Discussions
The Trade-Climate Change Nexus in Southern and Eastern Africa
Sean Woolfrey, tralac Researcher, comments on tralac’s participation at the Durban Climate Change Conference
Earlier this week tralac participated at the Durban Trade and Climate Change Symposium, an event jointly organised by the International Centre for Trade and Sustainable Development (ICTSD), the World Trade Organisation (WTO) and South Africa’s Department of Trade and Industry (DTI) to coincide with the 17th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) being held in Durban, South Africa.
The trade-climate change nexus is just one aspect of the discourse surrounding the impact of current and impending climate change across the globe, but it covers a set of issues that are of vital importance to the countries of southern and eastern Africa. In particular, the impact that climate change is likely to have on these countries’ ability to trade goods and services will have important implications for their development prospects.
Climate change models predict that in the absence of timely and effective global mitigation efforts, sub-Saharan Africa is likely to exhibit significant increases in average temperatures over the coming decades. Indeed, evidence suggests that the continent is warming faster than the global average and will continue to do so. On rainfall, however, climate model predictions are less conclusive, suggesting high current levels of variability in rainfall in the region are likely to persist and that certain parts of the region are likely to become wetter, while others become drier. These models also predict an increase in the intensity and frequency of extreme weather events such as droughts and floods in the region.
The southern and eastern Africa region is particularly vulnerable to climate change due to its reliance on agriculture – especially rain-fed agriculture – and its weak capacity for adapting to the effects of climate change. The region is characterised by widespread poverty, poor infrastructure, low levels of awareness as to the likely consequences of climate change and a lack of economic diversification and industrial capacity, all of which hinders the region’s ability to adapt to the higher temperatures and increased frequency of droughts and floods likely to result from climate change. In the absence of a concerted effort to improve the region’s capacity for adaptation, climate change is likely to bring a number of negative consequences for the region including lower crop yields, an increased geographical spread of diseases such as malaria, cholera and dengue, the destruction of fragile ecosystems, increased water and food scarcity, physical damage from increased storm activity and the displacement of communities.
Climate change is also likely to have a negative impact on the ability of countries in the region to trade goods and services with each other and with the rest of the world. This is particularly noteworthy, as the prevalence of relatively small domestic markets in southern and eastern Africa means that international trade is an important and necessary means for facilitating increased productivity and economic growth and development in the region.
In particular, the region’s ability to trade goods and services is likely to be negatively affected by climate change through two separate but interrelated channels. First, climate change will have direct and indirect impacts on productive capacity. It is likely, for instance, that agricultural production – which continues to be a major source of the region’s exports – will suffer an aggregate decline due to loss of marginal agricultural land, lower crop yields, increased water scarcity and shorter growing seasons (although some parts of the region may in fact experience increased agricultural production). In addition, climate change’s negative impacts on human health, infrastructure, biodiversity and access to potable water are also likely to affect the region’s productivity, thereby decreasing its ability to produce goods and services for export.
The second channel through which the region’s exports are likely to be negatively affected by climate change is the adoption by its trading partners of climate change response measures which could potentially act as barriers to trade. Border carbon adjustments (BCAs) are one such category of measures. BCAs would include such measures as border taxes on the embodied carbon of imported goods, set at the level of equivalent domestic taxes. Economies such as the United States and the European Union are likely to face significant domestic pressure to enact BCAs if they adopt domestic legislation that makes carbon intensive production more costly for their domestic firms. Other potential climate change response measures, such as the imposition of carbon labelling or similar standards or regulations, would disadvantage small-scale producers and exporters in southern and eastern Africa, many of whom would not have the necessary resources to be able to comply with such standards and regulations.
Given that the current global political and economic climate does not appear conducive for an imminent multilateral agreement on climate change mitigation, there is a pressing need for measures to be taken at a national and regional level to improve southern and eastern Africa’s capacity for adapting to climate change. While mitigation efforts may also be relevant for certain countries and carbon intensive industries in the region, the relatively small contribution of greenhouse gas emissions originating in southern and eastern Africa, and the region’s lack of adaptive capacity, mean that adaptation initiatives should be prioritised.
There are a number adaptation possibilities open to countries in the region, including encouraging changes in crops and agricultural techniques, providing information on climate risks, improving irrigation and water management processes, strengthening infrastructure and improving domestic health systems. In practice, however, many of the public goods required for adaptation are regional in nature, such as climate information, agricultural research and transport infrastructure. This means that regional initiatives and institutions such as the Tripartite COMESA-EAC-SADC Free Trade Agreement can and should play a vital role in coordinating and facilitating regional adaptation to climate change.
Indeed, there are a number of areas where a regional approach would be best suited to tackling the challenges that climate change is likely to bring. These include: cooperation on migration and the relocation of people and communities from areas badly affected by climate change; the removal of non-tariff barriers on the trade of staple foods, which would go some way toward alleviating extreme food scarcity in times of poor harvests; better management of shared water sources; the development of regional renewable energy infrastructure; promoting industrial development to reduce reliance on agriculture; boosting intra-regional trade so as to lessen the region’s vulnerability to the enactment of BCAs and other measures by traditional trading partners; the provision of funding for adaptation and mitigation efforts; disaster management schemes; R&D cooperation; and many others.
The main challenges to the adoption of regional (and national) initiatives in these areas lie in the sourcing of the finance and technology required to ensure that such efforts have their intended effects. Multilateral initiatives to address financing for climate change adaptation and mitigation efforts, such as the Clean Development Mechanism (CDM), have not had much success in encouraging such projects in sub-Saharan Africa. This is largely due to design flaws in these initiatives as well as the lack of capacity in the region for attracting and absorbing the finance (and technology) required for them to be successfully implemented. There is therefore need for such finance and technology transfer schemes to be redesigned so as to be more effective in sub-Saharan Africa, and for countries in the region to improve their capacity for tapping into such schemes and for enacting their own initiatives.
Climate change undoubtedly raises many challenges for the countries of southern and eastern Africa, but it also throws up some opportunities for the region. The global push for climate change mitigation is opening up many new industries, especially in the production of environmental goods and services, some of which could be produced in the region. Increased focus on – and funding for – renewable energy generation could also see renewable energy becoming a viable solution to the region’s lack of energy capacity. Furthermore, just as regionalism can serve to facilitate climate change responses in the region, so cooperation on climate change adaptation may spill over into other issue areas, thereby further strengthening regional integration in southern and eastern Africa. Clearly it remains to be seen, however, whether the region will successfully rise to the challenges posed by climate change, and whether it will be able to seize those opportunities that an increased focus on climate change brings.
Sources:
Collier, P., Conway, G. & Venables, T. “Climate Change and Africa,” in Oxford Review of Economic Policy, Vol. 24, No. 2, 2008, pp. 337-353.
CSIR. 2011. Climate Risk and Vulnerability: A Handbook for Southern Africa. Available online at: http://www.rvatlas.org/sadc/download/sadc_handbook.pdf
Draper, P. & Mbirimi, I. (eds.). 2010. Climate Change & Trade: The Challenges for Southern Africa. Fanele, Pretoria.
Click on the links below to access previous tralac discussions on this topic:
Aid for trade and the green economy in Africa
Unresolved issues in the design of the Green Climate Fund
An update on climate change negotiations under the BASIC group and the African position for COP 17