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Abstract

Ambitious climate policy increases the cost of energy and therefore has important interactions with the prospects of development in the countries of Sub-Saharan Africa. These interactions include the potential for gain for the continent in the form of new trade opportunities and climate finance. In this paper we quantify the costs and benefits of climate policy in Sub-Saharan Africa. Using an Integrated Assessment Model, we consider key characteristics of the continent, including the favorable conditions for renewable energy. A newly designed scenario analysis allows identifying the main drivers of the results. We show that Sub-Saharan Africa could implement climate policy in line with the 2 °C target at roughly net zero costs if the international community follows up on its commitment towards supporting developing countries as declared in the Paris Agreement. Sub-Saharan Africa could become an important supplier of energy from biomass and could thus even benefit from more ambitious climate policy due to higher demand for this source of energy. The absence of a painful trade-off between short-term development and long-term climate stabilization could provide policy-makers with a much richer policy option space than previously considered. One such option is to link climate policy with poverty reduction through, for example, the provision of clean electricity.