns. Zimbabwe stands out in that although most of their respondents had heard of climate change, only 31% thought it might be an adverse phenomenon. Among the continent’s most politically influential countries such as Ghana, Nigeria and South Africa, only around one in four citizens had a basic awareness of climate change. Overall, Africa’s perceptions of climate change lack any uniform pattern and awareness remains as varied as its natural environment.

Many countries are experiencing changes in their weather patterns and evidence suggests these are having a dire impact on farmers and food security. Although nearly 60% of Africans are at least aware of climate change on average, some of the continent’s biggest players lag behind in widespread awareness and understanding. Collective awareness and an understanding of climate change by ordinary citizens will be crucial when governments try  to adapt and mitigate its consequences for socio-economic development. Capacity building for early warning systems and mitigation strategies are important to assist those citizens who are most vulnerable to the effects of climate change.

Monique Bennet is a senior researcher at Good Governance Africa. She has a keen interest in data science, data visualisation and statistics using the R programming language. Throughout her studies, research topics such as development, democracy and the environment within the context of developing countries have been her focus areas.

Has the time for hydropower passed?

Hydroelectricity: for and against

Africa has vast untapped sources of hydroelectricity but climate change, particularly droughts, raises questions about sustainability

An aerial view shows the Kariba Dam and the Kariba lake in Kariba on January 20, 2020. From the Zambian side the plant is managed by ZESCO, a state-owned power company. – In the absence of sufficient rain, the Kariba dam, the main source of electricity for Zambia and Zimbabwe, is expected to operate at only 25% of its capacity in 2020. (Photo by Guillem Sartorio / AFP)

Hydroelectricity has an attractive appeal for Africa. It can provide a baseload – a reliable source of electricity – not easily attainable from other clean energy sources, and it also allows grid stabilisation tointegrate more green power. Only about 11% of the continent’s hydropower potential has been tapped but regional plans to more than double hydro production by 2030 exist. Yet, future weather changes such as droughts put power generation at risk.

Ambitions for universal access to power by 2025 mean connecting 200 million households, nearly doubling grid generation, according to a 2018 African Development Bank (AfDB) report. Despite being home to 17% of the world’s population, Africa accounts for just 4% of global power. The continent does, however, have the highest percentage of untapped technical hydropower potential in the world, says Cristina Diez Santos, International Hydropower Association (IHA) Africa analyst.  With energy demand growing twice as fast as the global average, she notes, Africa has the opportunity to use its vast untapped hydropower resources to become the first continent to develop its economy using renewable energy.

Africa has a total installed capacity exceeding 37 MW, accounting for 15% of the total electricity share in the region, but that still leaves 600 million people – about half of the continent’s population – without electricity. For many African nations, hydroelectricity could address this energy gap. The AfDB, through the New Deal on Energy for Africa strategy, a partnership between the bank, governments and other stakeholders that launched in 2016, has backed power projects contributing around 2.78 GW of additional generation capacity, out of which about 755 MW, or less than 30% is from hydropower.

“The sustainable development of Africa’s significant, yet largely untapped hydropower potential, will aid the achievement of the continent’s ambitions in terms of energy access and increased generation capacity to underpin economic development,” Daniel-Alexander Schroth, the acting director for Renewable Energy and Energy Efficiency at the AfDB told Africa in Fact. “We are [also] cognisant that the complex nature of hydropower projects requires extensive planning, continued partnership, cooperation and learning, especially in the face of climate change challenges.”

Over the past 15 years, the AfDB has invested $560 million in some 20 hydropower projects with a total capacity of over 1.8 GW, out of which around 570 MW are already installed, and the remaining 1.2 GW are yet to be commissioned. The operations supported by the bank’s funding range from small-scale hydro plants such as Sahanivotry in Madagascar (15 MW) and Buseruka in Uganda (9 MW), to large-scale hydro projects like Itezhi-Tezhi in Zambia (120 MW) and Bujagali in Uganda (250 MW). “The threat of climate change will not stop hydropower continuing to be a large part of Africa’s energy mix,” says Malama Chileshe, energy economist at the Common Market for Eastern and Southern Africa (COMESA) in Lusaka, Zambia.

The Democratic Republic of Congo (DRC) has Africa’s largest hydropower potential, estimated to be 100,000 megawatts – that is, almost half of the current installed generation capacity on the entire continent, says Chileshe. An estimated $14 billion is required to complete the Inga III hydroelectric mega- dam in the DRC, according to an October 2019 report by the NGO Resource Matters and the Congo Study Group. On completion, the Inga III will become the largest hydropower plant in sub-Saharan Africa. But the DRC, Namibia, Zambia, Ethiopia, Togo, and Sudan are the only African nations that get more than 90% of their power from hydro. “[Hydropower] is barely touched,” says Chileshe.

“It therefore makes sense that efforts should be made to develop the available resource, especially
considering the fact that currently the bulk of power production comes from thermal sources considered environmentally unfriendly.” However, in Africa, the impact of climate change on the power sector and the energy-water nexus cannot  be ignored. Any African countries that are dependent on hydro power will be hard-hit in times of drought. For example, as they had in 2015, in 2019 Zambia and Zimbabwe both experienced erratic rainfall patterns, which resulted in low water levels at the Kariba dam; this led to a loss of more than 70% of electricity production from the dam’s hydro power plants.

In Kenya, a drought between 1999 and 2002 drastically affected hydropower generation, including a 25% reduction in capacity in 2000, Chileshe says. Kariba dam, a double-curvature concrete arch dam in the Kariba Gorge of the Zambezi river basin between Zambia and Zimbabwe, was designed to produce 1,200 megawatts on the basis of 50 years of records of the Zambezi river’s flow. In the past 60 years of its operations, Kariba has spilled five times – illustrating that the original calculations were sound, according to Eddie Cross, a Bulawayo-based Zimbabwean economist. Zambia and Zimbabwe have now doubled generation demand, which has proved to be beyond the dam’s capacity, with water for generation purposes almost running out in 2019, Cross says.

But this year has seen exceptional rains in the Kariba’s catchment areas. At between 55 to 60 billion cubic metres of water inflow, the river’s flow is four times that of 2019, and it is expected that the dam will reach full capacity. “What we are now doing is moving towards using the dam as storage and generating significant solar energy from the sun, and running the Kariba generators at night,” he says. “The whole system needs to be managed,” he cautions. “We have to investigate barrages and river flow technologies below large dams.” Cross argues that hydro is still the best choice for Africa – “it’s cheap and clean” – but he advocates using a mix of technologies.

Wind, hydro and solar are also possible, while coal is still critical for baseload, but should beminimised. While Africa produces just 2% of the world’s energy-related CO2 emissions, climate-related effects
are disproportionately higher in the region, which highlights the importance of a diverse power mix and regional interconnections, Santos says. “Hydropower is a clean power source, which helps to offset the impacts of fossil fuels. Hydropower infrastructure also provides essential adaptation services to reduce the impacts of climate change such as floods and drought,” she told Africa in Fact.

Chileshe says that while developing the hydro potential in places where the rain patterns are still good is important, there is a need for long-term thinking on how Africa will manage the energy- water nexus. Apart from adapting to climate change through diversifying the energy mix to include solar, wind, and geothermal, the continent has to be more interconnected, he argues. “Renewable energies such as solar and wind are associated with issues of variability, due to the constantly changing nature of weather patterns,” Chileshe told Africa in Fact.

These sources of energy need to be coupled with sources that are more reliable, such as hydro, where flowing water is available. Regional integration can also play a role by enabling nations to exchange electricity from regions of plenty to regions of scarcity, he says. For example, when its dry in one  region, it may be raining in another. Endeavours to interconnect the power systems of Kenya, Tanzania and Zambia such as the Southern African Power Pool (SAPP), begun in 1995, and the Eastern Africa Power Pool (EAPP), begun in 2005, facilitate this type of trade, Chileshe adds. Pairing hydro and renewable sources of power could also help manage the effects of climate change, he suggests.

In Scandinavia, for example, Norway has plenty of hydropower plants, while a neighbouring country, Denmark, has wind. Each of these countries can switch off its own form of generation and rely on electricity from the other’s source, depending on environmental and other conditions. “The hydro potential in the African region could be managed in the same way,” Chileshe says. The AfDB also works with regional power pools to ensure that the sustainable development of hydropower resources is underpinned by strong policy, regulatory frameworks, developed regional power markets, sustainable financial and operational performance in the face of climate change challenges, says Schroth.

Santos agrees, saying that if not managed effectively, climate risks associated with dependency on precipitation can lead to shortcomings in terms of a plant’s technical and operational performance. In May 2019, IHA launched a guideline on hydropower climate resilience, which helps decision makers to make effective choices when planning, developing and operating a hydropower project. But, though “cheap and clean”, not everybody thinks hydropower is the right path for Africa. “It is not feasible,” says Siziwe Mota, Africa programme campaigner for International Rivers, which has been assisting dam-affected communities worldwide since 1985, as well as working to protect rivers and the people who depend on them.

“As large dams continue being constructed on the continent, the destruction of river ecosystems and displacement of communities, destruction of livelihoods, and an increase in countries’ debt burden is experienced,” she says. Dams, she adds, also fall short of achieving their intended purpose, especially in the face of climate change and increasingly erratic rainfall, which can reduce energy and water benefits from dams and increase the risks. In March last year, for example, power supply from the Cahora Bassa dam was cut when Cyclone Idai hit Mozambique, highlighting yet another climate-induced disaster that makes big dams vulnerable.

“Dams and reservoirs are significant sources of carbon dioxide and methane, which are greenhouse gases and should by no means be considered ‘green’,” she told Africa in Fact. International Rivers has worked to ensure that dam developers do not gain access to climate finance, such as the Green Climate Fund, for dam projects. Unfortunately, Mota says, African countries are using funds that could be invested in clean, sustainable, renewable, decentralised, alternative sources of energy to either construct, rehabilitate or expand dam projects, leaving little room for investment in clean technologies such as wind, solar or micro- hydropower.

“Hydropower’s time has passed, even though Africa has developed only about 11% percent of its potential,” says David Zarembka, the former coordinator of the African Great Lakes Initiative, who lives in Lumakanda, a small town in western Kenya. “Those [projects] that are only in the discussing, planning, and financing stages should be dropped. I think that some of the dams now under construction will never be completed.” Zarembka argues that dams take too long to build, usually a decade or more for a large dam. They can also be hazardous if they breach, as happened recently with a dam in Kenya. “Solar, wind, geothermal, and storage are becoming much cheaper than hydro and can usually be built in a year or two rather than a decade or more,” he says.

The amount of hydropower under construction or in the planning stages in sub-Saharan Africa far exceeds its needs for the next decade or two, he argues. Some of those under construction, such as the Grand Renaissance dam in Ethiopia, will become white elephants, he told Africa in Fact. Facing the future should involve energy policy planning that is inclusive of communities and addresses their water and energy needs, while addressing broader social, economic and environmental concerns, observes Mota. “The key challenge for Africa is not merely to increase energy consumption, but to also ensure equitable access to cleaner energy sources, guided by good energy planning,” she adds.

 

Munyaradzi Makoni is a journalist based in Cape Town, South Africa. He writes mostly on agriculture, climate change, environment, health, higher education, sustainable development and science in general. Some of his work has appeared in Hakai magazine, Intellectual Property Watch, IPS, Mongabay, Nature, Nature Index, Physics World, Science, SciDev.net, The Lancet, Thomson Reuters Foundation, and University World News, among others.

Can carbon trading work in Africa?

Carbon emissions: room to grow

There’s big potential for Africa to participate in international carbon markets given its ability to contribute to greenhouse gas mitigation

Women work at a clothing factory funded through the sale of carbon credits in Maungu, near Nairobi, Kenya, 2011 Photo: Tony Karumba / AFP

Carbon emissions trading is a market-based mechanism for trading pollution credits among countries. It includes a range of policy instruments aimed at assisting industrialised countries to achieve
their emissions targets by allowing reductions to take place where they cost the least.
The trade works in several ways: International Emissions Trading (IET), the Clean Development Mechanism (CDM), and Joint Implementation (JI). The IET system involves a scheme called “cap and trade” in which governments or intergovernmental bodies such as the European Commission (EC) hand out licences to pollute (or “carbon permits”) to major polluting industries within their boundaries.

Industries can then trade these permits with one another to meet their emissions reduction targets.
Cap-and-trade schemes are the most popular way to regulate carbon dioxide (CO2) and other emissions. The scheme’s governing body begins by setting a cap on allowable emissions. It then distributes or auctions off emissions allowances that total the cap. Member companies that do not have enough allowances to cover their emissions must either make reductions or buy another company’s spare credits. Members with extra allowances can sell them or bank them for future use. Cap- and-trade schemes can be either mandatory or voluntary.

Africa accounts for only 2% of the trading in the global carbon market. Of that 2%, South Africa and North Africa enjoy the largest portion of the projects under the Clean Development Mechanism (CDM), the main carbon market resulting from the Kyoto Protocol, with the rest of Africa contributing a paltry 0.6%. According to Oscar Reyes, a researcher with Carbon Trade Watch, these figures render Africa marginal to the carbon market, and the trade has been irrelevant to the continent’s efforts to tackle climate change. According to the World Bank, China has dominated the CDM market since its inception, accounting for about 66% of all contracted CDM supply between 2002 and 2008, and 72% of the market in 2009.

India and Brazil rank second and third on the list of sellers in terms of volumes transacted. One reason why the African carbon market is less attractive relates to how electricity is generated. Access to electricity is a major challenge across much of Africa, with less than 25% – and, in some countries, as little as 5% – of the population enjoying access to grid electricity. Thus, the World Bank has calculated that the 47 countries in sub-Saharan Africa, with a combined population of 800 million people, generate as much power as Spain, with a population of 45 million.

The lack of carbon-reduction investment opportunities in the power sector and the limited number of carbon-intensive industries outside northern Africa and South Africa implies that the rest of the continent is not well positioned to influence the direction of the debate around carbon trading. The types of projects that could deliver livelihood benefits to Africans, such as renewable and other small- scale energy projects, are not “cheap” options of carbon abatement, and are therefore less likely to attract the big investors. Given the limited opportunities for expanding the carbon market in Africa through the CDM, attention has shifted to projects that can be delivered through the voluntary market.

These include improved stove and tree planting projects, which have been controversial for a variety of reasons, including the difficulties involved in verifying the offsets. According to ecologist Thomas Crowther and colleagues at ETH Zurich, a Swiss university, a tree can remove seven tons of carbon dioxide from the atmosphere during its life. If so, some five billion trees would need to be planted per year to counter current emission levels globally. Moreover, planting trees to soak up carbon can have detrimental knock on effects. As Robert Jackson argued in a December 2005 presentation at Duke University in North Carolina, growing plantations of fast-growing trees uses a lot of water.

This can reduce “the water available for drinking and irrigation, and harm local aquatic ecosystems”, according to the journal Nature (December 2005). Moreover, “forest soils are saltier and more acidic, compared with other types of plant cover such as crops or grasslands”, Jackson and his colleagues found. Developing  countries, particularly those in sub-Saharan Africa (SSA), remain marginalised in global carbon markets despite significant mitigation opportunities in agriculture and  forestry.  However, Africa has significant potential for renewable energy, a key driver of the carbon emissions reduction.

Yet Africa’s share of the carbon markets remains low, as already mentioned. It is puzzling, therefore, that the proponents of carbon trading continue to tout the benefits it offers to the poor in Africa,
in the face of mounting evidence to the contrary. For instance, a project in the Bukaleba Forestry Reserve in Uganda, intended to offset the greenhouse gas emissions (GHGs) of a coal-fired power plant to be built in Norway, clearly illustrates the conflict of interests of the offset company, host countries, and the needs of local communities.

The Ugandan government received a meagre once-off fee of $410 and an annual rent of about $4,10 for each hectare of plantation – an absurdly low lease price, given the huge carbon credits the Norwegian company (Tree Farms) was aiming to sell. The project was also responsible for evicting 8,000 people living on the land from 13 villages, depriving them of their livelihoods, and probably driving them to clear land elsewhere. Africa’s share of voluntary carbon markets is also still small, then, as compared to the rest of the world. It’s a huge shortfall considering the potential benefits of carbon offset revenue for sustainable development on the continent.

However, many African countries, including Kenya, Ghana, Mozambique, Uganda and the Democratic Republic of Congo have seen a surge in international demand for offset projects in the voluntary carbon markets such as delivering clean cook stoves and water purification devices, which are likely to increase participation in these markets (Bloomberg Energy, 2013). There are several reasons why Africa has failed in the carbon markets. Some scholars have blamed this on uncoordinated marketing efforts, as well as regulatory and policy challenges. They argue that the implementation thereof and global connections can make it a challenge for carbon trading to work.

There have also been circumstances under which baseline-and-credit CDM schemes have resulted in the maltreatment of indigenous peoples and their environment. Other scholars argue that cases of trade fraud and accounting discrepancies have hindered the development of these markets in Africa, with constraints ranging from the structure of the carbon markets themselves to the continent’s own unique situation; the perennial challenges of doing business in Africa have also affected its access to international carbon markets.

Yacob Mulugeta from the University of Surrey’s Centre of Environment and Sustainability says adequate legal and institutional frameworks are lacking, or are weak, and barriers to trade and investment, which may inhibit access to new technologies, and the high investment risks in some African countries, have also resulted in potentially lower prices for CERs. Another barrier to trade, he says, is the overall policy framework in potential host countries, which may include policies not conducive to CDM, for example high levels of taxation, high interest rates, a lack of support for foreign direct investment and uncertainties around fiscal policies.

Financing has also been cited as a major barrier to renewable energy and energy efficiency (RE/EE) projects, which deliver carbon emission reductions and sustainable development benefits to low-developed countries in Africa. But Africa’s potential to participate in international carbon markets is large, given its ability to contribute to greenhouse gases mitigation. Its potential for renewable energy generation, climate smart agriculture and extensive forestry sector all provide huge GHG mitigation potential. There are also vast areas of low productivity land where management could be altered to increase carbon stocks and create credits.

Overcoming the challenges that hinder their exploitation could see Africa increase its ability to tap into the international carbon markets. If Africa is to benefit in the carbon market, it will need to start leveraging other sources of finance, increasing its investments in renewable energy, catalysing the continent’s carbon markets by putting in place regulatory systems, and increasing public funding for seed capital for carbon reduction projects. Africa will need to develop and implement its own climate and carbon finance strategy, built on the recognition that the continent can contribute most effectively to mitigating climate change by promoting sustainable land-use practices.

 

Tom Mboya is a Kenyan journalist working with an INGO in Nairobi. He was the 2009 Joel Belz International Media Fellow and the 2017 Coaching and Leadership Fellow, which is a programme offered by The Media Project and the Poynter Institute. His works have been published around the world.