The impact of climate action on energy security in West Africa: Evidence from Burkina Faso, Ghana and Nigeria

• Published date: 01 December 2022
• Author: Gideon Ofosu‐Peasah,Eric Ofosu Antwi,William Blyth,Khadija Sarquah
• Date: 01 December 2022
• DOI: http://doi.org/10.1111/opec.12268

OPEC Energy Rev. 2022;46:449–481.

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449wileyonlinelibrary.com/journal/opec

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INTRODUCTION

The idea of climate actions traces its roots from the United Nations (UN) Scientific Conference held in 1972 and has been

sustained till the Kyoto protocol in 1990. The concern for climate action was re- emphasised in Millennium Development

Goals (MDGs) in 2000 and prioritised during the Paris Agreement in 2015 (Loewe,2015; UN,n.d.; UNEP,1972). Key

among the MDGs was seeking global collaboration for development through technical and liquidity support through

Official Development Assistance (ODA), promoting environmental sustainability and improving education.

DOI: 10.1111/opec.12268

ORIGINAL ARTICLE

Energy Transition

The impact of climate action on energy security in West

Africa: Evidence from Burkina Faso, Ghana and Nigeria

GideonOfosu- Peasah1

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Eric OfosuAntwi2

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WilliamBlyth3

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KhadijaSarquah1

© 2022 Organization of the Petroleum Exporting Countries.

Abbreviations: ARDL, autoregressive distributed lag; CO2, carbon emissions; ECT, error correction term; ETS, emissions trading schemes; FIT,

feed- in tariff; GDP, gross domestic product; GHG, greenhouse gas emissions; INDCs, intended nationally determined contributions; LNCO2, natural

logarithm of carbon dioxide emissions; LNES, natural logarithm of energy security index; LNEMI, natural logarithm of emission intensity; LNHC,

natural logarithm of education expenditure; LNODA, natural logarithm of emission intensity official development assistance; NDCs, nationally

determined contributions; ODA, official development assistance; SPSS, statistical package for the social sciences; VECM, vector error correction

model.

1Department of Energy and Petroleum

Engineering, University of Energy and

Natural Resources, Sunyani, Ghana

2Regional Center for Energy and

Environmental Sustainability,

University of Energy and Natural

Resources, Sunyani, Ghana

3Oxford Energy Associates, Oxford, UK

Correspondence

Gideon Ofosu- Peasah, Department of

Energy and Petroleum Engineering,

University of Energy and Natural

Resources, Sunyani, Ghana.

Email: gideon.ofosu-peasah.stu@uenr.

edu.gh

Abstract

The study investigates the impact of climate action on energy security in West

Africa using an autoregressive distributed lag and an error correction model.

Empirical results for Burkina Faso showed that total carbon emissions and cli-

mate finance improved energy security performance in the country in the short

and long run, while capacity building and energy efficiency impaired energy se-

curity performance in the short run. In the long run, capacity- building efforts are

estimated to improve energy security performance in Burkina Faso. For Ghana,

results showed that total carbon emissions improved energy security performance

in Ghana while energy efficiency impaired energy security performance in the

short run. Results for climate finance and capacity building are found to be insig-

nificant, and no long- run results are found for Ghana. Lastly, results for Nigeria

showed that total carbon emissions improved energy security performance in the

long run. The short- run result for total carbon emissions and climate finance is

found to be insignificant, while capacity building and energy efficiency impaired

energy security performance in the long and short run. Considering the need to

reduce carbon emissions during full implementation of Nationally Determined

Contributions, policies should aim at decoupling carbon emissions from energy

security by exploring options for low- carbon energy development.

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OFOSU- PEASAH et al.

Climate finance is a critical component of promoting environmental sustainability. Most external climate finance

support to low- income countries has been transferred as ODAs, to guarantee a stable support pool for climate adaptation

and mitigation actions in low- income countries (Stewart et al.,2015). In this light, several studies establish a direct link

between ODA allocation and increase in renewable energy investment, energy- efficient transfer of technology, climate

mitigation and reduction in greenhouse gas emissions (Briggs,1993; Kalirajan et al.,2012; Lee et al.,2020).

For countries in West Africa, achieving climate actions as contained in Nationally Determined Contributions (NDCs)

requires external climate finance support, technology transfer and capacity building. An analysis of 11 out of 16 NDCs of

West African countries reveals that the energy sector leads in mitigation strategies (Antwi-Agyei et al.,2018). Leveraging

technology, renewable energy, energy efficiency, recycling materials and fuel switching are key to reducing anthropogenic

greenhouse gas emission (GHG), particularly from the energy sector and may require fossil asset stranding (IISD,2018).

Despite the aforementioned emission mitigation strategies, the literature shows that sub- Saharan Africa's power gener-

ation mix is dominated by fossil fuels (73.3%) and hydropower (23%) while transport solely depends (100%) on fossils

(Jingura & Kamusoko,2017). Regarding wood fuel consumption, empirical evidence shows the reliance on biomass is

predicted to increase in the next 30 years (Sander et al.,2011), but Article 5 of the Paris Agreement enjoins parties to

reduce emissions from deforestation and forest degradation while promoting sustainable forest (UNFCCC,2015). The

enforcement of this provision will adversely impact rural dwellers in West Africa who rely on biomass in meeting their

energy security needs.

The implementation of climate change mitigation strategies as contained in the countries' NDCs will mean reducing

supply and dependence on fossil fuel and biomass and disincentivising hydrocarbon resource and asset investments. But,

on the contrary, this will also trigger innovations in the energy sector, increase penetration of renewables and renewable

energy finance, stimulate good governance and regulatory issues within the energy sector and require steps to utilise

hydrocarbon resources and assets sustainably.

From the above premise, despite the good intention, implementing climate actions may adversely impact energy se-

curity if there is a lack of support for such an anticipated energy transition, which is yet relatively unknown. This work

aims to assess the possible impacts of implementing climate actions on energy security in West Africa. We consider the

results could contribute to assist the decision- making of NDC implementation in West Africa post the Paris Agreement.

Study outcomes are expected to be helpful for governments, energy planners and analysts who can assess the relation-

ships, determinants, synergies and trade- offs between energy security and climate efforts. Moreover, understanding the

climate action- energy security nexus is vital as it is the key to driving sustainable economic growth, sustainable energy

production and consumption, consumer welfare and stabilising national security (Jewell,2013; United Nations,2015).

The rest of the paper is organised as follows: literature review, methodology, results, discussion and conclusion.

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LITERATURE REVIEW

A scoping background literature related to energy and climate change was reviewed to establish the problem regarding

the impact of energy production and consumption on the climate. Next, related studies are cursorily reviewed. This is

followed by a critical review of studies directly related to the research question ‘What are the impacts of implementing

climate actions on energy security in developed and developing countries?’

‘Energy security AND climate change, energy security AND nationally determined contributions AND developing

countries, energy security AND nationally determined contributions AND developed countries’ are the search strings

used in google and google scholar for the search. The search was done from 29 May 2021 to 1 June 2021 and the literature

constrained to the last 10 years. An initial review of the title and abstract was made, and when the abstract was not rele-

vant to the research question, the literature was discarded.

The nexus between climate action and energy security cannot be delinked. The energy sector contributes approxi-

mately two- thirds of all anthropogenic GHG emissions. Likewise, climate change threatens energy security in the sense

that it leads to extreme weather events, water scarcity and damaged ecosystems that may affect energy production and sys-

tem operations (Nyman,2018; UNFCCC et al.,2018). Studies found that improving energy security and climate security

simultaneously are conflicting in some high- income countries like the United States and Australia (Ladislaw et al.,2009;

Nettleton,2016; Toke & Vezirgiannidou,2013). In countries like China, improving energy security and climate security

is reconcilable (Wu et al.,2012; Tran et al.2016).

According to Toke and Vezirgiannidou(2013) and Nettleton(2016), countries develop their energy security plans

around locally endowed natural energy resources like oil, coal and nuclear energy, hence will not ignore locally endowed

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THE IMPACT OF CLIMATE ACTION ON ENERGY SECURITY

natural energy resources and import low- carbon energy in the name of climate action. The authors are of the view that

at best climate actions and energy security should be pursued but with priority for energy security because of the energy-

intensive nature of their economies. On the contrary, Wu et al.(2012) postulate that energy security improves when cli-

mate protection measures such as energy- saving and emission reduction actions are implemented. Estimates by Bollen

et al.(2010) indicate that when an integrated energy security- climate policy is not pursued, global oil demand is reduced

by 24% by 2150. The study recommends an integrated energy security- climate policy to maximise the synergies between

them.

Additionally, studies on climate action/NDC implementation have focused on energy use and related investments

under NDC conditions. Study results from Tran et al.(2016) reveal that although NDC implementation is key to reach-

ing emission reduction targets, deploying renewable energy forms such as solar PVs and biomass in power generation

will lead to a marginal reduction in welfare and GDP. Similarly, Paroussos et al.(2020) and Wu et al.(2017) estimate an

increased investment in the energy sector due to retrofits in energy systems in an attempt to improve thermal integrity

and energy efficiency. GDP losses are predicted by 2030 due to high energy production costs in the quest to shift entirely

to clean energy. Vishwanathan and Garg(2020) research on energy system transformation and NDCs find that phasing

out coal plants, shifting towards cleaner energies, decarbonisation and installing supercritical technologies are vital mea-

sures countries must deal with to meet NDCs. An investment of about US$6– 8trillion is needed in India between 2015

and 2030 to implement these measures.

A more comprehensive description of the effect of climate action on the energy sector is conducted among 38 devel-

oping member countries of the Asian Development Bank (ADB). The study finds that the bank's support for NDC imple-

mentation will plummet dependence on fossil fuels in general but coal in particular. The bank's investment support will

see to the penetration of renewables, natural gas and nuclear energy. Despite this finding, coal is estimated to dominate

the energy mix while nuclear energy is expected to witness the highest growth in the region by 2030. It is estimated that

an amount of $321billion is required between 2016 and 2030 for each of the 38 member countries for power sector invest-

ments. The study notes that NDC implementation will reduce carbon emission significantly and GDP energy intensity by

an average of about 29% and 22%, respectively (Zhai et al.,2018).

Similarly, positive effects of implementing INDCs are reported by Paroussos et al.(2020). The study notes that in-

creased energy independence, reduction in emissions and reduction in energy import bills are some positive effects of

implementing INDCs. The authors indicate that the implementation of EU's INDCs will have a marginal adverse effect

of 0.4% on EU's GDP by 2030 and 1% in 2050 due to the impact of a carbon pricing scheme, higher investment in retool-

ing the countries energy systems and implementing the revenue recycling mechanism. Conversely, carbon mitigation

scenarios are estimated to have a marginal positive effect on GDP. This is based on model assumptions that include a coal

and natural gas- dominated energy mix with a reduction in oil by 2030. Carbon emission reductions are expected from

the following interventions: increasing electricity access and increasing natural gas in the power and transport sector

(Siagian et al.,2017).

According to Wu et al.(2017), emissions trading schemes (ETS) and renewable energy policies are two important

approaches to achieving NDC targets. However, the implementation of ETS will decrease China's emission cap by 0.3%.

Implementing ETS and feed- in tariff (FIT) causes adverse effect on GDP welfare loss in Chinese regions and a decline

in electricity supply although a decrease in CO2 emissions is recorded by the implementation of ETS and renewable en-

ergy policies. In a related study conducted in three fossil fuel- rich middle- income countries, the nexus between energy

security and sustainable growth is feeble and may involve opportunity costs because the tensity between the idea of asset

stranding of fossil fuels and the use of these assets in the domestic economy is strong. The concerns about energy security

to meet national demand take prominence in these countries than the call for climate action (Kuneman et al.,2017; Van

Schaik et al.,2016).

In West Africa, energy access, climate change adaptation and mitigation are identified as the three most crucial in-

terrelated challenges to the energy system (ECREEE,2013). West African countries depend largely on fossil fuels either

through imports and (or) local exploitation of endowed fossil fuel resources. Without expansible low- carbon substitutes

for fossil fuels, climate actions will remain in limbo and could destabilise energy system (Ladislaw et al.,2009). The

solutions to the problem are not always straightforward. To deal with the nexus problem, the Paris Agreement birthed

NDCs and requires that high- income countries provide finance, technology transfer and capacity- building support for

low- income countries to ensure that voluntary climate actions are achieved (UNFCCC,2015).

Overall, quantitative and qualitative methods have been used in investigating the energy- climate nexus in the

aforementioned studies. But the use of quantitative approaches has been dominant. The quantitative approaches

used in these studies include the Computable General Equilibrium model, GEM- E3, PRIMES model, Index, MERGE