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Combating climate change- China’s contribution to the expansion of Africa’s renewable energy sector

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On 7 December 2009, the world’s leaders met in Copenhagen for the 2009 United Nation’s Climate Change Conference. The 12-day summit ended with the ill-conceived and non-legally binding Copenhagen Accord, a rather weak statement that does not include any binding commitments for reducing carbon dioxide emissions - the greenhouse gas that is blamed for the bulk of global warming - and thus receives the most attention by media and such summits.(2)

The failure of the Copenhagen Summit highlights two important facets of contemporary attempts at combating climate change. Firstly, leaders from either side of the North-South divide are quick to point fingers at their developed or developing counterparts, blaming these for the failure of treaties on greenhouse gas emission cuts.(3) Secondly, there exists a perceived tension between halting global warming and simultaneously pursuing economic growth; as well as between protecting the environment and ending energy poverty.

Too often, countries view the investment in cleantech technologies as a trade-off, the opportunity cost being faster economic growth. The interrelationship between these two issues played a dominant role during the 2009 climate change conference, where most countries were reluctant to agree on setting binding emission targets for their own economies, if the other members of the international community did not do the same. Indeed, China refused to do so from the outset and, often viewed as hiding behind Africa, argued that it was unfair for the United States (which emits 19.9 tonnes of CO2 per capita annually) to demand that a continent which emits merely one tonne of CO2 annually, to cut its emissions.(4)

China: sustainable energy pariah or paragon?

Since 2007, China is the world’s largest emitter of greenhouse gasses, having released an estimated 6.2 million tonnes of CO2 into the atmosphere, 8% more than the United States, in 2009. Indeed, a recent report finds that the increase in emissions by the rising economies of China and India (9% and 6% respectively) have actually nullified the emission cuts achieved by the industrialised countries.(5) The emerging powerhouse is thus often blamed for fuelling climate change, especially considering that coal is China’s primary and cheapest energy source, contributing two-thirds of the country’s energy needs.(6)

However, the above distinction fails to take into account CO2 emissions per capita. Thus, although China may generate one-fifth of the world’s total greenhouse gas emissions, its per capita emissions are merely one-fifth of those of the United States. Secondly, it is vital to consider China’s role as the “world’s factory.” While many Western companies have off-shored their manufacturing units to Asia and most Western economies are now service-oriented, China produces and exports the bulk of these economies’ goods. Thus it could be argued that China’s CO2 emissions are partly fuelled by Western consumers buying Chinese goods.(7)

Further, the Chinese Government has recently embarked on a 10-year plan under the auspices of the newly created National Energy Commission, which aims at having 15% of national energy generated from low-carbon sources by 2020.(8) This ambitious plan focuses on energy efficiency as well as renewable energy, with the Government planning to set aside billions of dollars for new investments in wind and solar power projects (wind and solar power generation having already doubled year on year over the past 5 years). In addition, legislators intend to introduce a carbon tax in 2012, the revenues of which will go into financing renewable energy R&D and low-carbon energy sources.(9)

With US$ 33.8 billion worth of new financial investments, China is now at the forefront of investment in renewable energy, outpacing both the United States and United Kingdom in 2009 (these having invested US$ 17.9 billion and US$ 11.7 billion respectively). China experienced a surge in investments in its cleantech industries in 2008 and 2009, and while the West was grappling with the consequences of the global financial crisis, China’s renewable energies sector experienced uninterrupted growth.(10)

China’s efforts to diversify its energy mix reflects a common national security concern - ensuring a stable energy supply to further fuel strong economic growth rates, while simultaneously ensuring that this growth is sustainable. This means that mitigating the potential negative impact of climate change requires a strategy composed of investing in and utilising low-carbon technologies, but which does not curb economic growth in the process.
 


Africa and climate change challenges

The phenomenon of global warming presents both an endogenous and exogenous challenge to Africa. On the one hand, the continent’s poor often live in environmentally degraded areas, with their poverty further fuelling the unsustainable utilisation of resources. A good example is provided by the incidence of deforestation in Africa, where forests are cleared for additional living space or agricultural usage, the wood is needed for housing materials, heating and cooking, or to sell and export in order to earn additional income.(11)

Not only does deforestation lead to a loss in soil fertility, threats to biological diversity, declining land productivity and increased exposure to tropical diseases, it also contributes to global warming as there are fewer trees to bind those greenhouse gases which are responsible for an increase in the world’s temperature. Indeed, deforestation contributes between 20% and 25% to global carbon emissions annually, and with Africa’s tropical forests disappearing at an average rate of 4 million hectares per year, makes deforestation the largest source of carbon emissions on the continent.(12) The poor are thus simultaneously contributing to climate change and are the most vulnerable to global warming’s detrimental effects on their livelihoods through the expected rise in sea-levels, droughts and desertification.

On the other hand, it has been calculated that the unsustainable burning of fossil fuels and the resulting carbon dioxide emissions from the industrialised world far outweighs the contribution from the developing countries, with the Organisation for Economic Cooperation and Development (OECD) being responsible for 51% of emissions.(13) Yet because of the Global North’s affluence and level of development, these countries possess the technology that allow them to be better able to deal with the consequences of global warming, whereas the phenomenon (apart from disproportionately affecting developing countries) is likely to exacerbate Africa’s challenges of inequitable distribution of health care, food security and access to clean water, thereby increasing the continent’s constraints on economic growth and development.(14)

Add to these challenges the unique constraints which Africa faces when it comes to energy. Currently, almost 75% of sub-Saharan Africans live without electricity and it is estimated that of the US$ 93.3 billion required to fulfil Africa’s infrastructural needs, 41% constitute spending that would be needed for energy only. Energy poverty thus constitutes a massive challenge to Africa, particularly considering that “infrastructure has generated more than half of Africa’s improved economic growth since 2000”.(15) Again, there exists a tension between generating energy to fuel Africa’s economies and thus lessen the constraints on economic growth, and the potentially devastating effects if the earth’s temperature were to rise by another 2°C. The cheapest – and thus dominant – form of electricity generation is (as in China) coal. To demonstrate, 80% of Botswana’s electricity comes from one coal-fired power plant and South Africa’s Eskom continues to rely on coal to increase the country’s energy capacity.(16) Coal, however, is the least desirable form of energy in achieving a decrease in greenhouse gas emissions.

The problem faced by Africa in easing the tension between protecting the environment and boosting economic growth consists – as so often – of a lack of “financial, technological and capacity-building” resources.(17) Africa’s infrastructural spending needs stated above refer only to energy; these statistics do not make provision for the spending needed on renewable energies. In addition, the continent does not yet possess the technological capacity to independently embark on investments in cleantech, which are both energy and cost efficient. This particular issue proved to be a further sticking point leading up to, and during the 2009 Copenhagen Summit, with one African leader putting a price tag of US$ 67 billion annually on the mitigation and adaptation to climate change.(18) The World Bank sets this figure at US$ 140 to US$ 175 billion annually over the next 20 years for the entire developing world, with an additional US$ 265 to US$ 565 billion required for financing.(19)
 

Enter China

Although Africa may not as yet possess the financial or technological capacity necessary for engaging in a rapid expansion of its renewable energies sector, the continent is endowed with ample solar, wind, hydropower and bio-energy resources. Africa thus presents a potentially vital niche in the global market for cleantech energy.(20) China is already capitalising on this massive investment opportunity.

With China’s Sino Hydro Corporation building wind farms, as well as hydroelectric dams worth an estimated US$3 billion in Ethiopia(21), Mozambique and Kenya; Yingli Solar providing photovoltaic power to 20 soccer training centres across Africa (thus supplementing its FIFA World Cup sponsorship); and the Chinese Government pledging to build 100 cleantech projects on the continent, the Asian power is again at the helm of renewable energy projects in Africa.(22)

The expansion of the cleantech sector in China has brought enormous economic benefits to the Asian economy. With wind power generation having grown by over 100% (2005-2009) and the country generating 45% of the world’s photovoltaic in 2009, China has created an industry with an estimated value of US$ 17 billion and expanded employment in the energy sector by 300,000 to 1.5 million in 2009.(23) China will be hoping to emulate the enormous profit potential of the renewable energies sector in Africa. Indeed, the Southern African cleantech sector, aided by foreign investment, is expected to grow nearly ten times in the next 5 years and generate revenues of approximately US$ 260 million by 2015.(24)

By investing in and providing loans to African renewable energy expansion, China is effectively utilising its vast technical and financial capabilities to help the continent realise its energy needs, thus creating opportunities for economic growth, while simultaneously making a contribution to the combat against climate change.
 

NOTES:

(1) Fiona Dwinger is an Analyst in Consultancy Africa Intelligence’s Asia Dimension Unit ( asia.dimension@consultancyafrica.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).
(2) ‘What was agreed and left unfinished in U.N. climate deal’, Reuters, 20 December 2009, http://in.reuters.com.
(3) Vidal, J., ‘Rich and poor countries blame each other for failure of Copenhagen deal’, guardian.co.uk, 19 December 2009, http://www.guardian.co.uk.
(4) Tujan, T., ‘The North’s destructive model’, D+C Development and Cooperation, February 2010, http://www.inwent.org.
(5) Olivier, J.G.J. and J.A.H.W. Peters, ‘No growth in total global CO₂ emissions in 2009’, Netherlands Environmental Assessment Agency, June 2010, http://www.rivm.nl.
(6) Knickerbocker, B., ‘China now world’s biggest greenhouse gas emitter’, The Christian Science Monitor, 28 June 2007, http://www.csmonitor.com.
(7) ‘Chinese CO2 emissions in perspective’, Netherlands Environmental Assessment Agency’, 22 June 2007, http://www.pbl.nl.
(8) Murray, J., ‘China to unveil multibillion-dollar renewable energy plan’, BusinessGreen, 5 March 2010, http://www.businessgreen.com.
(9) Young, T., ‘China to impose carbon tax from 2012’, BusinessGreen, 12 May 2012, http://www.businessgreen.com.
(10) Nusca, A., ‘Seven renewable energy targets for 2020’, Smartplanet, 1 July 2010, http://www.smartplanet.com.
(11) Elliott, J.A., 2006. An Introduction to Sustainable Development. Routledge, London.
(12) Proffer, D., ‘Africa: Tackling deforestation is critical’, AfricaNews, 18 December 2007, http://www.africanews.com.
(13) Human Development Report. UNDP, 2008, Oxford University Press, Oxford.
(14) Willis, K., 2006. Theories and Practices of Development. Routledge, London.
(15) Mthembu-Salter, G., ‘Soaring costs and shrinking pockets’, The Africa Report December 2009- January 2010.
(16) Njobeni, S. And G. Ware, ‘The race between green power and fast growth’, The Africa Report, December 2009- January 2010.
(17) Ibid.
(18) Ibid.
(19) ‘World Development Report 2010: Development and Climate Change’, The World Bank, 2010, http://siteresources.worldbank.org.
(20) Zenawi, M., ‘Introductory remarks by H.E. Prime Minister Meles Zenawi at the Fourth African Economic Conference’, Economic Commission for Africa, 11 November 2009, http://www.uneca.org.
(21) ‘How China is Powering Africa’s Growth’, American Foreign Policy, 24 September 2009, http://afpprinceton.com.
(22) Van Valen, M., ‘Asian Construction: Bridges and ports made in China’, The Africa Report, December 2009 - January 2010.
(23) Wines, M., ‘China pledges $10 billion to Africa’, The New York Times, 8 November 2009, http://www.nytimes.com.
(24) Eriksson, J., ‘China’s Urge for Renewable Energy’, Renewable Power News, 29 June 2010, http://www.renewablepowernews.com.
 

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Written by: Fiona Dwinger (1)
Source: Consultancy Africa Intelligence