Private sector best placed to protect Africa’s environment

For almost a decade, Africa’s economic rise has been fuelled by the emergence of Eastern demand for the continent’s raw materials. Economic activity has brought a much needed revenue influx to Sub-Saharan Africa, but the patterns of investment – centred largely on mineral extraction – have done little to strengthen the region’s infrastructure and end the continent’s dependency on the export of minerals.

However, there are indications, some believe, that the structure of Sub-Saharan Africa’s economy is on the verge of a transformation, with the agricultural sector helping to end this over-reliance on mineral extraction.

“Because most of Africa’s [mining] potential is known, and tightly regulated, I think agriculture presents a huge opportunity,” said David Willers, Vice Chairman of the Business Council of Africa. “Africa could definitely become the breadbasket of the world, potentially.”

Agriculture has always maintained a significant position in Africa’s economic framework, but the growth of the sector – consisting mainly of the harvesting of commodities like coffee or cotton – has been limited by a number of factors.

Volatile commodity pricing
Not only is the value of these products heavily dependent on the extremely volatile world market; the lack of progress is also compounded by the fact that historically Africa’s commodities have not benefited the majority of the continent’s population and the Pan-African export market is under-developed. In other words, African governments make little or no profit from the commodity beyond its primary harvest.

“So often, you have the basic commodity roughly processed and exported to a company overseas, who would do the final beneficiation and convert it into something,” Willers explains. This is because African countries neither had the means to process the resources domestically nor an existing market through which to profit from regional trade.

Sugar, used to produce ethanol, is an example of a commodity that can be used to promote an economic model that is more beneficial to African countries, according to Mr Willers.

The sustainability challenge
Yet, like any commodity, expanding sugar production inevitably increases the ecological footprint that a country leaves. The challenge, says Mr Willers, is in developing a sustainable way for African countries to harvest sugar and produce ethanol.

“How can one ensure that the natural degradation caused by an active [ethanol] operation isn’t going to spoil the African landscape and atmosphere?” Willers enquires. “We definitely do not want, in Africa, to have Beijing-style pollution issues.”

In Africa, however, where most governments lack the resources to enforce strict environmental standards, Mr Willers says that any push for the development of a sustainable sugar industry will have to be market-driven.

One of the best examples of a market-driven effort to set environmental standards for commodity production is the Biofuels Policy and legislation created by the European Union.

Throughout the past decade, the EU has developed a series of strict standards for the biofuels that it imports. These standards, which include provisions ranging from how much CO2 an ethanol operation can produce to the amount of land a plantation uses, have had a substantial impact on ethanol production across the globe. EU member states are not permitted to import ethanol from operations that fail to meet strict EU standards. To gain access to this lucrative market, producers are forced to meet those standards.

The Bonsucro standard
A key organisation leading the effort to help sugarcane plantations meet the EU’s standards is Bonsucro, a global industry body for the sugar industry. In his role as former chairman and CEO of Bonsucro, Willers was instrumental in establishing the first metric standard for measuring the environmental impacts of an ethanol operation back in 2008. This is known as the Bonsucro Production Standard.

Three years later, the nonprofit trade organisation gained international recognition when the EU began including the Bonsucro Standard into its own standards for ethanol imports in 2011. Bonsucro’s environmental impact standards address global warming and the measurement of CO2 emmissions, biodiversity and the expansion of land use, and indirect land change.

In terms of biodiversity, the emphasis on land use implements standard requirements for new land expansion in line with EU requirements for imports of biofuels. Indirect land change policies aim to ensure that food production is not displaced.

“If you push onto land that was grazed by cattle and you plant sugarcane, what happens to the cattle? Do they get pushed onto other previously unexploited land?” Willers asks, thereby highlighting the complex questions raised by the production of biofuels.

Any country that wishes to export ethanol to the EU “must demonstrate that ethanol is being produced in a way that does not damage habitats or spoil virgin land – or that is not contributing to a displacement of food production.”

Bonsucro has worked primarily with ethanol operations in South America. However, Willers believes that using metric standards like the one established by Bonsucro, “is the way forward for environmental management on a continent like Africa.”

“I think the private sector has to take responsibility, so that when investments are made, they are made through the prism of an environmental standard,” says Willers. “That way, right from the start, you can make sure that the plants being opened will meet very tough and rigid environmental standards.”

Similar to marketing efforts like Fair-Trade labelling on products such as coffee and teas, which demonstrate that means of production have an impact on consumer behavior, Willers believes that the Bonsucro Standard will be attractive to potential ethanol producers in Africa looking to gain access to the European Market.

These environmental impact standards are expected to “encourage African governments to tighten up their own environmental legislation. I think you’re going to have a very creative partnership between market-led environmental initiatives and government authorities, who can make that happen through laws and legislation.”

On a broader scale, Mr Willers says that the African Union also has an interest in pushing African governments across the continent to enact stricter environmental regulations for ethanol production. “The AU is interested in the harmonisation of trade in Africa,” Willers believes. By encouraging African governments to establish uniform environmental standards for the sugarcane sector, Africa is expected to become more attractive for investment from the EU and other Western markets.

The production of biofuels may be controversial, but the key challenge is making better use of the land and ensuring that any ethanol production in Africa does not displace food production, and that it is done in a sustainable way.

Jeremy Kuper & Milton Lindsay 2013