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Supreme Court Ruling on EPA: What it means to Africa
Though Africa lies faraway, events in the U.S. have ramifications for her people. Read on to find out how in a relation to the West Virginia versus Environmental Protection Agency (EPA) case.
Dennis Kelleher, the Chief Executive of the Wall Street's Watchdog, Better Markets, called it a dagger. He said it could be a potential dagger for legal challenges, a dagger for such groups as the U.S Chamber of Commerce. It could be a dagger for another major question of legal doctrine, something which might require an explicit congressional authorisation in the long run, something which might have implications for Africa.
Senator Patrick Toomey, the top Republican on the U.S. Senate Banking Committee, singled it out during an interview by Bloomberg TV. He singled it out as a means to take actions without the authority of the U.S. Congress, a means for the president to be too ambitious about climate change. He singled it out as a move requiring some attention, a means for elected leaders to assert themselves in the ongoing climate change debate, a means to support many who consider it onerous and costly.
In effect, when the U.S. Security and Exchange Commission’s (SEC) proposed mandatory financial disclosure regarding climate change risks comes into effect, many fossil fuel interests, politicians, and other stakeholders will want to shut it down, because they consider it onerous and costly. They may argue that it needs an explicit congressional authorization. They may say since it’s an issue of broad importance and societal impact, it cannot come into effect without the authority of the Congress, without the U.S. Supreme Court giving a verdict. They may get ready for a lawsuit challenging the legitimacy of financial disclosures by the fossil fuel sector about climate change risks in their transactions, they may file lawsuits as soon as the regulation comes on board, they may want to test whether the regulation will withstand judicial scrutiny, and they will have reasons to be hopeful.
The landmark ruling by the Supreme Court in the West Virginia V. Environmental Protection Agency (EPA) lawsuit represents a major setback for President Joe Biden. It represents a major setback in the fight to slow down climate change, a setback in the new thinking aimed at shifting power generation from fossil fuel to renewable energy sources. It represents a setback to Biden’s agenda of halving U.S. carbon emissions by 2030, a setback to the country’s ability to be taken serious by major pollutants such as China, a setback to cutting back massive U.S. investments in fossil fuel development in places like Africa, but it makes conservatives hopeful for victory.
With the Supreme Court’s ruling, EPA’s power to regulate greenhouse gas emissions witnesses a drawback. Consequently, the SEC proposal may face the same fate, because its opponents will argue that a proposed mandatory financial disclosure by companies represents an issue of broad importance and societal impact. The opponents will say since it represents an issue of broad importance it cannot come into effect without the authority of the congress, that it cannot come into effect without the Supreme Court giving a verdict, that it cannot come into effect without a lawsuit.
Unfortunately, the present Supreme Court refuses to defer to the federal laws on the issue of lawsuits. In recent times, it chips away at the practice of deferment. It now embraces the ‘major questions’ doctrine. It now subscribes to the idea that big issues involving broad regulatory actions should limit federal agencies. It now shows a willingness to target issues it doesn’t like. It shows no qualms at siding with conservative states and fossil fuel companies, and when the SEC’s proposed regulation comes before it, it might show no qualms in ruling against the power of the commission to ask for financial disclosures regarding climate change risks to shareholders of fossil fuel companies.
Pollution in China, Credit, Financial Times
In event this happens, a far-reaching regulation to tackle climate change gets pushed aside. If this happens, it could further undermine efforts to tackle climate change, undermine U.S. credibility before such major polluters as China. If this happens, fossil fuel companies will seize the opportunity of the Supreme Court’s backing not to disclose the financial risks related to climate change to shareholders, not to halt the money they pour into developments in Asia, not to stop the amount they want to invest into Africa’s fossil fuel development in the very near future.
According to a recent research published in March, European financial institutions intend to invest billions of dollars in the African fossil fuel sector. Not to be out shone, some Asian financial institutions plan the same thing, commit billions of dollars in a growing number of fossil fuel projects into Africa. And, of course, the United States intends to follow their direction, locking billions of dollars into the African fossil fuel sector.
Climate change effects in Africa, Credit, SciDevNet.
With the West Virginia lawsuit, and the coming one against SEC, America’s financial institutions may succeed with these objectives and end up locking in the billions of dollars in Africa, buoyed on by Supreme Court judgments. In other words, Africa remains the continent with most people living in energy deficit. Through these investments, fossil fuel projects continue to impact negatively on local communities, never bringing any real development. Through continued U.S. investments in fossil fuel development in Africa, massive unemployment continues on the continent, along with rising poverty, locking Africans into a vicious circle of want for decades to come.
According to another report, $132 billion went into the underwriting of 964 fossil fuel projects in West, East, Central, and Southern Africa in the past few years. The United States, the United Kingdom, and France spearheaded the investments from 2016 to 2021, with institutions such as J.P. Morgan Chase, Standard Chartered Bank, and Barclays Bank belonging to the top ten financial institutions involved. The U.S. and its European and North American allies contributed about $73 billion dollars into the effort, with Japanese and Chinese financial institutions pitching in $42 billion, while African financial enterprises brought in just $15 billion.
Effects of Climate change in Africa, Credit, CGTN
If the Biden administration fails to implement financial disclosures about climate change risks, banks in the U.S. will continue to contribute billions of dollars to the development of fossil fuel in Africa, undeterred by climate change concerns. In that case, African countries will be the ones experiencing climate change impacts, driven by emissions for the world’s biggest polluters. The continent remains trapped in the fossil fuel development trap, despite its massive potentials for renewable energy. Africa falls into the orbit of not leaping into sustainable energy in time, suffers the worst effects of climate change, mortgaging her future.
Obviously, the financial sector in the U.S. may pay too for not allowing Africa leap into the development of sustainable energy, if it exploits a possible Supreme Court ruling by making huge investments in Africa. The investments may become stranded assets with the transition to renewable energy. Fossil fuel investments accelerate global warming, which could present a systemic threat to the U.S. financial system. The fossil fuel investments to Africa come at a risk of reputation damage to the U.S., since illicit financial flows, human rights abuses, and corruption characterize the entire process.
For Africa to escape the pain from the entire process of fossil fuel development, banks like J.P. Morgan Chase should start to think beyond the oil and gas resource. Banks like the Standard Chartered Bank should start scheming about how to pour billions of dollars into the renewable energy sector, an idea that benefits Africa and the United States. Institutions like Barclays Bank should not be focused on fossil fuel projects, which caused the gas rush in Mozambique, the environmental crisis in the coastal areas of Nigeria, and the oil troubles in Angola.
In addition, the U.S. president should not allow the setbacks in the fight from climate change to unsettle him. The SEC rules could be pushed through with a lot of lobbying, in order to extend the president’s climate change agenda to the farthest possible limit, to prevent opponents of climate change from scuttling it. Friendly states in the U.S. could be persuaded on the climate change agenda as related to pursuing significant regulations and measures, so the president can achieve his climate change objectives. Civil society groups in Africa should not see the West Virginia ruling as meaning continued travails on the continent, but as an impetus for more campaigns against the fossil fuel sector.
The March finding said that the fossil fuel sector plans to sink $230 billion into Africa in the coming decade. The sector intends to put in $1.4 trillion into the sector in Africa by 2050, unconcerned about limiting global warming to 1.5 degrees Celsius. The sector intends to create pains in Africa, but this should inspire the civil society on the African continent to mount more campaigns against fossil fuel development. For both Africa and the United States, the West Virginia V. EPA ruling represents a major setback, but as the climate crisis worsens going forwards, both parties should not allow themselves to be crippled by opponents of the idea of climate change.