German Institute for Global and Area Studies | Leibniz-Institut für Globale und Regionale Studien

German Institute for Global and Area Studies | Leibniz-Institut für Globale und Regionale Studien

DEEN

De-Carbonizing Economic Development in Sub-Saharan Africa

  • Energy demand in countries of Sub-Saharan Africa is projected to increase drastically in the next decades. Against the backdrop of the Paris Agreement, a key question for developing countries is how to forego carbon-intensive development steps and thereby achieve sustainable development. To answer this question, this project will trace the most recent carbonization dynamics and analyze feasible climate change mitigation actions that can help to lower emissons without compromising economic development.
    BMBF, 2018-2022

    Team

    Hannes Greve

    Former GIGA Team member

    Jörg Peters

    Jan Steckel

    Cooperation Partners

    Research Questions

    In recent years global emission increases have mainly been driven by developing countries’ economic growth, predominantly in Asia. Countries of Sub-Sahara Africa (SSA) could drive the next wave of carbonization, with energy demand being projected to increase sharply in the coming decades. The Paris Agreement emphasizes the intertwined relationship between climate impacts as well as emission reductions and sustainable development. A key question for developing countries is therefore how to forego carbon-intensive development steps.

    The project aims to investigate carbonization dynamics and climate policy options in SSA. More specifically, feasible short term entry points for SSA countries will be analyzed to embark on low-carbon development paths and prevent lock-ins in long-lived infrastructure. The project will also deal with the political feasibility and the interrelationship of climate measures with other objectives, such as poverty reduction and employment. The team aims to improve the understanding of the political and institutional drivers and barriers that shape Africa’s energy transition, conducting comparative case studies.

    The focus of the GIGA research team will be on effects of (future) climate policy on households and firms.

    Contribution to International Research

    Results derived in DeCaDe can inform different stakeholders how to identify and address current challenges: First, African governments can learn how to improve their NDCs in the upcoming UNFCCC periodic review process; in particular, they will help to understand which policy instruments can be implemented, how this can be politically backed and how they can be made effective. Multilateral development banks, such as the World Bank or African Development Bank, and bilateral donors (e.g. BMZ) can use our results to identify key areas of future action. In addition, our results can also inform a broad range of policy makers how different – and potentially conflicting – goals in the agenda 2030 can be managed. Academically, we will partially step on empirically uncovered ground.

    Research Design and Methods

    The evaluation of distributional effects by energy price changes on households will rely partly on ex-ante micro-simulations to determine how different income groups are likely to be affected by climate measures. In particular, the results will provide information on whether a climate policy can be expected to be progressive or regressive, i.e. whether it will put a proportionally higher cost burden on richer or poorer households. The distributional impacts can also be analyzed along other socio-economic characteristics, such as household size, location, education etc. Ex-post evaluations of fossil fuel subsidy reforms will shed light on behavioral recations of households in response to energy price increases.

    The analysis of impacts of energy prices on firms will cover new empirical ground for Africa. We will examine the effects of energy prices on production, profits, and - if data allow - on the use of other factors, in particular labour.

    Preliminary Findings

    Preliminary results from a quasi-experimental setting on fossil fuel subsidy removal in Ghana indicates that households switch back from modern fuels (mainly LPG) to tradtional and transition fuels: Firewood and charcoal. The use of firewood and charcoal for cooking is associated with forest degradation and severe health issues through indoor air pollution, which predominantly affects women and children. These results provide a strong argument for complementary policies to accompany fossil fuel price increases in poor contexts. Such policies can include (1) compensation payments, for example cash transfers, (2) support for alternative fuels or improving energy effciency, and (3) policies to curb harmful second-round effects, for example through more effective forest protection policies. Further, our result show that the impacts of fuel price reforms are highly context-specific: Local supply and demand conditions cause great heterogeneity in the effects of price reforms even within Ghana. Therefore, complementary policies would need to be designed to take into account this heterogeneity. This probably generalizes to other developing countries where markets are fragmented and (fossil-fuel-based) transport costs high.

    Project Publications

    Journal of the Association of Environmental and Resource Economists | 01/2023

    "Stepping Down the Ladder": The Impacts of Fossil Fuel Subsidy Removal in a Developing Country

    This paper provides quasi-experimental evidence from Ghana on the impact of fossil fuel subsidy removal on cooking fuel choices.

    Hannes Greve

    Former GIGA Team member

    Prof. Dr. Jann Lay

    Lead Research Fellow / Head of Research Programme "Globalisation and Development"

    GIGA Focus Global | 1/2022

    Now and Never: Banning Hydrocarbon Extraction in Antarctica Forever

    Massive untapped mineral resources in Antarctica continue to be a central concern for diplomacy. As host of the next Antarctic meeting in May 2022, Germany now has the chance to revitalise high-level diplomacy and global cooperation on climate action with a forever ban on hydrocarbon extraction.

    Dr. Patrick Flamm

    Former Associate

    Prof. Dr. Alan D. Hemmings

    Gateway Antarctica Centre for Antarctic Studies and Research, University of Canterbury

    Related Content

    Award | Verein für Socialpolitik | 06/2023

    Promotion Prize for Practice-Oriented Development Research 2023 (2nd place)

    For his dissertation Climate Change Mitigation and Economic Development, former GIGA doctoral researcher Dr. Hannes Greve received the 2023 Promotion Prize for Practice-Oriented Development Research (2nd). The price is awarded by Verein für Socialpolitik, in collaboration with KfW Development Bank.

    Stepping Down the Ladder: Carbon Pricing and Cooking Fuel Choice in Developing Countries – Evidence from Ghana

    Conference | 09/03/2020 - 10/03/2020

    Stepping Down the Ladder: Carbon Pricing and Cooking Fuel Choice in Developing Countries – Evidence from Ghana

    Leibniz Environment & Development Symposium 2020, Berlin Organisers: Leibniz Institute of Vegetable and Ornamental Crops, Leibniz Institute for Agricultural Engineering and Bioeconomy, German Institute for Global and Area Studies (GIGA), Leibniz Centre for Agricultural Landscape Research, Leibniz Centre for Tropical Marine Research Hannes Greve (Speaker)

    Hannes Greve

    Former GIGA Team member

    Stepping Down the Ladder: The Unintended Impacts of Fossil Fuel Subsidy Removal in a Developing Country

    Conference | 23/06/2020 - 03/07/2020

    Stepping Down the Ladder: The Unintended Impacts of Fossil Fuel Subsidy Removal in a Developing Country

    25th Annual Conference of the European Association of Environmental and Resource Economists , Online event Organisers: Technische Universität Berlin, Humboldt-Universität zu Berlin Hannes Greve (Speaker)

    Hannes Greve

    Former GIGA Team member

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