Financing tops agenda at Africa Climate Summit
Baboki Kayawe | Monday September 18, 2023 06:00
Fourteen years ago, rich countries made a significant pledge to channel $100 billion a year to developing nations by 2020 to help them adapt to climate change and mitigate the situation. None of this finance has come.
Fast forward from Copenhagen, Denmark in 2009 to Sharm el-Sheikh, Egypt last year where the historic Loss and Damage Fund was agreed upon last year, and this financing mechanism is yet to be operationalised. Developing countries that have been able to negotiate funding from the rich nations have found the terms to be restrictive, either in terms of rates, the nature of funding, or the interventions for which the funds can be allocated.
Kenya, the host of the Africa Climate Summit, scored pledges worth $26 billion at the event, with a promise from the developed historic polluters to fulfil their financial obligations toward climate action. How much of these pledges will translate to actual funding and when, is anyone’s guess, analysts say.
Last year in Sharm el-Sheikh, Africans made their frustrations clear on the pace of financing of climate interventions by those nations most responsible for the world’s higher carbon emissions.
“There is actually a badge that has been going around written WTF, which means ‘Where is the Finance,’” United Nations Climate Change High-Level Champion's special advisor, Bogolo Kenewendo said during a social media discussion last year. “Instead of pledges, we are asking for signatures to be put down for the money.”
Due to a cruel twist of fate, poorer countries, particularly in Africa, are expected to bear the brunt of the mounting climate change disaster, despite contributing the least over the decades to the climactic factors that are causing the phenomenon.
Besides commitments to restraining the rise in global warming going forward, the richer nations whose development has led the planet to the crisis and keeps it on the brink even today, have also been asked to set aside funding to help regions such as Africa not only adapt and mitigate climate change but also transition to climate-friendly development agendas.
However, in both the global warming targets and the funding commitments, the industrialised world has continuously set itself targets and subsequently fallen short of these at each of the global climate conferences.
In Kenya, the Nairobi Declaration which emerged after the Summit was also roundly criticised for missing the mark.
The Declaration reads in part: “Uphold commitments to a fair accelerated process of phasing down unabated coal power and phase out of inefficient fossil fuel subsidies while providing targeted support to the poorest and most vulnerable in line with national circumstances and recognising the need for support towards a just transition.”
Mohammed Adow of Power Shift Africa, one of the African think tanks which aims at mobilising climate action, says the Summit failed to bring funding for Africa to adapt.
“Rather than providing real and public funding into African renewables and adaptation, rich countries pledged money to prop up carbon markets that have never worked, neither in Africa nor elsewhere. They are wasting money that should be spent on real solutions,” he said.
Economists argue that unless the global financial and trade architecture birthed in 1944 is dealt with, the climate crisis and its funding, cannot be systemically addressed. Essentially, the global inequalities that are entrenched by the international monetary system, global dollar dominance and others, are responsible not only for the higher carbon emissions but the lopsided funding dilemma Africans find themselves in.
At the Summit, Fadhel Kaboub, an Associate Professor of Economics at Denison University, Ohio, pointed out that Africa imports 85% of its food when it used to be the food basket of the world. He said the continent was energy deficient, something he described as a structural ‘trap’ considering that even the continent’s biggest exporters of fossil fuel like Nigeria import 100% of their gasoline.
Kaboub said the type of industrialisation that Africa is assigned is in the form of either extractive with no value-add or assembly line factory-type, which has resulted in structural trade deficits year after year.
“A trade deficit as we all know weakens our currencies relative to the dollar and the euro. “So everything we need to import the next morning like food, fuel and medicine for our people will be expensive in real terms. “We are literally importing inflation and our governments immediately step in with food and fuel subsidies for the most vulnerable. “Then we ask our central banks to artificially strengthen the exchange rate by borrowing dollars and that feeds the external debt trap,” he said.
Kaboub added: “We are not going to move forward on climate change unless we address investments in food sovereignty and agroecology, with investments in renewable energy sovereignty and with a new type of industrial policy that allows us to leverage the strategic resources that we have, especially strategic minerals. “We need a Pan African industrial policy where we can actually produce the energy infrastructure and leapfrog into a clean energy era, into hi-tech manufacturing with the resources that we have.”
Addressing African Heads of State and other participants after the adoption of the Nairobi Declaration, Kenyan President, William Ruto, demanded an even playing ground, saying this was a key response to climate change, a just and clean energy transition as well as facilitation of industrialisation.
“We demand a fair playing ground for our countries to access the investment needed to unlock their potential and translate it into opportunities. “We further demand just multilateral development finance architecture to liberate our economies to necessary financial resources,” he said.
What does Botswana’s climate profile look like and why does the Nairobi Declaration matter for the 2.3 million people who call this country home?
Botswana is considered highly vulnerable to climate variability and change due to its high dependence on rain-fed agriculture and natural resources. High levels of poverty, particularly in rural areas, and a low adaptive capacity to deal with these expected changes, worsen the country’s outlook.
Senior Climate Change consultant, Mackenzie Dove, writing for the World Bank, has noted that “primary challenges are centred around water resources availability, changing precipitation patterns and an increasing population".
In Nairobi, Environment, Natural Resources Conservation and Tourism minister, Philda Kereng, told Mmegi that the major take-home messages revolved around the urgent need for climate action, adaptation and resilience building, financial support, renewable energy transition and enhanced climate governance.
“Regarding Botswana’s Nationally Determined Commitment of reducing emissions by 15% by 2030, financial and technical support is required to assist Botswana in meeting its obligations,” she said. “When achieved, this will be an opportunity to create opportunities for local businesses for solar initiatives and there are opportunities in manufacturing, installation and maintenance of solar systems.”
Finance is paramount to investing in the green economy and harnessing the adaptation pathway, in particular the topical just transition. According to Kereng, financing Africa’s energy transition requires a mix of innovative financial models that would attract both public and private sector investments. This, she said, includes public-private partnerships, green bonds, blending finance, carbon markets and international finance.
“Model sustainability may vary depending on national policies, regulatory frameworks and the specific content of each African country. “It is therefore important to create an enabling environment with supportive policies, streamlined processes, and transparent governance to attract investments and effectively finance the energy transition in Africa,” she said.
As the minister responsible for the climate portfolio, though a crosscutting subject, Kereng believes climate change awareness has been growing in the country “although there is still work to be done to ensure widespread understanding and action”.
She cited the work done by government, NGOs and various stakeholders on the inclusion of climate change in Botswana’s National Environmental Education Strategy. “Enhancing awareness could lead to climate change gaining traction as an election campaign tool, which could mobilise support and highlight the importance of the issue,” Kereng said.
At the grassroots level where innovation happens, Kedumetse Liphi, the inventor of a solar backpack, whose uses include as a schoolbag, applauded a $1 billion commitment by the African Development Bank for African youth entrepreneurship.
Liphi said the funds would accelerate innovations such as the Chedza Backpack and many more which exemplify Africa’s resilience and adaptation in the face of the climate challenge.
“Funding opportunities such as that of the African Development Bank will build economies around clean energy production,” he said. “The Chedza solar backpack for instance uses solar energy, which is a clean and renewable source of electricity. “It directly contributes to climate change mitigation by reducing greenhouse gas emissions as it cuts on fossil fuels. “In rural African communities where access to electricity is limited or unreliable, the backpack provides the much-needed solution.”
The Summit, he said, enabled him to meet with international organisations and partners such as the International Renewable Energy Agency to enable innovation and technology transfer as that is what his invention needs to reach global heights.
A Natural Resources Conservationist and Climate Change Adaptation expert at the Okavango Research Institute, Professor Olga Kupika commended Africa for great policies on green growth.
However, she also decried funding and slow implementation.
According to Kupika, Africa needs to balance the talk and action, but at the moment, the continent is allowing developed economies to exploit its resources in a degrading manner in some areas.
As the world prepares for the next global climate conference in Dubai, to be held in late November, the Nairobi Summit has galvanised African countries to speak with one voice.
*Kayawe is a development communicator with an interest in science and climate change journalism. She has taken a keen interest in climate change as it is an existential threat to Africa and its developmental aspirations. Currently pursuing graduate studies in Natural Resources Management and Participatory Development Communication, Kayawe aims to be among the continent's science journalists making an impact in solution-based climate journalism