The United States Deputy Special Presidential Envoy for Climate, Jonathan Pershing, has urged Western investors to consider if fossil fuels are still good commercial opportunities in Africa or anywhere else.
In a statement on the state’s website, Pershing said, “There is the risk in particular that climate change will make an operation more difficult, and as a company looks at those kinds of physical risks, it is going to have to assess whether the product is worthwhile. But there is another risk, and that is a risk of regulatory action and a risk of financial action, and I believe that is getting more and more explicit.
“We are seeing around the world as countries develop and implement policies on climate there is an increasing implicit or, in some cases, explicit carbon price.
“So if you are a company looking to invest in oil and gas, you have to ask yourself, is the world moving in a way that will open that door to being a commercial and an opportunistic investment, or am I going to be left with a stranded asset? I would not bet very strongly on a fossil fuel future if I were an investor.”
He added that the African community was making its choices.
“They are looking to move even away from oil and gas and into an alternative future-leaning view that is zero-carbon,” he said.
He noted that the United States President, Joe Biden invited South Africa, DRC, Kenya, Gabon, Nigeria to the climate summit.
The secretary of the United States said, “So we were looking at how we get diversity in the mix. We looked at some of the big players. We want those G20 players. South Africa is part of the G20 discussion. They then felt like a legitimate clear voice.
“Interestingly, while it’s got a huge economy and the largest population, Nigeria is not in the G20. But the idea of having an African conversation and not engaging the Nigerians didn’t make sense, so clearly you want to bring that very large voice to the table.
“And there is some very interesting work going on there both in thinking about what’s happening on adaptation in the north, how they’re thinking about managing significant constraints around their oil and gas production which has had both economic benefits but huge damages, and a transition could be an opportunity for them, and at the same time, they can minimise the emissions from the methane coming out of the flaring from those oil and gas activities. So, huge windows for Nigeria.”
He said there was an economy-wide requirement for a green transition, with many countries considering the inclusion of hydrogen as an opportunity for the future that could replace fossil fuels, green hydrogen produced from solar energy.
