Climate Finance and Strategic Leverage of DRC Case study
Democratic Republic of the Congo (DRC) attracted global opprobrium when it announced an auction for oil and gas leasing rights to the available block, covering 800,000 KM2. The auction was initially opened to large publicly traded and investor-owned oil and gas companies.
DRC allowed bids from carbon credit and cryptocurrency companies.
They did not hold this auction to tangibly bring about oil and gas exploration and cause an environmental catastrophe. Rather, this announcement was part of an attempt to leverage increased climate investment globally and reshape the global climate change conversation ahead of the annual United Nation global climate change summit (COP27).
DRC has not made good faith efforts to develop its oil and gas industry. The Research shows demonstrates that the Congolese hydrocarbon sector is best understood as a tool for corruption and rent extraction not as a viable industry for international investment. The DRC’s political elite are often not in office long enough to benefit from oil and gas investments, which can take a decade to show a profit.
State officials make money while they are in public office by selling time for meetings and about the sector where hydrocarbon sector can cost companies a lot of money. They work with a civil servant to obtain a map or land survey data about the DRC’s oil and gas reserves.
This auction is therefore best understood as an effort by the DRC to gain leverage vis-à-vis wealthier countries at COP27. This leverage is necessary to facilitate binding financial commitments from the global north. The potential inclusion of loss and damage on the COP27 agenda, the timing of the auction, and the DRC’s prominent role in climate meetings ahead of COP27 all point to the primary motivation of the DRC’s hydrocarbon auction: leverage in the international climate policy debate.
In international climate change policy, the concept of loss and damage refers to the idea that countries in the global north the primary producers of climate altering greenhouse gases should pay countries in the global south for the damages they suffer from climate changes. Poorer nations pushed for a dedicated loss and damage fund for countries most vulnerable to a changing climate in 2021 at COP26 in Glasgow, Scotland. Wealthier countries agreed to discuss the idea but delayed creating the Fund. Following COP26, sustained advocacy and research about the costs and impacts of climate change. Climate disasters across the globe in 2022, pushed the subject to the forefront of the 2022 conference agenda.
In Congo, the increased attention to loss and damage ahead of COP27 was an opportunity to highlight the potential costs of its climate vulnerabilities. DRC is ranked as the fifth smallest carbon emitter in the world while being the twelfth most climate change-vulnerable country and the fifth least prepared. Its oil and gas auction ahead of COP 27 drew international attention to the potential costs of not meeting Congolese needs and demands.
The timing of the auction indicates a calculated drive for leverage. The bidding opened six months ahead of COP27 and one month after the Congo that promised to host pre-conference meetings. As the host, Congo facilitated a conversation about loss and damages that would inform the negotiation agenda in Sharm el-Sheikh. At the pre-conference meeting, Environment Minister Eve Bazaiba Masudi said “the focus of talks would be how the richest and most industrialized [sic] nations should take financial responsibility for their role in the climate crisis.
The DRC has sought to increase its international leverage in more than just the fossil fuel sector. Since 2009, the DRC has participated in the Reducing Emissions from Deforestation and Forest Degradation (REDD+) process. Adopted at COP19 in 2013, REDD+ is a mechanism for assessing the impact forests have on climate change prevention and limiting deforestation. It includes a system for financially rewarding rainforest nations that curb deforestation and carbon emissions. At COP26, donor countries committed millions of US dollars over five years to REDD+ investments in the DRC through the Central African Forest Initiative (CAFI). “With its forests, water and mineral resources, the Democratic Republic of Congo is a genuine ‘Solution Country’ to the climate crisis,” Congolese President Felix Tshisekedi said after signing the CAFI agreement.
COP27 was a demonstration of both the Congo’s and the global south’s leverage in the climate policy debate. Eve Bazaiba Masudi flew to Sharm El-Sheikh, and with the Coalition for Rainforest Nations (CfRN), led a successful effort to enshrine the REDD+ mechanism in the final COP27 implementation plan worked with CfRN to ensure that poorer countries would be able to sell internationally vetted sovereign carbon credits to other countries and private companies—an effort the U.S opposed. This would make it more profitable for developing countries to protect their national ecosystems rather than exploiting them for logging, mineral and oil and gas extraction, or agriculture.