Can Egypt Drive Global Climate Action at COP27
Some criticised the world’s last major climate conference, COP26 in Glasgow, for being largely talk and no action, while others pointed to the pact and promises it gave rise to. Either way, as the world moves on, one thing is difficult to deny: the annual UN climate conference sparked a global conversation.
This year, it is Africa’s turn to host the event. After Covid-19 disruptions delayed COP26 by a year, COP27 will be held on schedule in Egypt in November 2022. It will take place in Sharm El-Sheikh, a resort town between the Sinai Peninsula and the Red Sea.
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COP27 will be the opportunity to build on commitments made during last year’s conference. The Glasgow Climate Pact amended the Paris Agreement’s requirement for countries to review their national climate plans every five years. Instead, countries will now check how they measure up against the goal to limit global temperature rise to 1.5°C annually. With the Intergovernmental Panel on Climate Change warning that the effects of climate change are “widespread, rapid and intensifying”, this new clause sets a precedent for all future COPs.
A primary focal point for COP27 will be climate finance. Egypt’s Environment Minister Yasmine Fouad recently told Sky News the event would prioritise vulnerable nations “not only in Africa, [but also] those developing countries that did not produce emissions but are paying the price of climate change”.
The hope is that giving a lower-middle income country a platform as host will put pressure on the EU and US, who blocked any real action on climate change-induced loss and damage when the G77 and China proposed a funding facility for it in Glasgow.
Gas and oil boom
Hopes and optimism aside, the question remains whether Egypt has the credibility, capacity and motivation to carry the torch for those countries where, as Gabon’s COP26 plenary representative put it, “climate change is already a matter of life or death”.
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By GlobalDataEgypt falls into the category of regions that are suffering forecasted consequences today. According to the World Bank’s Climate Change Knowledge Portal, the country has endured water stress, an approximate 22% decrease in precipitation, an average 1°C increase in temperature, and more frequent and severe droughts and flash flooding in the past 30 years alone. As well as the obvious diminution in quality of life, these effects are projected to have a high impact on Egypt’s tourism industry, which is one of its largest sources of income.
Yet along with President Abdel-Fattah Al-Sisi’s rise to power in 2014, came discoveries of massive oil and gas reserves – like the Zohr gas field, the largest-ever natural gas find in the Mediterranean, discovered by Eni in 2015 – that have brought a lucrative source of income to light. According to the media analytics provider AI-Monitor, there have been 197 discoveries of crude oil reserves and 98 in natural gas in the last seven years; 62 of them in 2020 alone.
Egypt has come a long way in its production of energy. Less than a decade ago, its people faced severe power cuts and an energy crisis. The supply deficit bottomed out around 2014, during a time of political turmoil for the nation. At that time, its energy industry was only running at 70% capacity, adding its share to already high unemployment. Consumption outstripped production, and the government incurred billions of dollars in debt to multinational oil companies by diverting oil and gas intended for export to the domestic market.
Conflict of interest
Nowadays, Egypt is self-sufficient in natural gas and has paid off its foreign oil debt. The country has climbed to a higher financial league than those “vulnerable” nations it hopes to represent in November. It has come closer to other fossil fuel-rich nations whose affluence is driven by investments from rich countries and their companies. In all the excitement of this new-found wealth, Egypt’s pursuit of renewables and climate action appears to have floundered.
“There is a real risk at COP27 of natural gas being promoted as a 'transition fuel’ more than ever,” says Karim Elgendy, an Associate Fellow at UK think tank Chatham House. “[The] Egyptian pro-gas position and its lack of interest in decarbonisation could undermine the gains made at COP26 and lead to fossil fuel investments that lock-in emissions for decades to come.”
Two-thirds of total foreign investment into Egypt is absorbed by the oil and gas industry. In addition, China is participating in various mega-infrastructure projects in the country, and Russia is supporting the El-Dabaa nuclear power plant that will begin construction later this year. There are concerns that Africa’s ability to put pressure on big emitters at COP27 will be handicapped, due to those being some of the same nations Egypt is fostering close relationships with.
Environment Minister Fouad has responded to these concerns by insisting that all countries will be involved in discussions on how they can deliver on the Paris Agreement, “whether they are the big emitters or the least emitters”.
National climate plan
Egypt has enormous potential for renewable energy generation, and particularly in wind and solar, from its vast open plains and high solar irradiation. But the nation seems to be in two minds about the energy transition. In 2019, Egypt's energy mix was almost entirely fossil-fuel based, and it was one of the 11 fastest-growing greenhouse gas emitters.
The Glasgow Climate Pact stresses the “urgency of enhancing ambition and action in relation to mitigation, adaptation and finance”. Egypt has declared ambitious climate goals, but with its continued growth in the gas and oil sector, it is struggling to realise these. Its national climate strategy, called the Integrated Sustainable Energy Strategy, aims for 20% of its electricity generation to come from renewables by 2022, and 42% by 2035.
This strategy was put forward in 2017 for activation in 2020, as part of Egypt's Nationally Determined Contribution (NDC) to the Paris Agreement. However, this was described by the Alexandria Higher Institute of Engineering & Technology in Egypt as “too general and [not providing] quantified targets nor plans for emission reductions”. Implementation of the NDC is also conditional on the country receiving international funding of $73bn (E£1.15trn).
To aid the government in fulfilling its climate goals, the European Bank for Reconstruction and Development has helped finance the construction of the Benban solar park, the fourth-largest solar park in the world with an annual production of about 3.8TWh. Yet the Egyptian government says funding remains an issue for its energy transition.
“Egypt has moved in the direction of a climate change strategy and implementing this strategy,” said Finance Minister Mohamed Maait in an interview with our sister publication Investment Monitor. “[But] when we went to the international markets saying, look, this is the project, we would like to finance it and these are the green bonds, the market did not reply to us. It was pricing at the same price as traditional bonds.
“Borrowing money from international markets at a high cost will not allow us to move with you in the implementation of climate action,” Maait added.
Egypt issued the first sovereign green bonds in Africa and the Middle East in September 2020, worth $750m.
Some warn against rewarding an authoritarian regime, however, and caution that its government cannot be trusted when it comes to financing. Khaled Diab, an Egyptian climate activist and communications director at Brussels-based NGO Carbon Market Watch, says: “Without stringent conditions and due diligence, a significant portion of funding reaching Egypt is at risk of ending up greasing the wheels of corruption.”
He adds: “Foreign investments often end up not only bankrolling the regime but also providing it with the resources to repress the population. This is particularly the case when it comes to fossil fuels, as it promotes a rentier economy which [allows] the regime to build up and reinforce its patronage network.”
Egypt made global headlines in 2019 when whistleblower Mohamed Ali, an ex-government contractor, accused President Al-Sisi of building “lavish palaces [with public funding] while his people suffered.”
Human rights
All this begs the question as to whether Egypt risks enlarging the “massive credibility, action and commitment gap that casts a long and dark shadow of doubt over the net-zero goals” as think tank Climate Action Tracker put it in its COP26 report.
There is also the matter of human rights. The current government is notorious for quashing freedom of speech and incarcerating political prisoners, 65,000 of which are said to be currently detained. The regime is known to use violent retribution against those who criticise it, as was the case with the 2013 Rabaa massacre that saw nearly 1,000 peaceful protestors killed by police and army forces.
Souleimene Benghazi, regional campaigner for the Middle East and North Africa at Amnesty International, told Energy Monitor: “Protests are a crucial part of the COP events. They allow civil society activists from around the globe to call on their leaders to take concrete action against climate change. The Egyptian authorities ban protests without prior approval by the Ministry of Interior and have a record of using unlawful force and mass arrests to crush them. Fear of reprisals against any critical voices [may] hinder participation by civil society at COP27.”
Diab shares these sentiments. “The choice of the exclusive and remote resort of Sharm El-Sheikh as the location for COP27 demonstrates that the government is not keen on local civil society involvement or public scrutiny.”
Finance Minister Maait said: “We have a plan to reduce carbon emissions and ensure that Egypt will be a country which is leading [on climate action]. Our conference, to be held in Sharm El-Sheikh, will be 100% green.”
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President Al-Sisi has announced various initiatives to transform Sharm El-Sheikh into a “Green City”. These include the establishment of charging stations for electric vehicles, more frequent recycling, and according to the Minister for Tourism and Antiquities: “The hotel and tourist establishments of Sharm El-Sheikh will have to present a green certificate as proof of the application of environmentally friendly practices.”
However, these initiatives are exclusive to the host city. Benghazi believes “Egypt is likely to use hosting the COP27 as an opportunity to whitewash its abysmal human rights record.”
These challenges to the COP are significant. At a time when immediate and palpable climate action is necessary, it is important to ask whether Egypt’s motives and approach are in line with what is necessary for COP27 to succeed. Egypt’s successor as host in 2023 will be the United Arab Emirates, which comes with its own set of problems. Climate activists hope Egypt will set the right kind of precedent.
