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The climate talks (COP27) in Sharm El-Sheikh, Egypt this November come at a time when momentum on the African Continental Free Trade Area (AfCFTA) is picking up with the recent launch of the听guided trade initiative听鈥� an initial pilot of eight African countries trading under the treaty鈥檚 preferential terms.听

The AfCFTA seeks to create a single market of 1.3 billion people, with an estimated GDP of $2.6 trillion. According to the听, it could lift 30 million people from extreme poverty.听

At the same time, in a recent interview with听Africa Renewal,听Akinwumi Adesina, the President of the African Development Bank, maintains that since COP27 is Africa鈥檚 COP, it must address Africa鈥檚 climate challenges.听

From an AfCFTA perspective, what might an African-led response to climate change look like?听

Africa accounts for only听a tiny share听of greenhouse gases (GHG) emissions 鈥撎齛t below 4%听- yet, as acknowledged by the 2022听Intergovernmental Panel on Climate Change听(IPCC) Report, the African continental will be most negatively affected by climate change. That reality is already painfully evident in East Africa where, following four consecutive seasons of below-average rainfall, the Horn is facing a听catastrophic drought, the worst in 40 years.听

Free-trade agreements like the AfCFTA are not usually associated with climate-friendly policies, as many people correctly perceive trade as a major contributor to carbon emissions.听According to the World Trade Organisation, GHGs released by the production and transport of traded goods and services represent on average听20-30% of global GHG emissions. The international transport sector alone generates 12% of emissions.听

With the dramatic growth of global trade since the 1950s, demand across the world for increased choice and variety of goods and services knows few limits.听For instance, air transport for low-value perishable goods has become economically viable.听

Nowadays, throughout the year, supermarkets in high-income countries stock fresh fruit, vegetables and flowers from around the world, opening windows of opportunity for suppliers in countries with a warmer climate or those in the southern hemisphere.

Some East African countries have taken advantage of such opportunities. For instance, Kenya's annual export of horticultural products to Europe stands at over a billion US dollars, accounting for one-sixth of its total exports.听

Yet the COVID-19 crisis exposed the vulnerability of these supply chains. We must also ask whether such production and consumption patterns are ultimately sustainable. Cash crops for export have always been听. While turning over good quality arable land for production of tea, coffee, vegetables, tropical fruits, or flowers has an economic rationale for cash-strapped developing countries, concerns have been raised (not always听, it must be said) that it undermines food security.听

What is clear is that currently in Africa many basic needs 鈥� food, housing, and access to energy听听- are unmet, and the听听of climate change, the COVID-19 pandemic and the Ukraine conflict have made a bad situation worse.听

The听Food and Agriculture Organization of the United Nations听(FAO) estimates that in 2021, 278 million (or more than one in five) Africans were malnourished 鈥� a massive 22 per cent increase compared with 2019. Given the current prevalence of food price inflation, high prices of agricultural inputs, and extreme climate events, the expectation is that things are likely to get worse before they start getting better. 听

More intra-regional trade in food crops and industrial goods

A more vibrant regional market in food items under the AfCFTA will go a long way to addressing some of these challenges. Topographic and climatic differences across the continent mean that there is听. For example, when Kenya suffered a severe drought in 2016-17, imports from neighbouring Uganda cushioned the effects.听

Aby the UN Economic Commission for Africa (UNECA) argues that more intra-regional trade like this could significantly help improve food security across Eastern Africa. It is a contention underpinned at the continental level by the听听jointly developed by the African Union Commission (AUC) and the FAO.听

To achieve sustainable development, Africa also needs to quicken the pace of industrialisation and reduce its reliance on manufactured imports.听听repeatedly show that the manufacturing sector will be the main beneficiary of the AfCFTA.听

Yet industrialisation has historically been associated with rising energy needs.听So the continent should better leverage new technologies to leap-frog towards a less energy-intensive economic growth. Six years ago, a听UNECA听听report advocated for the "green industrialisation" of the continent. Those arguments still stand.

The power of regional energy markets

Stronger regional energy markets could also prove strategic in reducing emissions. Africa is rich in renewable energy sources such as geothermal, wind-power and hydro-electric. Kenya, for instance, is one of the听听in renewable energies, deriving most of its energy from geothermal sources.听

Similarly, with an abundance of hydropower and solar, Ethiopia has the potential to generate upwards of 60,000 MW from renewable sources. Approximately 90% of Ethiopia鈥檚 power generation is derived from hydro-electric sources, with the remaining 10% generated from wind and thermal.

A greater reliance on intra- and inter-regional power pools such as the Zambia-Tanzania-Kenya (ZTK) interconnector for the Eastern Africa and Southern Africa Power Pools could reduce even further the dependence on traditional fossil fuels. Africa has the potential to lead the world in this sphere.听

Reducing risks

Another major benefit of the AfCFTA is that the agreement provides for reciprocal binding market access, making it less risky than trade under听preferential market access schemes听to distant high-income markets.听

There have been multiple instances of restrictions being imposed on African exports under these schemes. In 2018, for instance, Rwanda was听听to the US market because of a policy restricting the import of American second-hand clothing.

Former Secretary-General of the UN Conference on Trade and Development听听once remarked that Kenya exports more than $350 million of new clothing to the US market each year only to see the clothes sent back to Kenya as used clothes, thus undermining the region鈥檚 textile industry and adding to carbon emissions. Wouldn鈥檛 it make more sense, he asked rhetorically, for regional textile manufactures to make more new clothes for their own citizens to wear?听

In a similar vein, nearly 80 per cent of vehicles in Eastern Africa are old second-hand vehicles imported from Europe and Asia that do not meet modern emissions standards. Automobile manufacturers like Volkswagen have been quite explicit about wanting to听听which comply to high emission standards, but are reluctant to do so until the continental market is fully operational. 听

Technological changes 鈥� the much trumpeted 鈥楩ourth Industrial Revolution鈥� 鈥� are now facilitating听听in manufacturing, making a localized approach to production much more viable. In the face of significant disruptions to global trade in recent years,听听and producing more for the regional market is advisable. Crucially, greater intra-regional trade will be less damaging to the global environment than long-distance value-chains.

Embracing a New Approach Under the AfCFTA

One of the first听听by Bengoa et. al (2021) on the environmental consequences of the AfCFTA concedes that the agreement could lead to a marginal 0.3% increase in CO²听emissions, but at the same time it will also improve听air quality. This is significant given that in the last two decades of rapid economic growth, air quality in many African cities has plummeted.

Given that Africa already has among the lowest per capita emissions in the world, the continent needs to achieve greater leeway in the COP27 negotiations. The continent鈥檚 long-term developmental aspirations should be accommodated, including the implementation of the AfCFTA, alongside the provision of the necessary financing to help mitigate the negative impacts of climate change.听

Yet one recent analysis carried out by the听Climate Policy Initiative听calculated that climate financing for the continent stands at only around $30 billion per year 鈥� just a tenth of the $277 billion per year needed to mitigate climate change, and far below the $100 billion of additional finance promised by high income countries under the Paris Agreement of 2009 to help low-income countries implement their climate plans.听

In sum, the AfCFTA is not a plea for regional autarky; rather, it is an appeal for priming regional trade and encouraging businesses to cater more to local tastes and demands.听In the long run, it will also make the continental economy more competitive and better able to compete on global markets.听

Above all, if accompanied by the necessary climate financing, greater investments in renewable energy, increased energy efficiency and measures to improve food security, it will be kinder to the planet too.

Dr. Mold is Chief of the Regional Integration and AfCFTA Cluster in the Office for Eastern Africa, Economic Commission for Africa. He is also and is author (with Francis Mangeni) of a forthcoming book 鈥淏orderless Africa 鈥� A Sceptic鈥檚 Guide to the Continental Free Trade Area鈥�, published by听Hurst.听