Green Growth Diagnostics for Africa

This project seeks to develop a new Green Growth Diagnostics methodology and apply it to two African countries: Kenya and Ghana. These countries are the research hubs of East and West Africa and we believe that they offer a good opportunity to test our methodology in advance to their wider application to other African countries and beyond the African continent.
The original growth diagnostics methodology was developed by Haussmann et al (2004) to identify the key constraints holding back economic growth from its full potential. Their approach was driven by the needs of policymakers facing the dilemma that most problems have multiple causes, but governments cannot tackle all of them at once, given limitations in their financial and executive capacity. This gave rise to the idea of concentrating these limited resources on the binding constraint, which would be identified going through a tool conceptualised as a decision tree. The proponents of the original growth diagnostics also realised that this binding constraint varies between countries and we would argue between sectors. The central point of the original growth diagnostics method was that it offered researchers and policy makers a way of identifying priority in analysis and policy; and finding solutions which take into account local conditions.
The same rationale applies to our proposed Green Growth Diagnostic method. We build on the original approach but adapt it in four ways: 1. Applying it to the energy sector; 2. Taking into account potential knock-on effects on the economy and 3. the political economy when going from diagnostics to therapeutics; and 4. Working out the distributional consequences. Since each step takes the project into un(der)explored territory, it is built around five research questions and corresponding methodologically distinct work packages.
Our four research questions are: 1. What are the binding constraints for investment in economically viable renewable energy?; 2.Which policies can more effectively target different binding constraints?; 3. Who obstructs/drives the adoption of specific sustainable energy policies?; 4. What would be the macroeconomic impacts of an increase in renewable energy investment/capacity, and the reforms needed to bring this increase about? and 5. Under what circumstances increased on-grid renewable energy capacity translates into increased access to and increased reliability of electricity supply in developing countries?
We use several methodologies to deal with these questions. Firstly, we create a diagnostics tool that provides a priority ranking of the most binding constraints for the uptake of economically viable renewable energy. Engineering, economic, financial and technological expertise is required to develop this tool.
Second, we test the macroeconomic and political feasibility of the proposed set of policies for our two case studies in Kenya and Ghana. Two distinct methodologies are used: Computable General Equilibrium (CGE) Modelling and political economy analysis. Purpose-built dynamic CGE models for Ghana and Kenya simulate the prospective medium-run growth and distributional implications associated with the policy measures identified by application of the GGD tool. The political economy analysis identifies the actors, alignments of interests or alliances that obstruct or drive the adoption of specific sustainable energy policies in Kenya and Ghana. This requires continuous and iterative discussions with the key actors.
Finally, power system analysis methods are applied to understand the distributional impacts of increased renewable energy capacity. Metrics will be developed to quantify the impact that increased on-grid renewable energy capacity has on access and reliability of electricity for final users in developing countries.
The project responds to the specific theme of this call "Energy Systems and de-centralised use".

Four groups of users will benefit from this research: a) the private sector, in particular project developers, financial institutions, utilities and the supply chain with activities in developing countries; b) official and policymakers in African countries and particularly in Kenya and Ghana; c) sections of bilateral donor and multilateral agencies responsible for low carbon development and energy access; and d) the energy and development research community.
The first two groups of users will benefit from our research through an improved common understanding of the key challenges to be addressed to increase the levels of private investment in renewable energy. This common understanding can set the founding ground for effective public-private relationships in Kenya and Ghana and more generally in the African continent. We will reach these two groups through continuous and iterative discussions with the key actors, that will be essential to gather data for our research; two large conferences in Nairobi and Accra hosted by KIPPRA and ISSER; policy briefs and for those actors operating internationally, through a side event in the framework of the Conference of the Parties of the UNFCCC. Our partners in KIPPRA and ISSER are exceptionally well placed to influence policymakers in their respective countries and have a long history doing so. Our Kenyan team is reinforced by Ashington Ngigi, member of the Kenyan Renewable Energy Association and with a strong private sector network. Our Southern partners are also used to participating in radio and television panel discussions showing the findings of their research and we expect this will also be the case in this project.
Our research will benefit the donor community, and particularly those agencies contributing to international climate finance pledges, by supporting a more efficient allocation of their resources. Our methodology provides a roadmap to identify the constraints that need to be tackled before climate finance can be effective in achieving emission reductions through increased investment in clean energy. International funders can encourage national beneficiaries to tackle the necessary reforms. Our project will also benefit national donors by providing them metrics to assess the impact of their contributions to on-grid renewable energy capacity on access and reliability of electricity for final users in developing countries. We will reach this group through policy briefs; the two conferences to be held in Ghana and Kenya; a side event in the UNFCCC COP, which assembles all the relevant agencies; and presentations to regional and international development agencies.
Finally, the research community will benefit from our project through an innovative application of existing methods from different disciplines to tackle a new challenge: inclusive green growth. We will influence them through the publications, academic conferences and website set out in the Impact Plan.
We will monitor our influence through through: i) the measurement of conferences and blog participation, media hits in the UK, Ghana and Kenya and website downloads; ii) the quality of peer-reviewed journals where the research ouputs will be published, (iii) the involvement of the research team in policy intervention programmes at national and international levels, (iv) invitations issued to team members for participation in external academic and policy seminars and conferences, (v) the use of project outcomes and results in guidelines for renewable energy policy agendas elsewhere; (vi) the level of demand for additional studies and research of green growth diagnostics in additional countries; (vii) evidence of influence in policy statements and documents, media coverage and blog-postings, as shown by the use of the "Green Growth Diagnostics" terminology or citations of our research. A final evaluation report will be produced on the impact of the project employing these data.