The clean energy transition is usually sold as a moral and climate imperative, built around emissions targets, international pledges and the language of a just transition. Yet some of the fastest shifts away from fossil fuels are happening in developing economies for a far more pragmatic reason: money. Saliem Fakir, founder and executive director of the African Climate Foundation, argues that affordability and energy security, rather than climate diplomacy, are doing much of the heavy lifting in countries such as Ethiopia, Pakistan and South Africa.
Why cost now drives the clean energy transition
Over the past decade, the price of solar panels, batteries and electric vehicles has fallen sharply, driven in large part by Chinese manufacturing scale. For many import-dependent economies, fossil fuels have become a drain on foreign currency and a source of chronic vulnerability to price shocks. In that context, switching to renewables looks less like a sacrifice made for the planet and more like a strategy for economic survival.
Fakir’s argument challenges the way climate policy is often designed. If structural and economic forces are what actually drive adoption, then policy should be built around those forces rather than relying primarily on persuasion and moral appeals.
This does not mean climate goals are irrelevant. International agreements still shape finance flows, technology standards and investor expectations. But for a finance minister facing a shrinking stock of foreign reserves, or a household confronting rising electricity bills, the immediate calculation is about cost and reliability. Where cleaner options win on those terms, adoption can outpace anything a policy target could achieve on its own.
Ethiopia’s electric vehicle gamble
Ethiopia offers the most striking example. In January 2024 the government banned imports of petrol and diesel vehicles with immediate effect. The justification was economic rather than environmental: the country was spending more than $5bn a year on imported fossil fuels, consuming a large share of its scarce foreign-exchange reserves.
The logic was reinforced by domestic power supply. Ethiopia is home to Africa’s largest hydroelectric project, the Grand Ethiopian Renaissance Dam, officially opened in September 2025, which generates surplus electricity. Paying hard currency for imported fuel made little sense when cheap domestic hydropower could charge vehicles instead. Chinese electric cars, including BYD models, quickly filled the gap, helped by tax exemptions, import duty waivers and the rising cost of second-hand combustion vehicles. Electric cars are now a common sight on the streets of Addis Ababa.
The case also highlights a broader point about trade. Cheaper Chinese technology has given lower-income countries access to clean alternatives at prices that would have been hard to imagine a decade ago, allowing them to leapfrog stages of development that wealthier economies passed through. Ethiopia’s policy was blunt, and an outright ban carries its own risks, including pressure on charging infrastructure, spare parts supply and after-sales servicing. But the underlying economics are clear.
Pakistan’s solar surge
Pakistan’s experience shows how external shocks and global trade dynamics can combine. The devastating 2022 floods left roughly a third of the country under water and caused more than $30bn in economic damage, straining public finances, cutting household incomes and weakening the state’s ability to run utilities. Rising energy costs then made diesel generation and grid power increasingly expensive.
At the same time, China had surplus solar panel production while US import restrictions limited one of its key markets. Households and businesses took advantage of discounted Chinese panels, and between December 2021 and December 2025 solar’s share of the country’s electricity generation rose five-fold. Fakir describes Pakistan as a late mover that benefited from cost advantages created elsewhere, a pattern other import-dependent economies may follow.
The rapid, largely bottom-up shift has also created new challenges. When customers who can afford panels generate their own power, utilities lose revenue while still carrying the fixed costs of the grid, which can push tariffs higher for those who remain connected. Managing that dynamic is now a policy priority in many markets experiencing similar solar booms.
South Africa and the affordability gap
South Africa has pursued formal emissions-reduction plans for decades, but Fakir argues it was an affordability crisis, rather than those plans, that ultimately drove widespread decarbonisation. Rising electricity costs pushed homes and businesses to install their own generation, and the country now has roughly eight gigawatts of rooftop solar.
The South African case also shows the limits of crisis-driven change. Lower-income households account for a smaller share of those installations because the upfront costs remain out of reach for many. Fakir stresses that market-led decarbonisation does not remove questions of fairness. Governments still need to improve affordability so that people of all incomes can participate, rather than being left behind on an increasingly costly grid.
Rethinking climate finance priorities
The policy lesson, Fakir argues, is to move beyond morally framed just-transition messaging and focus on systemic change. For philanthropists and governments, that means channelling money into grid capacity, energy storage and affordable financing mechanisms, which he believes will produce more durable results than funding for climate education and communications campaigns. Lowering energy bills and expanding universal electricity access can both accelerate decarbonisation and build the public support needed to sustain it. His full case is laid out in Fakir’s commentary on the economic path to climate finance.
For investors, the analysis points to where demand may be most resilient. Markets where the clean energy transition delivers immediate savings on fuel imports or electricity bills are likely to keep adopting clean technology regardless of shifts in international climate politics. Bottlenecks in transmission, storage and consumer finance, meanwhile, represent both constraints and opportunities for development lenders and private capital alike.
Conclusion
The world still needs to cut emissions to avoid dangerous warming, but the route there may look different from the one envisaged at global summits. The clean energy transition in Ethiopia, Pakistan and South Africa has been powered by economic self-interest, cheap technology and external pressure. Building policy around those realities, while ensuring poorer households are not left behind, may prove the most effective path to scaling green solutions across emerging economies.
