Report: Oil, Coal Developments to Worsen Africa’s Climate Crisis

A continuous failure by African countries to tame oil, gas and coal developments and limit global warming is feared to worsen climate crisis and also present a systemic threat to the whole global financial system, the February Intergovernmental Panel on Climate Change has revealed.

Released on February 28, the Report confirms that the climate crisis disproportionately affects African countries, demonstrating that climate impacts will worsen sooner than previously predicted and that worldwide action is more urgent than previously assessed, “and yet Africa is host to a growing number of oil, gas and coal projects,”

“Although climate change litigation around the world is forcing companies to reduce their emissions output, the risk of reputational damage has been heightened in recent years by the lack of transparency, corruption, illicit financial flows and serious environmental and human rights violations that characterize this sector in Africa,” the report reads in part.

According to the report, majority of European, Asian and North American financial institutions are putting the continent in danger of becoming locked into fossil fuels, “despite its massive potential for renewable energy. As a result, Africa runs the risk of not being able to make the necessary leap to sustainable energy in time.”

Between 2016 and June 2021 for example, $132Bn in lending and underwriting was injected into 964 gas, oil and coal projects in West, East, Central and Southern Africa, according to the report.

“The vast majority of this finance came from financial institutions based outside Africa, both commercial banks and public institutions such as development banks and Export Credit Agencies,” the report highlights.

Of the top 15 financial institutions, 10 are commercial banks and five are public finance institutions.

“The largest fossil fuel financiers are; JPMorgan Chase, Standard Chartered, and Barclays but the largest single financier of fossil fuel projects and companies in Africa in this period is the China Development Bank,” the report says

0922 MD Banktrack fossil fuels Africa figure 13 (1)

Those based in North America, Europe and Australia, according to the report provided $73Bn in financial support, 55% of the total. Asia-based financial institutions, mostly from China and Japan, provided $42 billion of the total amount, which equals 32%. In contrast, Africa-based financial institutions provided just $15 billion, or 11% of the finance.

The study was conducted by BankTrack, Milieudefensie, Oil Change International and 19 African partners, including; the Environment Governance Institute in Uganda, 350Africa, Alliance for Empowering Rural Communities (AERC) from Ghana, and WEP Nigeria among others.

The report further stated that oil, gas and coal sectors are increasingly

Risks for the financial sector becoming a risk because of the energy transition accelerating and the production costs of renewable energy rapidly dropping compared to fossils, these projects are increasingly at risk of ending up as stranded assets.

“The National and international legislation Such a major turnaround requires strict legislation from governments worldwide on mandatory human rights and environmental due diligence to make sure the mistakes of the fossil fuel era will not be repeated, giving African countries the prospect of a green, resilient and sustainable future,” it reads

Speaking at the virtual release of the report, Henrieke Butijn, a Climate campaigner, researcher at BankTrack and lead author of the report said that commercial banks can make all the Net-Zero pledges they want but these pledges will not automatically lead to the much-needed short-term steps in ending fossil fuel financing and much less to a true Just Transition.

“Banks need to start thinking beyond fossil fuel divestment and renewable energy as the new business-as-usual opportunity and focus on what truly benefits African countries and communities now and in the long-term,” he said

Isabelle Geuskens, a Senior Program Officer Just Transition at Milieudefensie another co- author of the report said that Africa is the continent with the most renewable energy potential but it has not been able to tap into it and build towards the more resilient and sustainable future it urgently needs.

“Meanwhile our financial institutions and industries continue fuelling the fossil fuel development myth and pour billions of dollars into new fossil fuel projects, locking the continent into fossil fuel dependency and a stranded future.

A Just Transition for Africa means stopping fossil fuel finance and contributing to a renewable energy future that benefits African people first and foremost,”

Bronwen Tucker, Public Finance Campaign Co-Manager at Oil Change International said, “The resources and profits from fossil fuel projects in Africa have overwhelmingly flowed out of the continent rather than providing energy access or public goods.

Anabela Lemos, Director JA! Justiça Ambiental/FoE Mozambique said, “Mozambique and its people are in the tragic situation of being devastated by both the causes and effects of the climate change crisis,” he said adding,

“One of the major causes of the climate crisis is the extractive industry, and right now the gas rush in Mozambique is causing land grabs, destroyed livelihoods, human rights abuses, militarization and conflict,”

Meanwhile, the African Development Bank, is navigating between green and dirty energy financing options.

 

The post Report: Oil, Coal Developments to Worsen Africa’s Climate Crisis first appeared on ChimpReports.

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