African policymakers warned against pressure over climate-linked trade rules

Policymakers in Africa should not bow to pressure to introduce broad climate-linked trade regulations aimed at reducing emissions in the African Continental Free-Trade Area (AfCFTA) agreement, say trade law experts.

Such regulations could prove overly burdensome for African countries that have to rely on fossil fuels to power industrialisation initiatives that would help reduce poverty and unemployment in the world’s least industrialised region, they say.

Taku Fundira, a market intelligence consultant at the Trade Law Centre in SA said that the AfCFTA contains little about “climate change concerns”, but it is a trade agreement and policymakers “should resist the temptation to add onerous obligations that duplicate climate initiatives that were already in place”.

African countries need some flexibility in the way they transition towards low-carbon economies, and “calls for continent-wide bans” for development finance institutions to stop funding all fossil fuel developments are “misplaced given Africa’s continued reliance on fossil fuels”, Fundira said during a recent webinar hosted by the Africa Policy Research Institute.

Though Africa is home to about 15% of the global population, it contributes only 3.8% to all greenhouse gas emissions. In addition, Africa is disproportionately vulnerable to climate change, not only as some regions are predicted to be heavily affected by more intense and more frequent extreme climate events such as droughts and floods, but also due to high rates of unemployment and poverty which make it more difficult for people to adapt to climate change and to recover from damaging weather events.

Calvin Manduna, an international trade law consultant at the Washington-based consultancy firm ACP International Trade advisers, said Africa is also the world’s least-industrialised region and accounts for a low, 1.9% share of global manufacturing.

False impression

For countries in Africa to address challenges such as poverty and unemployment it would need to “replicate the industrialisation trajectory of the West and Asia that relied on fossil fuels” to grow the economy, said Manduna, who is also a former trade expert with the African Development Bank

As manufacturing accounts for 30%-40% of Africa’s total emissions, mostly from energy sector, it creates the false impression that the continent is highly fossil fuel dependent, despite this economic activity being concentrated in only a handful of countries. He said that 60% of all manufacturing output is from Egypt, Morocco, Nigeria and SA.

African countries have already shown “great commitment on climate change” and have made “significant” commitments for greenhouse gas emission reductions.

However, given the limited resources that African countries have, and the continent’s low emissions share, there is understandable caution among African leaders to take on extensive, additional commitments on climate change mitigation in an continent-wide agreement such as the AfCFTA without clear financing commitments for such interventions.

Manduna said it is important to accept that fossil fuels will continue to dominate the African energy mix for some years, and the continent is expected to continue to develop gas as an important source of energy.

The promotion of trade liberalisation is at the core of AfCFTA and “countries should not be penalised if they want to pursue, in the short-term, these energy options given the continent’s low share of global emissions”.

erasmusd@businesslive.co.za