(Arusha) – Global policies and geopolitical issues have a direct impact on the fight against climate change, as evidenced by recent developments in energy production, the growth of coal exports, and challenges faced by countries like Tanzania.
In its 2023 report, the Bank of Tanzania (BoT) revealed a threefold increase in coal exports, rising to $299 million (807.3 billion Tanzanian shillings) in the 2022/23 fiscal year, compared to the previous year. This surge in coal sales is largely attributed to increased global demand following supply shortages caused by the ongoing war in Ukraine.
The report also highlighted a significant rise in coal production, which reached 2.51 million tons in 2022, compared to 976,319 tons in 2021 and an average of 500,000 tons over the past five years.
Investment and business advisor Reselian Manaiya explained that European countries, which had relied heavily on Russian gas for energy production, were forced to look for alternative energy sources after sanctions were imposed on Russia due to the conflict. This shift in energy needs has contributed to the increased coal production in Tanzania, as countries seek other viable options for their energy demands.
Tanzania’s coal production is concentrated in the Ruvuma region, particularly in Ngaka and Mbalawala, with the Kiwira mine in Mbeya also playing a significant role. According to the Ministry of Minerals, the coal is primarily exported to African and European markets.
Despite the clear scientific consensus that fossil fuels (such as coal, oil, and natural gas) are major contributors to climate change, global production of these energy sources continues to rise. Professor Pius Yanda, a climate change expert at the University of Dar es Salaam, noted that over 70% of global warming is caused by the use of fossil fuels, with deforestation contributing another 25%.
The United Nations Environment Programme (UNEP) has acknowledged that fossil fuels are the primary drivers of climate change. To mitigate severe global warming, UNEP advocates for reducing fossil fuel production and consumption by at least 6% annually.
The International Energy Agency (IEA) also reported a significant increase in fossil fuel production, with global coal output reaching 6.1 billion tons in 2022, compared to an average of 2 billion tons in 2000. Oil production rose to 4.52 million tons, a more than 40% increase, while gas production reached 3.71 million tons, marking the highest levels in the history of global energy production.
These increases in fossil fuel production are in direct contrast to the commitments made under the United Nations Framework Convention on Climate Change (UNFCCC) during the 2015 Paris Agreement (COP21), where countries pledged to reduce greenhouse gas emissions. The goal was to limit global warming to below 1.5°C by 2030. As of 2023, global temperatures had already risen by 1.1°C.
However, reports suggest that countries will continue to increase fossil fuel production. For instance, the Covering Climate Now network quoted the New York Times, which reported that the United States is projected to extract more oil and gas than ever before by 2030. Russia and Saudi Arabia are also planning similar increases in fossil fuel production.
Despite the global climate change agreements, there is little accountability. According to the UNFCCC website, there are no binding laws requiring countries to phase out fossil fuel use or compensate for the pollution they have caused. The Paris Agreement is described as a voluntary treaty, where countries set their own national goals for reducing emissions and report progress without legal obligations to eliminate fossil fuel consumption.
Professor Yanda emphasized that diplomatic pressure will be crucial in holding countries accountable, noting that Africa, despite contributing little to global pollution, is the continent most affected by climate change. He also pointed out that wealthier nations had promised to allocate $100 billion annually to help developing countries cope with climate impacts, but this pledge has not been fulfilled.
According to reports from the IEA and the World Energy Council, the reliance on fossil fuels is deeply embedded in the economies of many countries. These energy sources power key sectors such as manufacturing, transport, and infrastructure, and transitioning to renewable energy is costly and requires significant time and investment.
Another factor is the energy security that fossil fuels provide. Many nations depend on these sources due to their ease of access and lower costs compared to renewable energy, which is often hindered by technological and climate-dependent challenges.
The origins and goals of the energy treaty that governs much of this situation date back to the early 1990s. The agreement was designed to foster energy cooperation between energy-rich nations, such as those that were part of the former Soviet Union, and Western European countries.
Investment advisor Reselian Manaiya explained that the treaty was formed in the context of the political environment following the Cold War, with the main aim of ensuring energy access for Europe. However, today the treaty has become an obstacle to global efforts to combat climate change.
“This treaty protects companies that produce oil and natural gas from international organizations by shielding them from stringent environmental laws that may be enacted by member countries,” Manaiya explained.
He suggested that Tanzania should reconsider its involvement in this treaty, which is supported by some European and Asian countries.
In the context of Tanzania’s involvement in global climate policies, Olivia Costa, Director of the Tanzania Trade and Investment Coalition (TATIC), highlighted that although the ECT (Energy Charter Treaty) had been revised in 2018, climate change impacts were not adequately addressed. As a result, some European countries have signaled their intention to withdraw from the treaty, seeing it as a barrier to implementing the Paris Agreement.
Costa added that joining such treaties could trap countries like Tanzania, preventing them from fully exploiting their natural gas and oil resources for economic development due to potential legal conflicts with international investors.
TATIC’s analysis showed that over the past decade, Tanzania has lost more than 2 trillion shillings in failed investment arbitration cases at the International Centre for Settlement of Investment Disputes (ICSID), many of which were related to bilateral investment treaties (BITs).
Tanzania has also faced challenges in attracting foreign direct investment (FDI), despite entering into agreements aimed at boosting such investments. The TATIC analysis revealed that while Sub-Saharan Africa contributes 12% of the global population and 60% of arable land, it only accounts for 2% of global trade, 2% of global GDP, 1% of industrial production, and 3% of global FDI flows.