Potential trade-offs between trade, economic growth, and environmental objectives in the AfCFTA context

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As African Union member States are implementing the African Continental Free Trade Area (AfCFTA) Agreement with the objective of promoting sustainable social-economic development in Africa they must strike a balance between achieving this goal and the urgency of climate action. In fact, as of COP27, most African countries have submitted their Nationally Determined Contributions (NDCs) to mitigate the impact of climate change and establishing a carbon market is now on their policy agenda.

Against this background, the United Nations Economic Commission for Africa (ECA) and the Centre d’Etudes Prospectives et d’Informations Internationales (CEPII) jointly undertook analytical work to examine how industrial transformation and economic development led by the AfCFTA reform can be made consistent with Africa’s climate ambitions.

Key findings indicate that:

Implementing the AfCFTA Agreement and achieving Africa’s climate objectives are compatible: With climate policies implemented in addition to the AfCFTA Agreement Africa’s GHG emissions could decrease by around 25% with intra-African trade still increasing by about a-third, in 2045, and compared to a scenario without AfCFTA and climate action.

Continental coordination among African countries in terms of GHG emissions reduction is more efficient than an uncoordinated approach, including through existing, highly variable (cross-country), and often ambitious NDC targets.

Africa’s climate objectives can accelerate a transition to renewables.

Question:

What potential trade-offs do you see between trade and economic growth, on the one hand, and environmental objectives on the other hand, in the AfCFTA context?