How U.S. Inflation Reduction Bill Might Impact Climate Change in Africa

The Inflation Reduction Bill provides for a deep consequence in the United States. See how Africa might be affected.

Temane gas plant in Mozambique, Credit, NS Energy

So far, United States’ agencies hesitate to cut off finance for a fossil fuel project to Nigeria. They hesitate in stopping the financing of one heavy fossil fuel-based power plant in Mozambique, despite the fact that the U.S. government intends to get out of the business of backing high-carbon energy infrastructure in the developing world. They hesitate to halt fossil fuel projects in Ghana and elsewhere, even though they plan to help drive investments in a new direction, even though they give indications of heading in a new territory, even though they intend to end international finance for African fossil fuel projects.

Right now, U.S. agencies concentrate on studying the situation. They retain their participation in existing projects. They refrain from announcing any specific changes to policy, so Power Africa, their response to the electricity deficit on the continent, continues, with the U.S. administration saying the initiative is “technology agnostic”. They watch the situation in the Africa power sector, where utilities show signs of illness, where fossil fuel powers the electricity grid, where power shortages prove endemic, where costs halt energy storage infrastructure from achieving any kind of profit.

Credit, Naijaonpoint.com.ng

With the U.S. Inflation reduction Act of 2022, costs about energy storage infrastructure in Africa may matter. Due to the bill sponsored by Senators Chuck Shumer and Joe Manchin, things might change in the future. Since Joe Manchin’s opposition to the bill now ebbs, the U.S. can now take a critical look at its fossil fuel projects in Africa, and make changes to them, as President  Joe Biden have been saying with his assumption to office, as John Kerry, Biden’s special envoy for climate, have said.

The New thinking

Biden wants to tackle climate change. He wants to help drive investments towards climate solutions, one of the objectives of the Manchin/Schumer bill. He wants to leave a positive climate change footprint, a positive environment footprint, a new development finance footprint. He wants to prove that democracies can deliver in this era of profound climate change crisis, wants to share his positive position for the future, wants the world to see the benefits of partnering with democracies in the battle to tackle climate change.

For the United States, this means concentrating on wind and solar projects. When Kerry held a meeting with African Development Bank’s president Dr. Akinwunmi Adesina last year, America’s  intension was clear – the desire to provide a strong support for Africa’s battle with climate change. When Biden spoke at the G.7 meeting last year, the message was clear – the U.S. will support investments for clean energy. When U.S. Secretary of State, Anthony Blinken, spoke on March 9 to the U.S. Development Finance Corporation, he  spoke about climate change, how it’s important to address the crisis, how the U.S would help to drive investments towards climate solutions, how ending international finance of fossil fuel projects with public money will come to a halt.

In sum, the U.S. might end financing fossil fuel projects, due to a desire to leave an environment footprint in the sands of time. Though China launches fossil fuel megaprojects in Africa, the U.S. might not imitate the Asian country, which accounts for the Schumer/Manchin bill, which accounts for the bill extending the solar investment tax credit for 10 years at 30% of the cost of installed equipment. However, if the U.S. incursion into the renewable energy sector fails after its ending the financing of fossil-fuel projects, what will be the consequences for Africa, especially as a few renewable energy projects such as the Kenyan wind farm one faces issues?

A Chinese-backed project in Africa, Credit, South China Morning Post

The Saviors – China and Russia

Africa could turn elsewhere. It could turn to polluting alternatives, and many African nations would not care whether the alternatives are carbon free or not. Africa could turn to Russia, which eyes the continent for oil and gas drilling and LNG import/export opportunities. It could turn to china, which supports a vast megaproject in Uganda, along with French firm Total Energies, investing $10 billion into an exercise to drill for fuel in one of the world’s most bio-diverse regions, despite criticism from environmental activists about the implications of the exercise for climate change.

With a wrong move after America pulls out of investments in fossil fuel projects, the battle to fight the energy poverty in Africa becomes complicated. The continent’s electricity grid shows deep-rooted problems. They drown in debt and dysfunction, unable to provide a bright energy future for the continent. They provide unreliable services, bring obstacles to power generation, promote emissions of greenhouse gases, some of them on the verge of a collapse.

If the U.S. makes a wrong move after a pullout of financing fossil fuel projects in Africa, the continent could turn to China or Russia, to rescue its electricity grid from the verge of a collapse. While carrying out their objective, polluting alternatives to renewable energy may get utilized, endangering the lives of millions of Africans, devastating vulnerable ecosystems, and pushing the continent towards further chaos in this climate change era. Since we live in a connected world, the climate change crisis in Africa won’t remain in Africa, and it won’t be long before its effects reach other continents, making nonsense of the 2015 Paris climate agreements. For example, with a climate change crisis in Africa, the U.S. can’t exploit the continent’s vast renewable energy resources. It can’t exploit valuable minerals such as cobalt and the others. It can’t exploit its influence in the contnent.

The Promises

To prevent a disaster, the U.S. should show its commitments to promises to Africa. It promises to double climate finance contributions in Africa to $11.4 a year by 2024. It promises to close the annual $27 billion finance gap for Africa, as a means to tackle climate change on the continent. It promises to provide $100 billion annually to developing countries in order tackle the impact of climate change, along with partners in the developed world, as well as promises to mobilize $200 billion of investments in global infrastructural projects in the next five years, as part of an effort by the world’s leading democracies to counter China’s Belt and Road programme.

Lake Turkana Wind Power Project, Credit, Africa development Bank

It could carry out other activities. Rather than focus on investments on core renewable energy concerns, it could spend on the support facilities to enable wind and solar energy access. It could spend on the development of energy storage. It could concentrate on Africa’s electricity grids, to prevent the experience of the Kenyan Lake Turkana project, where Africa’s largest wind farm ended up carrying more than one billion dollars in debt, because experts neglected the grid aspect of it. The U.S. could make investments in utilities that are able to cover their cost, because a clean grid isn’t necessarily a financially healthy one.

While the U.S. pulls out of investments in the fossil fuel sector, it should always remember that a clean grid doesn’t imply a financially healthy one. It should remember the Lake Turkana episode, and be cautious of chasing a fossil fuel-free power sector at a large scale. It should remember to invest in the transmission of clean energy, grid management systems, and technical or financial support for utilities. It should remember its promises at closing the $27 billion finance gap to Africa, the promises made with its partners, the promises towards global infrastructural projects. If it remembers its promises, the climate change crisis in Africa could be managed, even after the U.S. cuts off the financing of fossil fuel projects in the near or long term.

Inspiring Stories of renewable energy deployment in Africa

An African solar field, Credit, Credible Carbon

Study shows the success of deploying renewable energy in Africa through the strengthening of support facilities. Read More.

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Study showing the importance of developing solar mini-grids as one step closer to universal energy access. Read More.

Study showing the potential renewable energy on the African continent as a means to battle climate change. Read More.

What to eat

A vegan dish from Uganda, Credit, Daisy & Thyme