NAVIGATING NEW TURBULENCES AT THE NEXUS OF TRADE AND CLIMATE CHANGE: IMPLICATIONS AND OPTIONS FOR AFRICA

The report examines how developed nations are adopting 'climate-justified' protectionist measures, specifically the EU's CBAM and the US's IRA, which depart from previous neoliberal trade doctrines. It argues that these unilateral policies threaten African economic growth and industrialisation by creating market barriers and restricting policy space. The author suggests that Africa should oppose the CBAM, leverage the US's use of localisation to justify its own local content requirements, and campaign for the treatment of green technologies as global public goods through the reform of TRIPS rules.

• The European Union's Carbon Border Adjustment Mechanism (CBAM) acts as a financial levy on imports that functions similarly to a tariff, targeting products like aluminium, cement, electricity, fertilisers, iron, and steel starting in October 2023.
• Research indicates that the CBAM will negatively impact Africa's economy, with exports to the EU potentially declining by 4% in a 'lightest' scenario and by 5.75% in a scenario with higher carbon prices and broader product coverage, the latter causing a 1.12% drop in Africa's GDP.
• The United States' Inflation Reduction Act (IRA) provides US$391 billion in federal funding for climate-related measures, including incentives for clean energy equipment and electric vehicles, with a scale of funding nearly equivalent to the GDP of South Africa, Egypt, or Nigeria.
• The report argues that the CBAM and IRA represent a 'new protectionism' where developed countries recover industrial policy to maintain mastery over low-carbon technologies, often 'kicking away the ladder' by denying developing countries the same policy tools used during their own industrialisation.
• Africa has opportunities to move toward higher value-added production in green technology, such as producing wind tower and solar energy components, fuel cells, and sustainable textile value chains, supported by the African Continental Free Trade Area (AfCFTA).
• The author recommends that African countries should reject the CBAM and use the US's use of localisation to insist on their own right to implement local content requirements and campaign for the reform of TRIPS rules to treat green technologies as global public goods.

APA

Davies, R. (2023). NAVIGATING NEW TURBULENCES AT THE NEXUS OF TRADE AND CLIMATE CHANGE: IMPLICATIONS AND OPTIONS FOR AFRICA. African Climate Foundation. https://africanclimatefoundation.org/wp-content/uploads/2023/06/800793-ACF-Trade-and-finance-report-03A.pdf

Chicago

Davies, Rob. NAVIGATING NEW TURBULENCES AT THE NEXUS OF TRADE AND CLIMATE CHANGE: IMPLICATIONS AND OPTIONS FOR AFRICA. African Climate Foundation, 2023. https://africanclimatefoundation.org/wp-content/uploads/2023/06/800793-ACF-Trade-and-finance-report-03A.pdf.

Wikipedia

{{cite report |last1=Davies |first1=Rob |title=NAVIGATING NEW TURBULENCES AT THE NEXUS OF TRADE AND CLIMATE CHANGE: IMPLICATIONS AND OPTIONS FOR AFRICA |publisher=African Climate Foundation |date=2023 |url=https://africanclimatefoundation.org/wp-content/uploads/2023/06/800793-ACF-Trade-and-finance-report-03A.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{davies2023navigating, author = {Davies, Rob}, title = {{NAVIGATING NEW TURBULENCES AT THE NEXUS OF TRADE AND CLIMATE CHANGE: IMPLICATIONS AND OPTIONS FOR AFRICA}}, institution = {African Climate Foundation}, year = {2023}, url = {https://africanclimatefoundation.org/wp-content/uploads/2023/06/800793-ACF-Trade-and-finance-report-03A.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }