This month, cinemagoers will flock to see Black Panther: Wakanda Forever, seeking thrills from superheroes in the fictional African country which is rich in a world-saving metal vibranium. Meanwhile, in the real Africa, world leaders have flocked to the COP27 climate conference in Egypt, aiming for progress on agreed emissions reductions.

While the top brass at COP are surely too busy to catch a movie, the return of the Black Panther should remind them that African mining is highly relevant to their goals: buried in the soil of the host continent are the metals critical to moving away from humanity’s reliance on fossil fuels.

The main task of world leaders and climate negotiators in Egypt is to secure the path to emissions reductions. Yet they’re paying scant attention to the metals needed to move away from high-emitting fossil fuels...

At the halfway point of COP27 in Sharm El-Sheikh, Egypt, the role of fossil gas is both central to the climate conference’s outcome and still a hotly contested issue. Over the weekend, the Egyptian COP presidency held consultations about the “cover decision” that is the main outcome of COP, and which may feature reference to the role of fossil fuels and/or gas, specifically. (See this useful UN guide to the evolution of the COP26 cover decision, the Glasgow Climate Pact.)
 
In the run-up to these climate talks, the Egyptian presidency described gas as “the perfect solution,” and several countries made the case last week that gas should be a transition fuel. Others are pushing back, however. Former U.S. Vice-President Al Gore told world leaders on Monday that the recent dash for gas is a “dash down a bridge to nowhere.”
 
Although 70 percent of under-construction or planned gas projects are in North America, some of the most heated debate has focused on plans by African countries and other low-income producers that have contributed little to the climate crisis.
 
At NRGI, we have been exploring the role that just energy transition partnerships (JETPs) could play in helping this group balance development and climate goals. Interest in JETPs is running high at COP27. While JETPs have largely focused on coal producers so far, negotiations have also been taking place between international partners and Senegal, which will start producing gas in 2023. With Senegalese President Macky Sall suggesting a political agreement may be close, our working paper details recommendations for Senegal, other gas-producing countries, and international partners pursuing similar JETPs in future.

Read NRGI’s working paper and watch the recording from a related COP27 event.

Because of the trade-offs required, and the diversity of objectives, views and pathways involved, there is growing recognition that achieving just transitions requires widespread, inclusive and democratic deliberation. Yet traditional models of participatory decision making and transition options often draw on experiences in wealthy liberal democracies. They rest on key assumptions that do not apply elsewhere: the existence of a strong and well-resourced state able to provide retraining and compensation, an engaged and responsive private sector, a well organized labor movement, and spaces where informed and capacitated civil society can meaningfully engage without fear of violence. Few resource-rich African countries meet such requirements. Yet the fundamental shift in their economic and development models implied by energy transitions will not be possible without an active and informed debate between citizens and policymakers: a reimagining of just transition through open and inclusive dialogue.

IDS and University of Sussex research on “Making Space for Dialogue on Just Transitions in Africa’s Oil and Gas Producing Regions” with partner organisations in Nigeria, Kenya and Mozambique explores how citizens are making their voices heard, despite challenges, through a variety of invited and claimed spaces of participation. These include participation in national strategies and visioning exercises such as “Which way Nigeria?”, combining engagement with transnational governance processes such as the Extractive Industries Transparency Initiative (EITI) with local protest strategies in Mozambique, and legal activism to resist particular energy infrastructures such as the Lamu coal plant in Kenya or to press demands for compensation from oil companies in Nigeria. Support by external actors such regional and multilateral development banks, donors, civil society organizations, and investors can play a key role in accelerating and amplifying these efforts. A webinar on March 9 explored the obstacles to and opportunities for doing so.

Breaking silos, avoiding duplication

As climate action is an increasingly hot topic for funders, there is a risk that efforts to support just transition focus on setting up new platforms and mechanisms, rather than leveraging what already exists. Funders can invest in pivoting and re-energizing existing platforms, mindful of the limited bandwidth of civil society actors. For example, in Ghana, the “Alliance of CSOs Working on Extractives, Anti-Corruption and Good Governance” has successfully evolved to work with the new National Energy Transition Committee, calling for more inclusive and open dialogue on Ghana’s energy transition journey.

Connecting local and global agendas

A key challenge is that elite policy makers are hatching initiatives with global implications in relatively closed spaces with little if any consultation or engagement with civil society at the national and local levels. Examples include announcements from the governments of Nigeria and South Africa at the last COP in Glasgow. In bridging this gap international CSOs and funders can play a helpful role in connecting partners at the national or local levels to regional institutions and international institutions and transnational coalitions (such as the Open Government Partnership Civic Space Learning Network and the OECD Civic Space Observatory). There are also new international efforts to define a viable pathway to a just transition, including the Beyond Oil and Gas Alliance, the Civil Society Equity Review, the OECD Equitable Framework and Finance for Extractive-based Countries in Transition (EFFECT), the Fossil Fuel Non-proliferation Treaty initiative and a recently released Tyndall Centre report. Leaders of these efforts should form strong connections to civil society actors from resource-rich countries to amplify—not replace—local voices and ensure that governance and participation are at the heart of these efforts.

Challenging power and vested interests

Just transitions are often inhibited by strong vested interests wanting to preserve the status quo and resist change, or those who seek to capture transition opportunities for their own benefit. A just transition must challenge incumbent actors’ control of decision-making. Funders can support work to identify and map vested interests and how to confront them, help local actors to improve representation on key committees and decision-making processes, and invest in initiatives to clean up political party donations and revolving doors between energy companies and state regulators.

The next major COP in Egypt later this year represents a huge opportunity for African countries and civil society—and those that support them—to advance a vision of just transition and a set of strategies for achieving it than ensures not only that no one is left behind, but that longstanding inequities are remedied. This means acknowledging and addressing historical injustices as well as supporting and financing future low carbon energy pathways for African countries currently reliant on fossil fuels.

Photo by Rod Waddington via Flickr (CC BY-SA 2.0)

At the COP26 climate conference last year, governments reaffirmed their commitment to the goal of limiting global warming to 1.5°C. Achieving this will require a colossal and unprecedented shift away from fossil fuels to renewable energy sources like wind and solar—as well as provision of clean, affordable and reliable energy for the nearly one billion people currently living without it.
 
The wealthiest countries that have polluted the most should hold the primary responsibility for tackling climate change, both in cutting their emissions first and fastest, and in providing climate finance and support to countries like Ghana. Ghana’s President Nana Akufo-Addo emphasized this responsibility during COP26 when he called for a fair and equitable solution that “recognizes the historical imbalances between the high emitters and low emitters.”

To date, however, wealthy countries have under-promised and underdelivered. They have yet to reduce emissions to the extent necessary to avoid warming beyond 2°C, let alone 1.5°C. And, as President Akufo-Addo also mentioned, they have failed to honor their 2010 promise of USD100 billion per year to support developing countries’ responses to climate change. Tragically, the consequences will be felt by all for decades to come.

Ghana’s agency in the energy transition

Despite this compound injustice and these broken promises, Ghana’s future ultimately depends on its own leadership and effective planning. Ghana is still a resource-dependent country, with more than a quarter of its export earnings coming from oil and gas alone. Over the past decade, the oil sector has contributed around $6.5 billion of direct revenue to Ghana’s budget. Without a plan to respond to the global energy transition, a significant decline in oil revenues could plunge Ghana into a deep crisis.

Globally, oil and gas projects currently in the pipeline worth an estimated $400 billion run the risk of not breaking even. Against the backdrop of the global energy transition, GNPC’s ambitions of becoming an operator are risky.

At a minimum, the government should avoid making bad decisions—those that threaten the country's economic and fiscal outlook. But Ghana’s record does not inspire confidence. In the last decade, the government has allocated $2 billion to the Ghana National Petroleum Corporation (GNPC). These investments have financed equity stakes in exploration, development and general operations in oil-producing fields. NRGI’s Risky Bet report shows that, globally, oil and gas projects currently in the pipeline worth an estimated $400 billion run the risk of not breaking even. Against the backdrop of the global energy transition, GNPC’s ambitions of becoming an operator are risky.
 
In July 2021, Ghana’s Ministry of Energy and GNPC declared their intention to sink an additional $1.65 billion of public money into shares of Aker Energy's oil project—yet another “risky bet” given the increasing pace of the global energy transition, which would result in poor returns on such a large-scale investment. Furthermore, such a decision would divert precious capital that the government could invest in more socially beneficial programs such as education or cheaper and more diverse energy sources that could power development in Ghana. Thankfully, after severe criticism from civil society organizations, the public and industry oversight bodies in Ghana, the government paused its investment plans in the Aker shares.
 
No doubt, Ghana’s economic and fiscal outlook is uncertain. The 2018/19 oil licensing round remains unconcluded and oil production is projected to decline. International companies are redirecting their investments, and projects have been delayed. State oil revenues peaked in 2018, at 10 percent of total government revenue, and dropped to seven percent in 2020 due to the coronavirus pandemic. The ongoing war between Russia and Ukraine and the related global energy crisis now present huge uncertainties for the oil sector, including the prospect of a global recession.
 
The good news is that Ghana now has a golden opportunity to develop a comprehensive and context-specific plan for navigating the global energy transition. In response to COP26 and Ghanaian CSOs’ demands for a national energy transition policy, the government launched the National Energy Transition Committee (NETC) in December 2021. The committee is tasked with developing a national policy document on steps the country can take to successfully navigate global energy transition. The NETC is also tasked with conducting a nationwide consultation on Ghana’s energy transition. At the first regional forum organized by the Ministry of Energy on behalf of the NETC, Vice President Dr. Mahamudu Bawumia said the NETC’s nationwide consultations are key to success: “We need to develop plans and implement options that people can relate to.” He also stressed the importance of equal opportunities for all citizens to enjoy the benefits of the energy transition and ensure social justice in the process.

Essential elements for Ghana’s approach

The establishment of the NETC is an important and valuable first step. The following recommendations, if adopted, would put the committee on track to deliver a successful energy transition plan: 

• Include all voices. Ghana’s plan should be inclusive and leave no citizen behind. The plan should address how government will support local economies with relevant training, technology and finances to take advantage of the new opportunities in the transition. 
• Enlist experts. The NETC should engage sector experts working on the energy transition to help ensure that the plan is informed by data and technical analysis. 
• Promote open dialogue. Open and honest engagement between all relevant stakeholders will help build consensus and ownership around a transition pathway that is widely considered by citizens as viable and necessary. A shared understanding of the risks and opportunities of the energy transition is critical to agree on a shared strategy.
• Plan in harmony and coordination with existing policies. The energy transition plan should harmonize existing policy objectives and remedy the systemic inefficiencies in existing policy implementation.
• Improve governance of climate finance. The Ministry of Finance should spell out the role of international climate finance in energy transition planning and interrelate the energy transition plan with Ghana’s (conditional) nationally determined contributions under the Paris Agreement. Across the board, this requires building the state’s capacity to receive and deploy international climate finance.
• Take a critical and dynamic approach to energy options. The transition plans must address Ghana’s growing energy needs. Decisions about energy sources and related services should be based on analyzing different solutions over the long term, mindful of the likelihood that many factors (such as the competitiveness of renewables and gas) may change quickly over the coming decade. Accordingly, the NETC should review the role of fossil gas over the course of the transition—not assume from the outset that gas will be a constant.
• Assess implications for existing institutions. Ghana’s energy transition plan should consider the role of existing institutions such as GNPC in light of the long-term, macro pathway, rather than starting with assumptions about their purpose and role. Making the right investment decisions will require transparency and robust risk assessment.

Reactions to emissions agreements reached at COP26 earlier this month were decidedly mixed. But one theme that emerged clearly from the dialogue surrounding the negotiations was the need for a just and equitable energy transition.

Developing countries that rely upon, or have been hoping to exploit, endowments of fossil fuels are in a unique predicament. They face the prospect of stranded assets and are caught between the global need to reduce fossil fuel consumption and their ambitions to economically develop, especially amid the turmoil wrought by the coronavirus pandemic. “In this challenging context, developing new producer countries are trying to figure out how to finance both their development and energy transition ambitions,” said NRGI’s Amir Shafaie as he moderated an event convened by NRGI, the Commonwealth Secretariat and the New Producers Group.
 
And in her intervention at Carbon Tracker’s “Energy Transition and the Far-Reaching Implications,” NRGI’s Nafi Chinery observed that “countries like Ghana need climate finance for their transition, but also a plan for how to spend transparently and based on stakeholder consultation and consensus.”

(This was one of three steps to a just and equitable energy transition outlined during COP by NRGI’s Suneeta Kaimal and Aaron Sayne, who also called for a focus on anticorruption in critical mineral supply chains.)

Chinery suggested that “the Ghanaian government needs a comprehensive outlook on energy transition that accounts for all risks and opportunities. Earlier this year the government proposed borrowing up to $1.6 billion to buy back offshore oil blocks, but this was based on a poor valuation and was extremely risky.”

Some saw previous COPs’ focus on the consumption of fossil fuels as lopsided. “We should have put fossil fuel supply on the table back in Rio, instead of focusing solely on emissions,” said Niclas Hallstrom of the What Next Forum. At the same event, Carbon Tracker’s Mike Coffin warned that “more than 400 million people live in countries with more than 20 percent of government revenue at risk due to oil investment. Oil-dependent countries must diversify their economies immediately. And other countries should not become petrostates; they must not double down.”

Engaging with oil-dependent states on their needs and with state-owned oil companies on their ambitions is critical at this juncture, as NRGI experts had highlighted in their contributions on state oil companies to October’s Production Gap Report. To further enable targeted advocacy, during COP NRGI and IISD released a joint briefing, “National Oil Companies and Climate Change: Insights for Advocates,” authored by several experts on state oil producers. Key points include:

• National oil companies are national. Engaging with them means engaging with the ambitions of their countries’ governments and citizens.
• Interests cloud perception of risks. National oil companies and their governments don't fully appreciate the economic risks associated with their investments.
• Economic development matters. National oil companies won’t change without public pressure and international support to diversify their countries’ economies.
• National oil companies differ. Climate and development advocates should tailor their strategies to distinct types of national oil companies, which present varying opportunities and challenges for reform.
• Renewable energy can be an opportunity or an obstacle. National oil company investment in renewables can boost the energy transition and give NOCs a stake in it, but can be counter-productive in some cases.

NOCs face especially high expectations and responsibilities in countries that have been planning to move into petroleum production and where “governments are wrestling with what the global imperative to shift away from fossil fuels means for them,” as Shafaie said at the new producers event.
 
The unique situation faced by these countries was illustrated by Agnes Moensi-Sokowikromo, COP delegate and chief financial officer of Suriname’s NOC Staatsolie. She observed: “Suriname’s recent oil discoveries are opportunities to stabilize the economy. We need these revenues now for social programs and the development of sustainable sectors to diversify the economy. On the other hand, Suriname is one of the few carbon-negative countries.”
 
Reducing fossil fuel consumption and production remains an essential area for climate action. In tackling this global problem, policymakers and activists must also keep in mind the challenges resource-rich developing countries face in the energy transition. NRGI and its partners Chatham House and the Commonwealth Secretariat continue to develop these themes through the New Producers Group, meeting on the key takeaways from COP and their implications for the policy and implementation challenges facing low-income, low-emissions new petroleum producers. This will remain a key priority for NRGI in 2022.

When the curtain falls on COP26, a raft of action plans, pledges, compacts, coalitions and statements will have been announced. As “action-forcing moments,” these initiatives matter. But the choices made in countries around the world the other 50 weeks of the year, by actors ranging from national oil company officials and finance ministers to investors and activists, will equally determine the future for people and the planet.
 
Much of the spotlight in Glasgow is on promised cuts to fossil fuel consumption. Yet supply must also fall if we are to avoid catastrophe—the world needs to produce less oil, gas and coal starting now. Nearly two-thirds of already-discovered oil and gas would have to stay in the ground to keep within 1.5°C, and at current production levels, we’ll spend the global carbon budget by around 2030.
 
Each and every fossil fuel-producing country should support action on climate change for a simple reason: they are all vulnerable to it, and none more so than developing countries in the tropics. Yet an abrupt end to production would upend economic and political life in many of these countries, especially where leaders and citizens have staked their aspirations on getting more out of the ground.
 
At NRGI we believe that, at a minimum, wealthier, higher-emitting producers that have benefitted the most from extraction should wind down first and fastest. They should also make the deepest production cuts. Most lower-income producers have small carbon footprints, as well as pressing development and energy challenges. Pressuring them to wind down faster is economically unfair and morally unjustifiable.
 
The world cannot wait for wealthy nations to “lead” on fossil fuel production cuts. Many haven’t even acknowledged the limits of their moral authority on the topic, especially when toxic politics are stalling their own energy sector clean-ups. While the U.S., U.K., Canada and others just pledged to end financing for fossil fuel projects in low-income countries, G20 countries have poured $300 billion in new public money into fossil fuels since the pandemic started. Some countries—like the U.S., Canada and Australia—take the stage at events like COP to preach hard choices they won’t make for themselves. This sows mistrust and division, and complicates progress toward consensus.

In this tough political climate, we need solutions that don’t require a grand bargain. G20 countries must first honor their climate finance promises; supporting lower-income, fossil-dependent producing countries to transition to a post-oil, -gas or -coal economy is a critical complement. This includes investing in natural resource governance, which offers a road map to support quicker, fairer energy transitions for fossil fuel and mineral producers.
 
Here are three priorities that policy makers, activists and the international community must advance:
 
Increase dialogue and transparency around emissions and national economic risks from fossil fuel projects.
 
With a billion people already living in poverty in resource-rich developing countries, the stakes for adaptation and transition are high; yet fossil fuels represent one of the few avenues for much needed revenues for recovery and sustainable development. As a result, as demand wanes, some leaders will support costly, questionable handouts to extractives companies. Others with less altruistic aims will push through polluting, corrupt, possibly loss-making projects to keep their pockets lined.
 
Whatever their agendas, few politicians, in countries wealthy or poor, are likely to engineer fast, fair transitions by themselves. They will have to engage with—and be pushed by—activists, climate defenders, frontline communities, media, civic and trade organizations and research institutions, among others. If those actors are to play their critical roles, governments must first protect civic space and disclose more information on their energy transition plans. They should detail their future production goals, including what they’ll spend on subsidies and infrastructure. They should publish realistic scenarios for how transition could affect the health of their economies and the economics of particular fossil fuel projects. And they should be honest about the carbon-intensity of their production and reserves. This will help citizens hold leaders accountable, engage in more meaningful dialogue and shape new pathways for development.
 
International actors should also establish and implement strong and consistent standards. Extractives companies, for their part, must disclose more than the high-level information found now in most of their current climate risk disclosures, ESG metrics and sustainability reports. The data they publish should not just be for investors. Data should help stakeholders where the companies operate to understand how the companies’ transition plans—including divestment from specific projects—will impact national economic and development prospects. More broadly, fossil fuel companies can exacerbate governance and resource dependence risks in producing countries; climate disclosure standards must better and in a more nuanced fashion shed light on such risks. For this reason, norm-setting bodies must pay more attention to developing sector-specific standards, like the approach taken in the new Global Reporting Initiative Oil and Gas Standard.
 
Confront the risky bets that national oil companies are making.
 
The debate about how to cut supply cannot ignore national oil companies (NOCs), which produce over half of all oil and gas. Plans made by this “hidden half” of the industry matter at least as much as those of international oil companies, especially now that developing any new oil or gas fields conflicts with Paris goals. Leaders in resource-rich countries face a stark choice regarding new fossil fuel projects: investing public money in these projects will either undermine climate goals, or potentially cost their countries billions if climate goals are met.
 
Going forward, finance ministers and other economic decision-makers in countries with NOCs must reconsider whether letting NOCs grow is worth the risk. NOCs making risky bets in the oil and gas sector often do so by incurring largely hidden debt ultimately backed by government, meaning countries could be left responsible. Private oil and gas companies, for their part, should not try to pawn their risky assets onto state companies from poor countries; nor should they ask for tax breaks or other handouts.  
 
Strategies to push NOCs to produce less must recognize that NOCs vary greatly in their openness to change, their vulnerability to the energy transition, and what they add to their economies and world emissions. Campaigners need context-specific, pragmatic strategies that don’t require NOC bosses to care about climate change—for example, pushing an NOC (or its financial backers) to recognize when its ambitions don’t make economic sense. Success along those lines would be a boon for the climate fight since countries with more risk-averse views on new extraction would produce less. It would also give fossil fuel-producing countries a better shot at building diversified, resilient economies as demand for what they currently produce wanes.
 
Fight corruption and promote good governance in critical mineral supply chains.
 
Thus far, COP has largely overlooked the flip side of fossil fuels’ decline: the projected quadrupling of the demand for clean technology minerals such as cobalt, lithium and copper that are needed for transition. As demand spikes, expectations in the countries producing them have surged, as prospects for a new mineral boom raise hopes for revenues to boost development. But mineral booms have often disappointed in the past, and these countries could also face rampant corruption—which, in turn, could disrupt supply.
 
Production surges could also feed an ugly, unjust “race to the bottom” that benefits rich consumer nations and producer-country elites while leaving citizens in host countries to pay the costs with their ecosystems, living standards and lives. Many countries with sizeable reserves of critical minerals have already suffered instability and destruction from poorly governed mining—these include the Democratic Republic of the Congo (home to half of known cobalt reserves), Myanmar (large deposits of rare earth minerals) and Bolivia (some of the world’s largest undeveloped lithium deposits). The energy transition should offer citizens in places like these something other than fresh disappointment.
 
Schemes to track and certify mineral supplies, while important, won’t alone promote a mineral boom that’s both fast and fair. The governments, companies and investors leading supply chain initiatives must also support forward-looking anticorruption and governance standards—for instance, by publishing all payments and mining contracts, avoiding corruption-prone agents and intermediaries, and disclosing companies’ true owners. They should also help producer countries strengthen their laws and institutions and encourage them to take important steps like auditing their state-owned mining companies or opening license awards to outside scrutiny.
 
These three actions can help governments and citizens in producing countries make more informed choices about their energy futures that protect the planet, strengthen their economies, and create fairer societies. The global energy transition should offer such chances to all, not just to those who have already excessively benefitted at the expense of others.
 
 
Suneeta Kaimal is president and chief executive officer of the Natural Resource Governance Institute (NRGI). Aaron Sayne is a senior governance officer at NRGI.

As leaders from the public and private sectors debate how best to move away from fossil fuels toward green energy, they cannot ignore the needs of low- and middle-income resource-producing countries. During COP26, these public-facing events from NRGI and partners will explore ways to promote a just and inclusive transition.

Transition to Net Zero: Are Extractives-Dependent Economies Prepared for the Risks and Opportunities?
EITI, Chatham House
Thursday, 4 November, 10:30 am GMT
 
What Does an Equitable Energy Transition Mean for Extractive-based Developing and Emerging Economies?
OECD Development Centre, Carbon Tracker Initiative, Chatham House and the Commonwealth Secretariat
Friday, 5 November, 5:30 pm GMT
 
How Can Commonwealth Countries Accelerate Action to Reduce Methane Emissions in the Petroleum Sector?
The Commonwealth Secretariat, New Producers Group
Monday, 8 November, 2:30 PM GMT
 
Publication of National Oil Companies and Climate Change: Insights for Advocates
IISD, NRGI
Tuesday, 9 November

Energy Transition and Mining: Risks and Opportunities for Sub-Saharan African Countries
Publish What You Pay
Tuesday, 9 November, 9:30 am GMT
More information here
 
Climate Change and New Petroleum Producing Countries: Forging a New Path towards an Equitable and Just Energy Transition
New Producers Group, Commonwealth Secretariat and NRGI
Wednesday, 10 November, 2:30 pm GMT
Moderated by NRGI's Amir Shafaie
 
The Energy Transition and the Far-Reaching Implications
Carbon Tracker
Friday, 12 November, 3 pm GMT
Featuring NRGI’s Nafi Chinery

Last weekend leaders of the G7 group of wealthy countries recommitted to the value of democratic, open societies and declared lofty ambitions around the pandemic response, economic recovery, climate change and global infrastructure. But they left out a crucial element. Improved governance in resource-rich countries is essential for the billion people who live in poverty in countries abundant in oil, gas and minerals. Without it, they will be excluded from the “clean, green growth” needed for an effective global energy transition. Fortunately the major gatherings in the months ahead—notably the G7 interior ministers meeting in September and the COP26 climate summit in November—offer an opportunity for G7 governments to address the gap in their plans.

Here are five ways they can correct their course:
 
Wind down fossil fuel production and support low-income producer countries on governance fundamentals needed for the transition to clean energy
 
The G7 “advanced economies” have yet to fulfil their pledge to mobilize $100 billion in public or private funding to support energy transition in developing countries. Low-income resource-rich countries need support to transition to a future in which fossil fuel extraction delivers dramatically less income. At the same time, enabling them to decarbonize and diversify into renewables will require a major shift in incentives. G7 governments should:

• Promote a core set of government and company disclosure requirements on fossil fuel projects in all countries; this will enable the public to assess every project’s viability under different climate scenarios.
• Support accountability and economic planning capacity in low-income countries, to help align political incentives and capabilities around a sustainable path forward. G7 countries must fund the identification of options for lower-income countries that are more attractive than fossil fuel extraction.
• Lead by example and take more decisive action to wind down their own countries’ production of oil, gas and coal. It is unrealistic, and unfair, for wealthy countries to expect low-income countries to abandon the sector when G7 countries continue to license new petroleum fields.

 
Enact and support global standards on critical minerals governance
 
The G7 meeting and communiqué rightly touched upon the importance of resilience in the global supply chain of critical minerals from the perspective of economic recovery and jobs in their own countries, and called for sharing of best practice to address threats to supply. However, addressing governance and corruption risks in producing countries were missing from the G7 conclusions. Failing to address these risks will impact reliability of supplies and thereby threaten the clean energy transition which relies on increased use of minerals such as cobalt and lithium; it will also diminish the potential for citizens of producer countries to benefit from the extraction of these minerals. G7 governments should:

• Promote robust governance standards in mineral supply chain initiatives.
• Prioritize transparency, accountability, anticorruption and support to civil society in their assistance to low-income critical mineral producer countries.

 
Deploy the new infrastructure initiative with an emphasis on financial support, accountability and debt transparency
 
Last weekend the G7 announced a new approach to financing the significant infrastructure needs of low- and middle-income countries. The aim is to enable these countries to build back better post-pandemic, with a focus on quality infrastructure supporting “clean and green growth” based on the principles of transparency, sustainability and collaboration. (In recent decades, many resource-rich countries have financed infrastructure upgrades with opaque resource-backed loans, often from China.)
 
The initiative has been cast in the media, and will likely be viewed from low-income countries, as an attempt to compete with China, given the important role that the country has played in financing infrastructure in much of the world. Developing countries will likely view this increased interest and competition around infrastructure as positive. However, no announcements of specific financial support accompanied the G7’s plan.
 
In order for their new infrastructure initiative to succeed, the G7 governments should:

• Raise the bar on sovereign debt transparency, so that citizens can assess the impact of different financing options, including on resource-backed loans. Publication of key loan terms and loan agreements is essential. Greater transparency in direct G7 country lending will be important, as will a broader G7 push for transparency from private creditors. (In resource-producing countries, loans from commodity trading firms are often even more opaque than those from Chinese lenders and have destabilized whole economies.)
• Support borrower countries in adopting transparent debt approval and management processes.
• Follow through on the commitment to consult openly and collaborate with developing country governments, including as part of the new proposal development taskforce.
• Commit significant funding in the near term to get the initiative off the ground.

 
Include the concerns of resource-rich developing countries in global tax reforms
 
Tax avoidance and evasion are longstanding challenges for resource-producing countries. The G7 acknowledged the need to end the “40-year race to the bottom” on international tax—a welcome step. However, the G7 commitment doesn’t serve resource-rich developing countries. The proposed global minimum corporate tax rate of 15 percent is likely too low to prevent profit shifting in the extractive sector as producer country tax rates for the sector are often significantly higher. Developing countries are also unlikely to acquire much additional revenue from applying the 15 percent rate to profits booked in low-tax jurisdictions as the G7 is silent on who collects those, suggesting that most will go to multinational companies’ headquarters jurisdictions, as per an OECD proposal. The emphasis on allocating taxation rights to “market countries” (i.e., where goods or services are consumed) rather than producer countries also means that resource-rich countries may even end up with less revenue than they collect now unless the sector is exempted (as was previously agreed in the OECD context).
 
G7 governments should integrate the concerns of resource-rich developing countries into the OECD/G20 Inclusive Framework when these tax reforms are refined later this year.
 
Tackle fossil fuel sector corruption, state capture and kleptocracy—with a climate lens
 
Corruption is an overlooked threat to a successful energy transition. In fossil fuel-producing countries, corruption and narrow political agendas can mean that leaders invest more in oil, gas and coal projects; lavish these industries with subsidies; and block progress on greener energy—even when doing so runs counter to climate goals and citizens’ economic and environmental interests. Elites behind fossil fuel company lobbying and campaign donations can (often legally) influence or even direct energy and climate policy.
 
Half of the world’s oil is produced by 13 authoritarian countries, including several run by kleptocratic regimes with few incentives to move away from fossil fuel production. Meanwhile, as we have discussed above, the boom in demand for minerals required for clean energy could also trigger surges in corruption like those associated with past oil booms. G7 governments, including the G7 interior ministers meeting in September with their focus on strengthening international action against corruption and kleptocracies, should:

• Explicitly acknowledge the extractive sector as high-risk and recognize that strong action on anticorruption in fossil fuels and critical minerals is also good climate policy.
• Build on the commitment to greater beneficial ownership disclosure by requiring greater transparency in areas where the fossil fuel industry and governments interact, such as lobbying and government contracting, commodity trading, subsidy payments and national oil company finance.
• Seek fresh responses and modes of cooperation, including punishment for Western enablers who help kleptocrats to profit and thrive. 

Leaders of G7 countries must turn their rhetoric into reality in the months ahead; they can do so by urgently prioritizing the governance of fossil fuels and critical minerals in producer countries, and making concrete commitments as described here. The “green revolution” cannot otherwise succeed.
 
This post was written by a group of NRGI experts.