Can net zero be achieved without dragging billions into poverty?

Climate risk management is identifying, assessing, monitoring, managing, and reporting on climate and environmental risks by banks. PHOTO | POOL

Reaching net zero by 2050 is not an easy task as many try to put it without significant risk to the global economy in general and developing countries specifically.

The world does not seem to have an alternative to replace dependence on carbon as quickly as possible. It won't be as easy as replacing conventional electricity with solar energy. Kenya and other African countries have bet their future on industrialisation.

Our infrastructure aspirations are heavily dependent on cement and iron, and agriculture requires fertiliser to feed the ever-increasing number of people. We heavily depend on fossil fuels to transport all these products, while the transport sector depends on fossil fuels for 95 percent of its energy source.

The International Renewable Energy Agency estimates replacing fossil fuels with renewables requires $5.7 trillion per annum until 2030. In Kenya, according to the Ministry of Energy, more than $165 billion is required for the energy transition.

Climate challenges and economic development cannot be seen separately. Reducing economic growth in developing countries could mean a life-and-death situation. The desperate need to industrialise over the next decade will increase emissions, hence global warming reduction will ironically depend in part on developing countries. As much as all countries must work together to reach net zero, these countries should not be denied the opportunity to lift millions of people out of poverty through industrialisation.

What can be done to help developing countries avoid economic crisis? First, the significant level of financing that is key for energy transitions should be available to developing countries with low interest rates. This means, as per a report by Deloitte titled Financing the Green Energy Transition, de-risking green projects to lower the financing costs and to remove barriers restricting the flow of private capital toward green projects.

Second, creating trust between countries that historically benefited from fossil fuels and countries that aspire to develop in the coming years is very critical.

Third, we need to work towards creating a transparent and integrated carbon market to help boost energy transitions which could also help developing countries to sell carbon.

Finally, it requires a change in our mindset when it comes to decisions regarding transportation, consumption, and so on, which will impact our individual decisions in every aspect of our lives. However, as Michael E. Mann and other experts showed, individual action alone will not be enough and may deflect the responsibility away from the ones we need to hold accountable.

The writer is an Economic Advisory Leader at Deloitte Africa. [email protected]

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