How AI adoption may stall Africa’s net-zero target
- Alexander Sassen (van Elsloo)
- Mar 22
- 5 min read
According to the International Energy Agency (IEA), Africa’s electricity generation is 74,9% fossil based. The continent's total primary energy consumption is 49% based on fossil fuels and about 43% on biofuels & waste [1]. The latter category, however, is mostly of the polluting kind (burning of waste, dung etc.). Only 6,84% of Africa’s total energy consumption comes from modern renewables. It therefore stands to reason that with the current energy mix, the forecasted economic growth in Africa would be mostly fueled by non-renewable energy sources making achieving net zero difficult. This blog analyses the effect of the rapid uptake of AI on net-zero targets in Africa considering multifaceted issues such as how African countries can prepare for an explosion in energy demand, achieve the global target of net zero and ensure that the UN’s sustainable development goal on decent work and economic growth, SDG 8, is realized.
A lot has been written on AI and its effects on economic growth. In 2023, Goldman Sachs analysts estimated that the impact of AI on GDP, in the long term, could be seven percentage points [2]. In their analysis, the banks’ analysts looked at the direct effects, and the indirect ones; meaning they do not only consider the positive effects of AI “automation” of certain task/jobs, but also of the reallocation of labor and the creation of new tasks and jobs due to AI. If this all pans out, it will mean that the world economy will grow faster than previously estimated. Logically, for Africa, this growth will happen sooner than most forecasters expect (the growth curve will rise sooner and more steeply). Depending on the energy intensity and type of energy used, this could lead Africa further away from reaching net-zero targets.
In this respect, Africa is vulnerable, as the current energy mix on the continent is often less green than those in developed markets. Also, according to the International Renewable Energy Agency (IRENA), Africa has only received 2% of global investments in renewable energy in the last two decades, so expanding renewable energy capacity and infrastructure seems to be a bottleneck.
It is unsurprising that since 2000, Africa’s energy-related CO2 emissions have risen by 30% according to the IEA. While Africa accounts for less than 3% of global energy-related CO2 emissions, the continent is still moving in the opposite direction of net zero and AI accelerated economic growth will speed this up. The magnitude of this development should not be underestimated. With 600 million people that currently have no access to electricity, a more rapid and higher economic development of Africa, might bring online hundreds of millions of people leading to an increase in energy consumption. Furthermore, others will likely move up the wealth ladder and consume more energy per capita due to more travel, more air conditioning, more heating, more housing activity, bigger homes, changing diets, and so forth. The effect this economic development could have on CO2 emissions can be clearly shown by comparing the CO2 per capita figures of regions that have higher GDP per capita. In 2019, Africa’s CO2 footprint was 1,2 tCO2 per capita, while Latin America stood at 2,7 tCO2, Asia & Pacific at 4,4 tCO2 and the developed nations at 9,5 tCO2 per capita [4].
One item that perhaps is not given due attention to in this discussion is the possible impact of AI on education and on economic development (and CO2 emissions). In Africa, education is vital, and AI could finally negate or bridge the many inhibitors to world class education. As described in a recent blog post by my colleague Dr. Praneschen (Che’) Govender, education in Africa could happen cheaper, quicker, better and for more people, which in the medium term might amplify the above-mentioned socio-economic effects [5] .
If Africa moves even halfway towards the level of energy consumption in the developed world, Africa will become an increasingly complicated factor for the net-zero agenda with an increasingly bigger impact on global CO2 emissions (and other greenhouse gases, pollutants and water usage). As the extra energy demand this will create cannot realistically be met by renewable energy alone, net-zero targets across the globe will have to be re-examined and recalibrated accordingly. It also shows that developed nations should focus their net-zero help to Africa by investing in and (co-)financing renewable energy capacity and infrastructure, something which was, in part, advised by the Africa Finance Corporation in a white paper titled 'Roadmap to Africa’s COP: A pragmatic path to net zero' [6].
Here, Africa has a leg up on most developed nations, as they do not have to deal with legacy energy systems to the same degree as developed nations; going for renewable energy is thus less complicated. However, failing to steer investments in that direction, might mean that Africa might in fact build a fossil fueled energy system, which will furthermore delay the transition to renewables needed to reach the net-zero targets.
So, while AI has the potential to speed up the economic development of Africa and lift many Africans out of poverty and into prosperity, its effect on CO2 emissions (and other negative environmental effects) will most likely mean that current net-zero plans will not suffice.
Considering that many of the current net-zero plans presented by governments globally were already falling short of reaching net-zero targets in a timely manner, the AI revolution will most likely make this more difficult, thus necessitating a global reshuffling of net-zero targets and timelines.
In short, the AI revolution, will mean:
African countries' GDP will grow faster and sooner;
net-zero targets and timelines will be negatively affected by the AI revolution;
net-zero targets will need to be recalibrated to consider faster GDP growth globally;
net-zero targets between developed nations and Africa (and other developing nations and regions) will require renegotiation to allow for Africa’s faster economic development and
African investments in renewable energy capacity and infrastructure should be stimulated by developed nations;
With current political winds shifting rapidly, it will be interesting to see how the net-zero agenda will change in general, and for Africa in particular.
References
Author's bio
Alex Sassen Van Elsloo has a Bachelor degree in International Relations, a Master in International Business and an MBA. After more than a decade in the equity business as an equity analyst and stockbroker, he began his own research company. At the beginning of 2019, he decided to share his knowledge of finance with students at Hotelschool The Hague (HTH). In 2020 he decided to specialize in ESG (Environmental, Social, and Governance) regulations and is in the process of starting an ESG consultancy company, Conifer Advisory Services. Since August 2023, Alexander has been involved in the HTH Research Department. In this capacity, he guides students' Lycar projects on Finance and ESG. Besides writing articles on Finance and ESG, Alexander’s biggest project at the moment is his forthcoming book on ESG.
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