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Political economy of the just transitions in Africa

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Political economy of the just transitions in Africa

22nd January 2021

By: Saliem Fakir

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The term ‘just transition’ may seem a neologism, but in reality it is not so new. It originated from the depths of US labour movement struggles in response to the impacts of new environmental laws on the chemicals and other industries in the 1980s. Capital was complying with new environmental laws but, in so doing, it was shedding jobs.

The ‘just transition’ language has gripped climate activists and funders. A key point should not be lost on us: it is bringing to the fore the importance of the economy, jobs and social safety nets as the push towards decarbonisation gathers momentum globally.

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Climate activists in developed countries, well-meaning as they may be, often lack the lived experience or exposure to inequality in unequal societies, as a result of which they pursue a singular focus on emissions reduction and get blindsided by unintended consequences.

Such blind obsession can impose a double burden – the historical legacy from industrial development, which is unequally shared, remains unresolvedand the accidental effects of decarbonisation programmes can entrench structural inequality as a result of new rules in trade and finance, as well as standards that naturally evolve in a carbon-constrained world with potential disruptive consequences for countries that are ill-prepared for these new barriers.

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A case in point is Europe’s Green Deal, which could have negative consequences for the European Union’s trading and political partners if the bloc is not sensitive to the interests of its partners. The Greens may be celebrating in Europe, yet they are leaving Africans worried about what is to come.

The push towards deeper decarbonisation – through setting net-zero targets, for example – can come across as imposing obligations that do not take into account the intricacies and complexities of energy transitions in developing and emerging economies.

The politics of energy transitions can often be underappreciated, as recent energy transition histories in South Africa, Mexico, Brazil and other emerging economies have shown. In some parts of the world, such as South Africa, it can be one step forward and three steps backward.

There may be moral imperatives for global action, but local elites often do not bend so easily to global norms because those who hold power over the energy system can resist change. Elites have a way of delaying transformational change.

There is a certain elite playbook that should not be ignored. It includes the right to pollute (because developed economies got a free ride before), used basically as diplomatic arm-twisting to try to extract compensation – “We will stop if you pay us to do so.”

The second aspect of the playbook concerns the underdevelopment of these economies, often the consequence of treating many African economies as zones of extraction by the very proponents of net-zero targets and green deals. It seems nothing will change if the existing extractive model continues as the clean energy revolution reaches scale. This model also produces little industrial development in countries that sit with the key minerals needed by these new industries.

Underdevelopment is a product of poor governance, which is often aided and abetted by developed economies, which, by turning a blind eye to the poor governance, lend a hand to local elites in the extraction game as they help a small circle of friends and family to hide their ill-gotten proceeds in tax havens.

Further, structural poverty, the consequence of elite capture, is rather disingenuously used by these resource capturers to argue why business must stay as usual. Poverty, which is a result of their own doing, is used as a card to argue why development that is in line with the traditional model must come first before a sustainable transition. This bluff must be called: it is all about buying time to continue to extract as much as possible and spend as little as possible to meet the needs of the populace.

If one takes a global political economy view of finance flows to extractive economies and back again, one gets the sense that this is not a one-sided story but a multiheaded hydra with so many actors complicit in its activities.

For example, most African countries that have oil and gas cannot extract these endowments using their own financial resources. They are aided and abetted by governments and corporations from the very countries pushing the decarbonisation button, giving more oxygen to fossil dependence and resource curse problems. The side-effects of this incestuous relationship are corruption, a lack of regard for proper governance, a weak tax base and a populace seen as a nuisance rather than a resource.

If one takes this picture onto the landscape of the just transition debate, one realises that one cannot solve energy transitions without having the bigger picture in mind. In many cases, the only economy is the energy economy. Angola, for instance, saddled with years of the resource curse problem, has only one treasury – Sonangol – the national oil and gas company. If oil and gas collapsed, Angola would have nothing else to fall back on.

Without a broader economic strategy in these countries, ‘get out of fossil fuels' may be a net-zero victory for those celebrating less oil and gas extraction but a zero-sum game for the rest of the populace held to ransom through elite machinations and in those countries where vast energy abundance sits side by side with incomprehensible energy poverty.

To resolve the just transition issue in highly fossil-fuel-dependent economies, a pure climate strategy is insufficient. A broader discussion on economic diversification and emancipation of people from the clutches of elite capture has to be an important building block.

If not, net zero elsewhere becomes a strategic and technological advance for those who can make the race to zero and economic collapse for those being left behind as they are trapped in the vicious vortex of path dependence and immovable elites whose only expertise is to keep the extractives game going. Their cynical view of the world, as it is, is a different net-zero calculus: a race to the bottom, no matter what.

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