Adaptation and green minerals lead Africa’s 2024 climate agenda

A range of strategies are under discussion to speed up the flow of climate finance by the African Group of Negotiators (AGN) preparing for the UN COP 29 Climate Summit in Baku, Azerbaijan on 11-22 November.

Their concerns about shortfalls in public funding are heightened by a wave of elections in rich economies — in the European Union, the UK and the United States — in which rival parties are prioritising domestic priorities and budgetary prudence.

These prompt questions about what can be achieved in Baku. Some experts say it’s time to rethink how the summits work.

The reality has fallen short of expectations for COP on climate finance, said Carlos Lopes, chairman of the African Climate Foundation and a professor at the Mandela School of Governance at the University of Cape Town, in South Africa.

"We are in world of contradictions and there is a big gap between what is said and what is done," says Lopes." … and that gap is mistrust."

The model of the UN Climate summits and its policy agenda has run its course, says Lopes who was one of the team of African experts appointed by the United Arab Emirates for COP 28 in Dubai, which attracted 85,000 attendees, well over half representing commercial interests.

"It’s no longer possible under such circumstances to have a gathering of 500 people negotiating language and discussing paragraphs that are not very meaningful if we are looking at the 14 years of accumulated deficit between promises and implementation," he said.

The negotiations have become a bit of a distraction, says Lopes. "People are expecting that most of the action will be among the key players, be it in the corporate world or powerful countries and groups of countries in terms of what can really change to reduce the level of emissions and to increase our capacity for adaptation."

The next big push, argues Lopes, will be for regulatory reform to change economic incentives. That means changing the rules on fossil fuel subsidies. Such subsidies, direct and indirect, are running at around $7 trillion a year, according to the IMF.

That level of subsidy puts into perspective the Paris-based International Energy Agency’s target of $4trn a year in renewable energy and the green transition.

"The old negotiating model has exhausted its purpose because we continue to separate climate and development and they are one and the same," says Lopes.

Key to most of the region’s development strategies is processing more export commodities at home, adding value and creating jobs. Governments want the rush for green minerals in Africa to build up their industries.

That dominated the Mining Indaba in Cape Town in February where western companies negotiated with officials from Congo-Kinshasa, Zambia, and Namibia for licences to mine cobalt, copper, nickel and lithium and the other ‘green minerals’. Many are trying to catch up with China’s earlier investments.

The European Union’s and the United States’ pledges of billions of dollars of backing for the Lobito Corridor from the Zambia/Copper belt to Angola’s seaboard excited much interest, and some more cash. This corridor will be the main route for green minerals to the markets in Europe and the US.

There has been less progress on the memorandum of understanding signed in Washington DC in December 2022 on the partnership between Congo-Kinshasa and Zambia to build electric vehicle battery factory, using local sources of cobalt and lithium.

South Africa’s Sibyane Stillwater has recently taken a 80 percent stake in a refinery in Finland which will process lithium from its mines. Also at the Mining Indaba, the Nigeria-based Africa Finance Corporation committed to invest $100m in Kobaloni Energy’s planned cobalt sulphate refinery in Zambia, the first in Africa.

For now, China refines about 75 percent of the world’s cobalt production, a key component in electric vehicle batteries. And at least two-thirds of world production is sourced from Congo-Kinshasa but Zambia plans to step up output.

Cobalt plummets

Its mining ministry officials were talking up the KoBold copper and cobalt project, backed by Richard Branson, Bill Gates and Jeff Bezos, citing data suggesting it could produce 400,000 tonnes a year, making it the biggest new copper mine in the world. Raising money for cobalt refineries is complicated by uncertainties about technology and the market. The price for cobalt dropped from $80,000 a tonne on the London Metal Exchange in 2022 to $28,000 at the beginning of this year.

After the the IMF and World Bank meeting in Marrakech last October and the COP28 summit the following month, multilateral financial institutions are expanding operations. The Fund and the World Bank pledged to boost climate finance to developing economies but are yet to agree on some of the new funding routes

The $1.3bn credit to Ivory Coast from the IMF’s Resilience and Sustainability Facility, announced in February, responds to the lack of climate finance to Africa.

As one of Africa’s stronger and less indebted economies, Ivory Coast was an easy choice for the IMF. Although its economy was growing faster than many of its neighbours, Ivory Coast was facing "rising temperatures, rainfall disruptions," said the IMF. It added that "…flooding, rising sea levels and coastal erosion are major challenges and represent recurring risks for resilient, sustainable and inclusive economic growth."

The only other substantial climate finance credit from the IMF to an Africa economy was a $319m credit to Rwanda disbursed over three years. Most IMF credits to the region since the pandemic have been for budget support and bail outs for countries hit by escalating debt servicing costs.

Both the volume and type of climate finance are running far behind requirement, says Carlos Lopes. "Much of the finance goes on mitigation projects but there is a serious shortfall in funding and focus on adaptation projects which is a priority for Africa," he said.

Last year’s operationalisation of the Loss and Damage Fund at COP 28 to developing economies opened up a significant new channel for climate finance, said Lopes.

Most officials in Africa told us they regarded the new fund as one of the key achievements of COP28 but they echoed Lopes’s concerns about overall shortfalls of funding, and the lack of attention to adaptation.

Mohamed Nasr, who headed Egyptian’s presidential team for COP 27, said: "There is a need for adaptation in agriculture, water, urban planning … science shows that these are the most impacted areas. While we follow the science on mitigation, we fail to do so for adaptation".

South Africa’s representative on the International Panel on Climate Change, Maesela Kekana, said that calls for progress reports on adaptation projects and funding weren’t popular at COP 28. But they were key for Africa as a bloc negotiating for its priority policies.

NDCs and LT-LEDS

In preparation for COP 29 in Baku, Kekana said that African countries were updating their Nationally Determined Contributions (NDCs as part of the global climate plan to cut emissions and adapt to climate impacts) and their Long Term — Low Emissions Development Strategies (LT-LEDS) for submission. "This is key for us, especially as a bloc," said Kekana.

The African Group of Negotiators will play a key role in coordinating a continental position in the key policy areas ahead of the Baku summit. Chaired by Zambia last year, it boosted cooperation between governments at the COP 28 summit — despite differences on issues such as carbon trading.

Kenya strongly backs carbon trading as a way of generating more climate finance. Its stance is based both on its energy mix, over 50 percent geothermal led by the EU-funded Olkaria project in Naivasha which generates 963 megawatts and what officials see as potential revenue from carbon trading.

President William Ruto’s government has renounced further oil exploitation in the country, and his officials have been encouraging neighbouring states to look at geothermal technology for their energy needs. Regional experts reckon that Kenya and Ethiopia could each generate 10,000 megawatts with enough investment.

South Africa’s Kekana is less convinced. His government has commissioned a study which found that the country could lose $2bn a year in trade with EU economies after Brussels launches its Carbon Border Tax Mechanism.

South Africa and other countries with heavy industry, adds, would be badly hit by the EU’s new rules blocking commodity imports without certification that their production hasn’t entailed deforestation.

He says that South Africa is yet to start negotiations on the rules with the EU but will seek an extension of deadlines. "The EU has put a lot of resources on conservation and it is now trying to stop the leakage through these regulations"

For South Africa, these new rules come just as it embarking in its just energy transition, says Kekana. And they could have the unintended consequence of driving countries that can’t or choose not to comply with them into trading with each other. "This will be a setback on the decarbonisation process."

These issues and governments’ positions on them will top the priority list for the African Group of Negotiators (AGN) as they prepare for the Baku summit.

The AGN is due to choose its new chair early this year following the exit of Zambia’s Ephrahim Mpweya Shitima in the wake of COP 28. Insiders say that east Africa is tipped to produce the next AGN chair with Tanzania and Rwanda pushing their candidates.

This article was developed with the support of Journalismfund Europe by our friends at Africa Confidential in collaboration with journalists affiliated to Penplusbytes, a Ghana-based media supporting NGO.