Okereke: Nigeria’s Oil Industry is Very Vulnerable to Climate Change

Prof. Chukwumerije Okereke leads the Governing Inclusive Green Growth in Africa, a research think-tank funded by the United Kingdom Research Council to help Nigeria and other African countries transit into the green economy. On the sidelines of GIGGA’s recent meeting in Abuja, he spoke to Chineme Okafor on the pressures climate change is exerting on Nigeria’s oil industry. Excerpts:

It is a pleasure to have you talk to us about climate change and the risks it portend to Nigeria’s energy industry. Could you tell us about yourself and works?

Thank you. My name is Chukwumerije Okereke. I am a professor in environment and development at the Department of Geography and Environmental Science at the University of Reading. I am also a senior fellow at the Oxford University Centre for the Environment, in the UK, and I am the Associate Director of the Leverhulme Doctorate scholarship programme on climate justice at the University of Reading.

Before joining Reading, I was the head of the Centre for Climate and Development at the Smith School of Enterprise and Development at the University of Oxford. My specialisation is in the area of the interlink between environment and development with special emphasis on climate change governance, as well as the governance of energy globally.

Recently, you led a group of intelligentsias and researchers to brainstorm in Abuja on climate change and energy issues in Nigeria, Kenya, and Ethiopia. What really went down?

Yes; very recently, the government of the UK made a call for research proposals that will help address major 21st century global challenges, and they titled it the ‘Global Challenges Research Fund’. As part of response to that call, I put a proposal to explore the dynamics of the governance of green economy in Africa.

I suggested to the UK Research Council that understanding the dynamics of the governance of the green economy in general and particularly the governance of inclusive green economy is a major challenge facing Africa and the world. My proposal was one of the 22 that were accepted for funding by the UK government under the Global Challenges Research Fund. What my project seeks to do is to form a multidisciplinary and international network of academics, practitioners, think-tanks, NGOs, governments and entrepreneurs, to come together to deliberate and come up with research agenda that can move our understanding of the development of green economy growth in Africa forward.
We had a workshop meeting in Ethiopia in March of the Governing Inclusive Green Growth in Africa (GIGGA) network, and the second leg of the GIGGA network was what happened in Abuja.

Paradoxically, Nigeria, one of your focal points, has longstanding energy poverty, despite her huge energy resource base. Are you getting anything different from the known reasons for this?

I should have stepped back to clarify that the GIGGA network is interested in understanding the dynamics and investment options, and how Africa as a whole can move forward in the area of governing green growth. There are three focus countries – Ethiopia, which has made tremendous advancement in the governance of green economy; Kenya, because it is also a leader in green economy and growth in Africa; and Nigeria, because it is the biggest economy in Africa and has made some steps in green economy governance.

However, Nigeria’s challenges are multifocal and the key paradox is that it is too poor to be rich and too rich to be poor. It is endowed with enormous natural resources especially oil and gas, but the bulk of these resources is exported in a low value form with very little value addition.

We, now, have a situation, where the future of crude oil is no longer certain and there are multiple forces that are acting on this. We, now, have climate change which is a development challenge for the entire globe, and an international agreement that is seeking to curtail the amount of CO2 emission from companies and countries, and that means that oil is now being seriously regulated.

In addition to that, we, now, also have a revolution occurring in the world where a number of countries are investing in renewables and the US now profiting from fracking of gas, to mean that the cost of our oil is going down. In response to climate change, many countries are taking actions to encourage renewable energy.
Secondly, Nigeria actually has an abundance of renewable energy resources and so it is entirely possible to close the huge energy gap we have now. There is massive energy gap and one of the problems for that is that it costs a lot to generate electricity from oil sources, and the idea of a green economy offers Nigeria the opportunity to close this massive energy gap through solar and wind.

But why is it that this is not happening?

There are many reasons – lack of awareness. I designed the first green growth strategy in Africa, which was the Rwandan national green growth plan, and the reason it happened was because President Kegame understood the situation and that Rwanda, which imports oil could close its energy gap by investing in green growth.

The second barrier is the myth that we are still better off mining our oil. There is inertia in life that people cling to what they know, but the future belongs to people who are able not to think about the present but also project into the future and ask: where would the energy resources from the future come from? And take decisions to tap into it as frontrunners because the question is not if every country will go green or not but when they will, and those who start now will put themselves in a vantage position to become exporters of green technology, otherwise, we will end up importing solar PVs and batteries.

The green economy has the potential to offer far more jobs than oil. For over 40 years of digging up oil, we have employed less number of people, but renewables can employ more people.
We also have vested interests, and it is not peculiar to Nigeria because it is not in the interest of those who are profiting from the structure now to allow governments to move away from oil. We have over 40 years of people who have invested so much in oil and they would not sing the praises of governments moving away. But this is where the lack of political will comes into play because it is not enough to make statements without some political backings.

Are there obvious risks that climate change portends for Nigeria’s oil industry?

There are two key forces – climate change impacts and desertification, but especially through flooding and sea level rise and vast proportion of the oil installation we have in the Niger Delta region can be affected by climate change.

We had a devastating flood in 2011 and I think a lot of the installations were affected. So, one dimension is the climate change impact, which is bound to affect oil facilities. The second is the fact that other countries are moving ahead to develop renewables, and that leaves us with a question of who will buy our oil.

Nigeria is very vulnerable to climate change; most of the oil installations we have in the coastal regions are vulnerable to climate change impacts. Less than one metre rise of the sea level stands to wipe the entirety of Lagos and about 40 metres from the coast into the hinterland, which covers a lot of Delta; Warri, Port Harcourt and others. There is the possibility that we can lose a vast amount of our oil installations. So, Nigeria should be at the forefront of driving the conversation in climate change and green economy.

China is the world’s fastest developer of wind turbine; Germany has indicated its interest to go completely green and set a moratorium on nuclear energy. Even Saudi Arabia and other Gulf countries, which is a major oil producer is developing renewables. A vast proportion of the Abu Dhabi city is on renewable, and so there is the dynamics that if we don’t shift to renewable energy, oil prices could fall to a point that it is unable to support the economy.

In terms of green funding out there, what is Nigeria losing from its poor or non-existent green growth governance framework?

Nigeria loses billions actually, because even a country like Rwanda attracts more money than Nigeria, and it is country of about 16 million people. This is sad because a number of developed countries actually expect Nigeria to lead in this area because we have the sun, wind, know-how, and people, but need a clear strategy to begin to develop bankable proposals on projects and go to the green climate fund and others to begin to attract big scale renewable energy projects.

When will you finish work on the framework you are developing and what are the expectations from it?

Our next meeting will be in Kenya, in February 2018, and then, we will have a round-off seminar at Reading in the UK in July 2018. We will produce a report, which will outline the crucial questions that need to be asked, explored in more details to understand the dynamics of green economy because we know that green economy is good for the country. But a lot of research needs to be done to unpack its offerings to say in specific terms the amount of jobs it could generate; what are the vested interests; what are the political economic questions that need to be answered; what are the core motivations that are driving African countries that are embarking on greens; and what are the key things that are barriers to further movements; what is the financial implications of particular projects.

We need the research to understand really what colour of green that suits Africa; what are the strategies that countries need to embark on to produce better strategies, amongst others. And then we are hoping that we will get further funding from the UK to then engage in more details with those researchers. However, we are already working towards some tangible deliveries before the end of the project cycle.

There are three project deliverables – mapping of green economy activities in the whole of Africa, literature review of what has been published in green economy in Africa, and then capacity gap analysis which is seeking to understand the capacity needs of Africa in terms of moving towards green economy.

There has to be a plan to substitute oil with renewables because if you just stop digging oil, you are going to go poor, so there has to be a phased in strategic substitution of oil with renewables. I am not advocating that we completely stop oil but a balanced energy mix.