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RELATED ANALYSIS FROM CARNEGIE

POLICY RECOMMENDATIONS

The EGD is mainly an internal policy instrument, yet its potential global spillovers will reach African countries in view of the strong economic and historical ties between the continents. Such effects will be felt in the market for agriculture, fossil fuels, and other natural resources. The impacts will also occur through the channels of Europe’s financial muscle, technologies, and standards.

No outcome is predetermined, however. In fact, the transition envisioned in the EGD offers the promise of overhauling EU-Africa relations from the donor-recipient orientation of the past toward a mutually beneficial partnership in the twenty-first century if the right steps are taken now. These steps include:

To tap into the opportunities presented by the EGD and mitigate potential risks, African countries must clearly articulate and assert their own climate transition agendas. They should outline their own climate change priorities, considering their resource endowments, historical legacies, development strategies, and geopolitical interests, while also presenting clear demands of the EU around specific aspects of the EGD. Elements of these transition agendas can include:

Research communities have a role to play as well. There are knowledge gaps where further study is needed: on generating better data and conducting in-depth forecasting, conceptualizing a just transition for Africa attuned to the continent’s realities, examining how to avoid replicating the technology dominance and dependency of the oil and gas era, and advocating for clarity on the allocation of EU climate financing across industries, sectors, and countries.

THE EUROPEAN GREEN DEAL: A VISION TO COMBAT CLIMATE CHANGE

The EGD is a roadmap for a socioecological transition to a low-carbon future and provides building blocks for a green economic strategy in Europe.1 It comprises eight detailed policy areas (see appendix 1) as well as a European Climate Pact and a European Climate Law. The EGD aims to deliver on the European Commission’s vision to reach net zero emissions of greenhouse gases by 2050, decouple economic growth from resource use, and leave no person or place behind. The EU aspires to be the first mover in a global race to define new sustainability standards, develop green technologies, and establish future markets. As an intermediate step toward achieving the EGD objectives by 2050, the European Commission adopted on July 14, 2021, the Fit for 55 package of policy proposals to cut emissions by at least 55 percent from 1990 levels by 2030.2

Olumide Abimbola

Olumide Abimbola is executive director of the Africa Policy Research Institute in Berlin.

The emerging path toward a net zero carbon future as outlined in the EGD matters greatly for African countries. The EU is the world’s third-largest economy after China and the United States, representing 16 percent of global gross domestic product (GDP) in purchasing power parity.3 It is also one of the three largest actors in international trade, accounting for 15.6 percent of global imports and exports.4 Therefore, reduced European demand for fossil fuels could depress global commodity prices, reduce the revenues of oil-dependent African countries, and disrupt their economies. At the same time, Europe’s transition to a green future could benefit African countries that have important “green” minerals, like cobalt and nickel, in abundance. As the EU is Africa’s largest trade partner—with a 28 percent share of both exports and imports with the continent—and is home to four of the ten economies that invested the most FDI in Africa between 2015 and 2019, Africa can expect other impacts as the EGD reshapes the EU economy, governance, and foreign policy.5>

This paper seeks to identify the implications of key EGD components for African countries. This analysis draws on the European Commission’s communications published under the banner of the EU Green Deal and other communications published in this context. The analysis is structured around seven main areas: agriculture, biodiversity, energy, CRMs, circular economy, new technologies, and finance.

AFRICA IN THE EGD: THE NUMBERS AT STAKE

SEVEN IMPLICATIONS OF THE EGD FOR AFRICA

NEW AGRICULTURAL STANDARDS: FARM TO FORK STRATEGY

The farm-to-fork strategy is a policy package that aims to promote an agroecological, healthy, and affordable food system in the EU. It is a cornerstone of the EGD. As part of the strategy, the EU seeks to promote new global food standards with the aim of becoming a standard setter for sustainability.6 Agriculture is one of the main export sectors in Africa: it absorbs about 50 percent of the labor force and accounts for 40 percent of GDP.7 Agri-food trade between Africa and Europe makes up approximately 16 percent of total exports trade with Europe, amounting to about 16.5 billion euros ($19.6 billion). Cocoa makes up 33.4 percent of the trade, while edible fruits and nuts represent 24.3 percent.8

Requiring compliance with food regulations as a condition for accessing the EU market is a strong incentive for exporting countries to adapt to the EU’s new standards.9 However, it will constitute an additional nontariff barrier for African countries. Currently, under the EU’s Common Agricultural Policy (CAP), EU farmers receive up to 50 percent of their income as direct payments. This has, in part, helped to make the EU the leading global exporter of agri-food and given its farmers a competitive advantage over their African peers. Thus, new food regulations under the EDG will further burden African countries, since they do not enjoy the CAP subsidy and are already challenged with meeting European market rules of origin as well as sanitary and phytosanitary standards. As one of the core EU policies, the CAP is key to helping the union achieve its ambitions in the agricultural sector. The reformed CAP stipulates that 30 percent of the overall EU budget must contribute toward climate objectives.10 A study by the Center for Development Research in Germany suggests that stronger environmental and climate guidelines could dampen European agricultural exports to Africa.11

The EU can nevertheless partner with Africa in its efforts to combat agroecological challenges. The African agricultural sector faces serious threats from both climate change and land degradation. If land degradation continues at the current pace, more than half of the cultivated agricultural area in Africa will be unusable by 2050.12 African countries can adapt to and even combat the manifestations of climate change with the use of agroecological technologies. The EU can provide financial and technological assistance to complement Africa’s effort. One avenue to channel such support can be through the African Union’s Comprehensive African Agricultural Development Program, which aims to address Africa’s agroecological threats and accelerate adaptation to new standards.13

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