Africa: carbon pricing, a threat to economies

The industry will face many obstacles in its decarbonization efforts. Fears focus on the effects that this dynamic could have on African countries, exacerbating inequalities, poverty and unemployment.

Carbon pricing for the production of greenhouse gas-intensive goods could exacerbate inequality, poverty and unemployment in Africa and other developing countries, Cape Town warned on Thursday (1,470 km from Pretoria), participants in an international conference.

“The industry will face many obstacles in its decarbonization efforts, particularly in Africa and developing countries. It is essential to take the necessary measures for the transition, without harming the competitiveness of industries,” declared speakers at this conference initiated under the theme “Compliance: the carbon border adjustment mechanism and environmental standards , social and governance”.

Industrialists, on this occasion, expressed their concerns about the fact that apart from multilateral processes, such as the United Nations Framework Convention on Climate Change, discussions and agreements on the design of an environmental policy Carbon adjustment based on market principles to reduce greenhouse gas emissions will have a direct impact on African countries, exacerbating inequality, poverty and unemployment.

“We must take all measures to protect ourselves,” they note.

They argue that African countries recognize the need for climate action centered on a just transition, that is, a transition to a net-zero carbon society that takes into account the needs of workers and communities. Corporate sustainability reporting requirements emphasize responsible business conduct that includes taking steps to reduce pollution and carbon dioxide (CO2) emissions, as well as waste. Stakeholders highlight that Carbon Border Adjustment Mechanisms (CBAMs) are mechanisms that aim to increase consistency in the application of carbon pricing between goods produced in different jurisdictions.

“Most often, this is a jurisdiction that applies a carbon price to the production of emissions-intensive goods and seeks to apply an equivalent carbon price to imports of those goods from foreign jurisdictions Concretely, this could mean that African exports of carbon-intensive goods would face additional carbon cost liability in some jurisdictions, some speakers warned.

Industrialists, on this occasion, mentioned green hydrogen as an option for the production of green steel.

“Sectorising the scrap market as a raw material for the steel sector to reduce the carbon footprint would be another option,” they argued.

He added that renovating existing technologies and investing in new energy-saving technologies are other options to consider. The conference brought together senior government representatives, business leaders, policy makers, as well as sustainable development experts. Speakers explored the intersection between the European Union’s greenhouse gas reporting requirements and how this is likely to affect the metals and engineering sector, which is a high-intensity sector export.

Sami Nemli With Agency / ECO Inspirations