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Climate transition: Africa among potential winners as fossil fuel-dependent nations face risks – EnviroNews
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A new study by the Potsdam Institute for Climate Impact Research (PIK) has identified significant economic opportunities for African countries in the global transition away from fossil fuels, while warning that 19 countries heavily dependent on oil, gas and coal revenues could oppose ambitious climate action.
The study, published in Nature Sustainability, examines how climate policies could reshape national economies, assets and geopolitical relationships across 169 countries, highlighting the potential benefits and risks of the global fight against climate change.
According to the researchers, countries highly vulnerable to the phase-out of fossil fuels account for only six per cent of global economic output, while African nations stand to benefit significantly from their vast solar energy potential.
The study also finds that the economic interests of major global powers, including the United States, China and countries in Europe, are affected by climate policy in surprisingly similar ways.
The researchers assessed the impact of climate policies on national wealth through four key channels: declining demand for fossil fuels and the resulting potential losses in oil, gas and coal revenues; reduced economic damage from climate change; new opportunities for solar and wind energy development; and the growing value of countries’ capacity to absorb and store carbon dioxide through forests and the management of natural areas.
Guanna Pan, a researcher at PIK and lead author of the study, said the analysis provides a comprehensive picture of how countries could gain or lose economically from different aspects of decarbonisation by the end of the century, depending on the ambition of climate policies.
The research also examines potential geopolitical tensions arising from unequal economic impacts, while identifying opportunities to strengthen international cooperation through targeted incentives.
Five Groups of Countries Identified
To assess the distribution of economic risks and opportunities, the research team classified the 169 countries into five groups with similar interests in climate policy.
The first group comprises 19 countries whose economies depend heavily on fossil fuels and which could face significant losses as the world reduces its reliance on oil, gas and coal. According to the study, these countries could be inclined to resist ambitious climate measures.
The second group consists of 51 countries in the Global South that have strong economic incentives to accelerate the climate transition because they face particularly severe climate-related damages if global warming continues.
The third group includes 13 countries with high renewable energy potential, most of which are in Africa. These countries could benefit from expanding solar and wind energy production as the world shifts towards cleaner energy sources.
The fourth group comprises 17 countries with high carbon sequestration capacity, giving them an economic interest in protecting and managing forests and other natural ecosystems that absorb carbon dioxide.
The fifth group consists of 69 economies experiencing moderate overall impacts from climate policy, including the European Union, China and the United States.
Despite the strong interests of some countries in either resisting or accelerating the transition, the study highlights a significant imbalance in global economic influence.
The 19 fossil fuel-dependent countries account for just six per cent of global economic output, while the three groups expected to benefit particularly from climate protection collectively account for 13 per cent.
By contrast, the 69 economies in the moderate-impact category represent 81 per cent of global economic output.
Although the absolute economic benefits of climate action for these major economies can be substantial, particularly through the avoidance of climate-related damage, the gains may be less pronounced as a proportion of their economies than in countries classified as strong beneficiaries.
Africa’s Renewable Energy Opportunity
The identification of 13 countries with high renewable energy potential, most of them in Africa, underscores the economic opportunities available to the continent as global investment shifts towards cleaner energy.
By developing their solar and wind resources, African countries could position themselves to benefit from the changing global energy landscape while reducing exposure to the economic and environmental costs associated with fossil fuel dependence.
The study’s findings also suggest that protecting forests and other natural ecosystems could create additional economic value for countries with significant carbon sequestration capacity.
However, translating these advantages into economic gains will depend partly on the effectiveness of national policies and international cooperation in supporting renewable energy development, protecting natural carbon sinks and managing the economic consequences of decarbonisation.
Researchers Call for Stronger International Cooperation
The researchers emphasised that although climate action offers substantial long-term benefits for the global economy, differences in national economic interests must be recognised and addressed to secure wider international support.
They recommended the use of negotiated package deals to strengthen climate cooperation where countries’ interests diverge.
Under this approach, concessions or additional support for countries reluctant to adopt ambitious climate policies could be linked to commitments on trade, research and development.
Financial transfers could also be used to compensate countries experiencing economic losses as a result of the transition away from fossil fuels.
The researchers said such arrangements could help reconcile competing national interests and encourage broader participation in international climate action.
Ottmar Edenhofer, PIK director and co-author of the study, said it was important to recognise that climate policy does not simply reduce the value of existing assets, particularly those associated with fossil fuel production, but also creates new economic assets.
Against the backdrop of renewed opposition to ambitious climate policies, Edenhofer stressed that the transition reshapes the capital stock of national economies in ways that could safeguard long-term prosperity.
The study concludes that effective climate action requires a collective global commitment, supported by a clear understanding of how countries stand to gain or lose economically. By identifying these differences and recommending targeted incentives to address competing interests, the researchers argue that governments can strengthen international cooperation and make the transition towards a low-carbon global economy more economically and politically sustainable.
