John Kerry is right. Mother Nature does not care where carbon emissions come from. The statement by the US Special Presidential Envoy for Climate, however, offers a pretty dismal guide to how to combat climate change.
What he meant, at the African Ministerial Conference on Environment in Dakar, Senegal in September, was that cutting out fossil fuels in Africa was just as valuable than cutting them at home.
In fact, there is an excellent case to leave Africa alone.
As the development economist Stefan Dercon from the Centre for the Study of African Economies at the University of Oxford once put it, aid for the poorest countries “should only selectively pay attention to climate change, and remain focused on fighting current poverty reduction.”
Senegal, where GDP adds up to $1,600 per person – one 47th of that in the US – could get richer much faster if it were allowed to exploit fossil fuels. A high-growth path proposed by the International Energy Agency would multiply its economy sixfold by 2040, in large part by quadrupling the use of fossil fuels.
For sure, the additional carbon emissions would warm the atmosphere like any other. But the climate can afford to give Senegal a break. In 2040, with a projected population of 27 million, it would emit 30 million tons, about what Connecticut emits today with a population of 3.6 million.
The case is similar in all poor countries. An analysis by Arthur Baker and Ian Mitchell at the Center for Global Development points out that the 52 poorest countries, home to almost a fifth of the world population, accounted for only 1.6% of global emissions in 2014.
If their economic growth were to accelerate to reach an average income per person of $6,000 by 2030, global emissions over the decade would decline by 29% even if the carbon intensity of the poorest worsened substantially, as long as the rest of the world stayed on a path to net zero at midcentury.
The weather can take it. Ken Caldeira and Lei Duan at the Carnegie Institution for Science, and Juan Moreno-Cruz from the University of Waterloo concluded that if countries wait until their GDP per person hits $10,000 before they start working to decarbonize their economy, the increase in the average global temperature would only be 14% more than if they had started decarbonizing in 2020.
There is, of course, a reasonable case to invest in mitigation where mitigation is cheapest. If it costs less to cut emissions of CO2 by a ton in Ghana than it costs in Switzerland, the Swiss may have a solid argument to steer their carbon reduction budget to pay for efficient lighting and cleaner stoves in Ghana rather than to reconfigure transportation in Lausanne.
But the seemingly straightforward argument gets complicated pretty quickly. If the Swiss plan is to earn carbon reduction points by repurposing their international aid budget, they would be trading away what matters most for developing countries – development – to suit their own low-carbon preference.
This is not a theoretical concern. Under pressure from the US and other rich shareholders, the World Bank stopped funding coal or upstream oil and gas projects. It will fund downstream projects, like pipelines, only under exceptional circumstances. But poor countries looking for a way out of charcoal and dung could do with more gas.
This is not exclusively an ethical conundrum. Economic development opens up avenues for decarbonization. It’s harder to electrify an economy when, as in Sub Saharan Africa, one-third of the population has no access to electricity.
Vijaya Ramachandran at the Breakthrough Institute and Arthur Baker at the Development Innovation Center at the University of Chicago argue that poorer nations will have to raise their per-capita consumption of energy from their current level of 100-300 kilowatt-hours to some 5,000-10,000 kilowatt hours per year, to achieve the living standards of the rich.
At the moment, renewables alone won’t cut it. “It’s been really really challenging for some countries to build out renewables, Ramachandran said. “Mitigating away from natural gas is the problem.”
Many of the poorest countries of the world need gas to combat climate change – to replace wood and charcoal for cooking and coal in power plants – and to grow. The IEA’s high-growth path for Africa sees electricity production tripling by 2040. Gas-powered generation under the scenario grows by 150%. Fortunately Africa is sitting on 600 trillion cubic feet of the stuff.
The Swiss are not wrong. If they want to deploy a bunch of francs on top of their foreign aid budgets to help poor countries develop clean energy resources, more power to them. As Kerry might say a ton is a ton is a ton. It stands to reason to invest in decarbonization where decarbonization is cheapest.
But they better make sure that the value proposition holds.
Consider the Green Climate Fund’s investment to install solar-powered mini-grids in 1,000 villages in Senegal, powering 39,000 households. In terms of its climate impact, wrote Matt Juden and Ian Mitchell of the Center for Global Development, “it is highly cost-ineffective,” reducing CO2 emissions at a cost that works out to some $200 for each avoided ton.
This is way higher than the $75 per ton that the IMF chief Kristalina Georgieva proposed last year as a price on carbon, to accelerate decarbonization. It is about four times the US government’s estimate of the social cost of carbon, meant to price the damage that an additional ton of carbon in the air will impose on the world.
Juden and Mitchell point out that the Fund could have gotten a lot more carbon out of the atmosphere had it spent the money elsewhere. And while electrifying remote villages is no bad thing, it could also been done more cheaply.
Kerry is right to say that trimming a ton out of Senegal’s CO2 emissions is just as good for the global climate as cutting them in Connecticut. But the climate, and Senegal’s economic development, might have been better served had the electrification of its remote villages used a little more diesel.