Namibian green energy should help Europe meet its climate targets. But who stands to gain from the big project?
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| Green energy from desert: The bet on hydrogen |
Inequality exists across the planet. This is about to change as a result of the development of green hydrogen. At the UN Climate Change Conference, Commission President von der Leyen and Namibian President Geingob signed a declaration of intent on strategic collaboration on hydrogen and sustainable raw resources. The importance of the signatories demonstrates that the agreement should be viewed as a flagship initiative on the path to the European Green Deal and the accompanying European energy transformation.
According to the European Union, renewable hydrogen should become Namibia's economic development engine. According to Namibia's President, green hydrogen would result in huge infrastructure development, job creation, and contribute to shared prosperity. Several international joint ventures are currently developing massive factories on Namibia's coast to supply ammonia as an energy source for renewable hydrogen to Europe beginning in 2025. Along with the EU and other member states, the German government aims to invest in hydrogen projects in order to meet the ambitious goal of achieving carbon neutrality by 2045.
One could believe that everyone's prospects are bright. Will this method, however, always result in a win-win situation? If Europe solely considers its own economic and environmental interests, it is doubtful that green hydrogen will become the motor of socio-ecological revolution in Namibia. If profits from the hydrogen sector flow to foreign joint ventures and only those Namibians who are entrepreneurially active in the hydrogen sector and mostly belong to the wealthier classes benefit, there is a risk that green hydrogen will tend to increase the already very unequally distributed wealth rather than reduce it.
In Namibia, more than 40% of young adults (15-24 years old) are unemployed, despite having university degrees. Before the corona epidemic, more than 57 percent of the working population was already employed in the informal sector, with no social protection in the case of wage loss. Furthermore, more than 43 percent of Namibians lack connection to the power grid. Poverty is multidimensional, especially in rural regions. A huge number of corruption scandals and anomalies in the relationship between state officials and multinational corporations, particularly in the raw resources industry, have recently contributed to a loss in public trust in political claims of socioeconomic gains from such projects.
In light of this, the EU must set itself the objective of unlocking the transformational potential for improving socioeconomic living circumstances in prospective supply nations such as Namibia, in addition to its own climate goals and boosting its economic position. Within the scope of the agreement, it is critical to examine social, ecological, and economic challenges outside Europe's external boundaries and to create the roadmap for strategic cooperation implementation for the period 2023-2024 appropriately. As criteria for Team Europe's investments with taxpayers' money are set, concrete norms, measures, and obligations should be agreed upon between the European and Namibian sides. The following three ideas may assist make the project a success for both parties.
First and foremost, what could be more clear than sending a portion of the green power generated into Namibia's electricity grid? The import of 60 to 70 percent of Namibia's electrical consumption, largely from South Africa, might be cut, bringing the Paris climate targets closer. Furthermore, a portion of the potentially substantial state money from the new business may be used to expand Namibia's electrical system. Furthermore, the EU and its member states might compel the multinational corporations engaged to make quotas of the power produced accessible to the Namibian people at preferential rates.
Second, according to business sector officials, green hydrogen would "inundate the Namibian labor market with jobs." There are well-paying employment available in the new industry, particularly for qualified engineers. As a result, the Namibian Engineering Council requires that locals fill management positions from the start, rather than foreigners, as is common in similar projects. It is possible that new jobs would have to be advertised on the Namibian labor market first, followed by additional individual further training offers from the employer if necessary.
The targeted development and transfer of knowledge in the knowledge-intensive parts of the value chain would be a decisive step for the long-term upgrading of the Namibian labor market, given the Skills Gap that exists in Namibia between the qualifications of many university graduates and the requirements of the labor market. In the middle of the year, the federal government and the Namibian government announced a scholarship program for young Namibians to build technical skills in green hydrogen. If these efforts are stepped up and the private sector is involved on a big basis, the long-term revolutionary potential of green hydrogen for the Namibian economy might be realized across sectors.
Third, corruption and environmental harm pose significant problems in prestige projects in the raw materials industry. According to the Extractive Industries Transparency Initiative think tank Institute for Public Policy Research, the government should combat corruption, make the long-term social and environmental impact of the raw materials sector visible, and increase Namibia's attractiveness as a business location (EITI).
This requires member nations to make the income from raw material exploitation more visible via accountability. This is meant to curb corruption while also promoting economic progress in the producing countries. For both moral and financial grounds, Namibia's admission should be made a condition for the anticipated European Investment Bank loan and EU investments, if only to limit the possibility of EU taxpayers' money ending up in the wrong hands. The Namibian government has already established accession to the EITI by 2025 as an anti-corruption goal.
The three recommendations described above fit nicely within the six pillars of the strategy, which the European Commission and the Namibian government want to finish by mid-2023. If the parties concerned do not agree to any precise criteria and norms, the social impact of the green hydrogen sector on the living situations of many Namibians would be fairly limited.
The author Patrick Schneider is the Friedrich-Ebert- Foundation's deputy country representative in Namibia, with a specialty on climate justice, social security, trade union activity, fair urban development, gender equality, and youth work.
Source: IPG