By Joshua Narh

Introduction

Due to several failed energy policies, the institutional and policy framework that shapes Africa’s energy sector as a whole is perceived to be falling short of expectations. How to reform the institutions involved in energy generation and distribution is of particular interest. Similarly, a greater understanding of how energy policies in countries with limited energy access can address the issue of energy poverty will be beneficial. Failed energy policies are a global phenomenon, but their impact on society, the environment, and the economy is more prevalent in emerging economies.
There are various perspectives on energy policy failure, particularly in public discourse and for economic interests. Benjamin Sovacool and Ira Martina Drupady of the Lee Kuan Yew School of Public Policy, National University of Singapore, stated unequivocally in their book Energy Access, Poverty, and Development: The Governance of Small-Scale Renewable Energy in Developing Asia that “economies continue to suffer from failed energy policies of the past.”
Several points may be made concerning energy policy. They form the basis of the principal issue I will discuss in this column. However, there has to be a common solution that the energy sector can work towards. The solution proposed here in the context of energy policy failure is to provide just outcomes for society, thereby achieving both the energy and climate goals. Here, we could advance the theory that in the future energy failure would mean any energy policy which does not deliver the 2030 energy and climate goals. Naturally, all policies involve some level of risk, and there is no guarantee that all will be successful. However, the failure of energy policy can be costly, and it is now necessary to deliver sustainable and decarbonized solutions that contribute toward a just transition to a low-carbon economy.
The hypothetical underpinnings in this piece are normative, but they are also interdisciplinary. By highlighting energy policy failures and examining the collapsed significant incentives, lost projects, mistakes, wrong paths, and bad decisions, all of which are policy failures in African energy policymaking. In addition, I present my definition of energy policy failure as well as the energy justice framework for evaluating this failure. Again, I explore the causes, unjust outcomes, and just solutions in terms of energy failure once more. Finally, in addition to the conclusions and policy implications, I will discuss the future shape of the debate on energy policy failure and its role in a just energy transition.

“Naturally, all policies involve some level of risk, and there is no guarantee that all will be successful. However, the failure of energy policy can be costly, and it is now necessary to deliver sustainable and decarbonized solutions that contribute toward a just transition to a low-carbon economy.

Energy Policy failure in Africa

Energy policy failure in Africa is complex and, to date, there is a lack of a clear definition as society advances to a decarbonized economy. Historically, most African countries have had inexpensive electricity generated by hydroelectric facilities. As the population has grown, electricity needs are being met by importing power (typically from fossil fuels). Currently, African nations need to develop new sources of electricity generation for economic development. Energy policy is evolving to decrease our dependence on foreign sources of energy,including fuels for electricity generation. Concerns about the impact of fossil fuels on greenhouse gas emissions and other environmental issues are being discussed.

Despite numerous public references to “failed,” “wrong,” or “unsuccessful” energy policies, as illustrated above, a study in this area is not as extensive as it should be. This is demonstrated by a review of research on energy policy failures. A further problem is the tendency to mix up policies, plans, programs, and projects, as well as the planning and implementation processes. This is especially important because energy policy failure can occur at any stage of the process, beginning with initial ideas and policy statements and progressing to substantive documents, materials, and acts. Real-world examples of collapsed incentives, lost projects, mistakes, wrong paths, and bad energy policy decisions in literature can be found by referring to the proposed types of policy failures in energy policymaking – and these are listed below in Table 1. This is by no means an exhaustive list, and there are numerous examples of failed energy projects, incentives, or ideas.
Table 1
Energy Policy failures across a selection of African Nations.

Failures in Energy Policy: Causes, Consequences, and Solutions

Unjust energy policy outcomes are caused by a variety of factors; including failures in procedural, distributive, restorative, recognition, and cosmopolitan energy justice. Inconsistency, hesitancy, a lack of political will, the wrong structure, a lack of coordination, a soft regulatory approach, no enforcement, deregulation, exclusion, and nationalism are among them. This is not an exhaustive list based on real-world examples. However, without going into too much detail, these causes, together with the various types of energy justice, allow us to categorise this issue.

Policy inconsistency, according to Prof. Nwankwo B.C., Dean, Faculty of Management Sciences, Kogi State University, is a key theme in procedural justice. It occurs when decision-makers’ priorities shift over time in such a way that what is preferred at one time is incompatible with what is preferred at another, such as when the preferences of a new government differ from those of its predecessor. As a result, certain policies, as well as related programs and initiatives, are either intentionally or unintentionally discarded (even though they are not removed from the regulatory system), while new ones are implemented or planned to be implemented. This results in a policy maze, a policy disorder in which “the right-hand does not know what the left hand is doing.”

Public policies, such as energy policy, must deal with extremely complex issues. As a result, first and foremost, the wrong organizational structure can lead to policy failure. When energy policy focuses on the wrong issues, it exacerbates unnecessary conflicts, creates “a mountain out of trivia,” and emphasises shortcomings and defects instead of strengths, which is a “guarantee of non-performance,” according to Peter F. Drucker, the most widely known and influential management thinker. It is related to procedural justice in this sense. However, the former is concerned with governance and the efficiency with which energy revenues are distributed, whereas the latter is concerned with governance and the efficiency with which energy revenues are distributed. This could result in no coherent policy being implemented as a result of a lack of coordination, as well as no distribution of energy benefits. Inherently, if no relevant agency is established, the same situation may occur (e.g., due to budget constraints or lack of relevant human resources). According to the OECD Science, Technology, and Industry Outlook 2012, the most common cause of governance failures is a lack of the latter.

Any policy that allows people to avoid taking responsibility is a policy failure. This would happen in the energy sector if an energy policy or plan, with its programs and projects, violated the “polluter pays” principle. This may occur, for example, when using a soft regulatory approach, or what Prof. D. Fisk refers to as “light-touch regulation.” This type of failure is common in most African countries, where there is a lack of a consistent legal framework for decommissioning offshore oil and gas installations, and guidelines cannot compensate for the absence of hard legislation. According to B. Tarekegne, a Michigan Technological University Energy & Resources researcher, “omission or insufficient protection of instruments in the electricity project planning process in Kenya and Mali could prevent project funding from safeguarding people from potential harm.” A failed energy policy is one that is not sufficiently inclusive. This is especially important in the energy transition, where “no one is left behind,” which means no one is intentionally excluded. This necessitates identifying various, broad groups of those who are impacted by the energy policy and its actions, and then addressing these groups in energy policy plans, programs, or projects. These stakeholders include vulnerable energy consumers, residents, and indigenous peoples.

Energy Policy Implications

A just energy policy is required for the future, and the world has been working toward this goal since the 2015 Paris Agreement. The United Nations COP26 in November 2021 has emphasised the importance of justice and not leaving anyone behind as countries involved set new and revised energy and climate targets. However, there is still a significant amount of work to be done to achieve this. Much depends on education, as well as the advancement of theory and practice in this field. This also applies to addressing energy policy failures, which, despite not being presented robustly in the literature to date, will become an important direction in the future development of energy policy analysis, transforming into research on energy policy failures.

Thanks to the human ability to learn from mistakes, this field would lead to a fairer energy policy, and thus a just energy transition, by allowing the detection of different categories of failure in all phases of energy policy-making, from preparation through execution to modification, suspension, or withdrawal. As a result, it will contribute to the advancement of energy justice literature as well as the just energy transition to net zero.

The various net-zero scenarios, with their milestones of 2030, 2040, 2050, or 2060 (as in the case of China), necessitate even more the establishment of a framework for energy policy failures. Naturally, the framework may evolve as a result of a variety of factors. However, the five-pillar foundation of energy policy failures, linked to procedural, distributive, restorative, recognition, and cosmopolitan justice, appears to be universal and longstanding.

It is also a call for energy experts and stakeholders to become even more actively involved in identifying, analysing, and describing energy policy failures. According to B. Hudson on institutional preconditions for policy success, “Policy failure plays an important role in informing society and its governments—often painfully—of how policies can lead to unintended consequences, how existing policies can be improved, and how to engage in more effective policymaking,” concluding that, unsurprisingly, lessons learned from them are always “ex-post observations.” Although “there are no simple lessons from retrospective analyses,” as according to B. Mittra and N. Lucas, on balancing markets and policy, Information from retrospective policy evaluations can help form decisions about future policies, such as how to implement and design them.

As a consequence, each of the lessons learned has the potential to have a positive influence, providing ideas that can turn a bad situation into a good one.

Joshua B. Narh is a the head of Legal & Ethics for the Prof. P.L.O. Lumumba Foundation. He is a director at Wingfield Group, an investment management company with a diversified interest in energy and resources (Oil & Gas, Metals & Mining, Power & Utilities), as well as Global Renewables. With a background in corporate governance, leadership, and law, his career spans several industries, including manufacturing, finance, and energy.

He is an ardent advocate of policy reform in the African energy industry.