Africa and Climate Finance – The state of the debate
23 Apr 2015 by Alice Ruhweza, Regional Team Leader for the Global Environment Finance Unit in Africa
In this blog series, our experts share their thoughts and lessons learned on key financing for development issues, in the run-up to the UN’s Financing for Development conference in July.
Africa is the region that has contributed the least to global greenhouse gas emissions but, along with Small Island Developing Countries, is among the most vulnerable to climate change. It is estimated that the cost of Africa's adaptation to climate change will be between $10-30 billion a year by 2030. This will not only cost governments billions of dollars, but threatens the lives and livelihoods of hundreds of millions of people.
Climate finance to Africa has been growing considerably. Recent data indicates that USD 2.3 billion has been approved for 453 projects and programs throughout Sub-Saharan Africa since 2003. However, only 45% of approved funding is delivered for adaptation measures.
In the run-up to the UN’s 3rd International Conference on Financing for Development (FfD), in Addis Ababa in July 2015, the UN’s regional commissions organized consultations aiming at providing inputs from a regional perspective. Some participants questioned whether climate finance should be part of the discussions, given that the UNFCCC is already focused on this issue, and that this will be one of the main agenda items in December’s climate negotiations in Paris. They stressed that climate finance should be additional to Official Development Aid (ODA) – and not included in the FfD – so it gets the attention it deserves.
However, other participants noted that climate finance and FFD are inextricably linked and should be discussed in the same fora. Climate change already threatens to reverse development gains. The future transformation agenda that Africa seeks to finance could also be undermined by climate change if we do not scale up financing for Africa to meet the costs of mitigation and adaptation to climate change. There is, therefore, a need to not only step up financing, but also ensure that these funds and investments go where they are needed, with a greater degree of transparency and predictability.
Furthermore, beyond ODA, we need to increase financing from domestic resources from both the public and private sector. At the OECD Global Forum on Financing for Development on April 1st, 2015, Kenya and Zambia shared experiences of using infrastructure and sovereign bonds to raise domestic resources. Other participants highlighted the potential of reforming tax systems -as well as looking at other options, such as carbon taxes, remittances, pension funds; green bonds and other innovative financing mechanisms. The Green Climate Fund also offers the opportunity to attract new sources of financing to support developing countries' national financing strategies.
Participants concluded that policy coherence between the FfD and UNFCCC discussions is key for Africa. The FfD Conference in Addis should send a strong political signal of support for a successful outcome to COP21 in Paris in December 2015, including stressing the need to successfully address the additional climate financing needs of Africa in a meaningful and effective manner.
Tell us what you think: Should climate change be an integral part of the debate on financing development?