The State of Play - September 16, 2023

In this edition: Africa's Climate Summit, Flooding in Libya, Vietnam's EV company, California's new legislation and my favorite chart of the week.

---

Africa’s Climate Summit

The first week of September saw Kenya host the first Africa Climate Summit. It was a time for the African nations to come together and form a consensus plan of attack in the lead up to COP 28 in Dubai at the end of November.

One of the overarching issues facing many of the countries is excessive debt, and the increasingly expensive servicing costs required in this inflationary environment. According to the World Bank, almost half of Sub-Saharan Africa is “near” or “at high risk” of debt distress. As Kenyan president William Ruto noted “If you don’t solve the debt issue, you can’t solve the climate issue…a new instrument is needed for these countries - finding ways to pre-empt default before it happens.” Ruto stated that the countries don’t want a “debt write-off. No, we want to pay.”

Proposed solutions include extending the period of debt repayment and introducing decade-long grace periods, where the money could be invested in climate adaptation. In general more investment should be funneled this way, especially when you consider that Africa represents ~4% of annual emissions but suffers some of the worst impacts (case in point: Kenya has recently experienced horrible droughts, responsible for killing 2.5m livestock over the past year - despite 92% of Kenya’s power coming from renewable sources, principally geothermal).

Ruto said he wanted to raise Africa’s share of the annual $3.5tn global investment needed to achieve the Paris climate accord’s goals of 45 per cent emissions reduction by 2030 and net zero by 2050. “At the moment, only 1 per cent of renewable financing resources comes to Africa, so our push is to get it to 10 per cent by 2028 and to 40 per cent by 2050,” he said.

Africa’s 2020s climate finance needs

Source: Climate Policy Initiative

At the end of the conference, the nations signed the Nairobi Declaration which proposes a global carbon tax that would help finance renewable energy and invest in climate adaptation in the Global South.

7 September 2023 - African leaders back global carbon tax to pay for green energy in poorer nations (Attracta Mooney and Andres Schipani, FT):

The declaration said a carbon price was key to ensuring “affordable and accessible finance for climate positive investments at scale” and called for the “ringfencing of these resources and decision-making from geopolitical and national interests”. The IMF has previously said a global carbon price would be among the fastest and most effective ways to cut carbon dioxide emissions across the world, although the idea of a global carbon tax has struggled to gain traction among some countries….African leaders called for an investment of $600bn to meet a renewable energy target of 300GW by 2030, up from the current 56GW. A total of $26bn in funding and investments was announced for various climate-focused initiatives.

I am in the camp of supporting carbon taxes, so this feels like a good place to start negotiations. Whether or not the Global North, and specifically the US government, is willing to embrace this is another story.

---

Disaster in Libya

And as if these African nations needed more reason to demand investment and recompense, the recent devastation in Libya should serve as a stark reminder of what comes when neglect mixes with disaster.

When torrential storms hit the Libyan town of Derna earlier this week, massive flooding occurred when two dams, built in the 1970s, collapsed without warning. This fed incalculable amounts of water into the city, destroying everything in its path. The flooding and effects have been compared to Hurricane Katrina in 2005 when the levees in New Orleans broke and the city was trampled by water.