Despite playing a minor role in the creation and perpetuation of the climate crisis many African countries now find themselves paying the price. For African countries to adapt and maintain their progress toward larger sustainable development goals, they will need more proactive and creative international support.
KINSHASA – Africa contributes almost nothing to global warming. Its 1.4 billion people – around 17% of the global population – are responsible for Less than 3% of the world’s total greenhouse-gas emissions. Data also suggest that the Congo River Basin forests alone are responsible for a large portion of the world’s total greenhouse-gas emissions. absorbEach year, 3% of global carbon dioxide emissions are caused by carbon-dioxide.
Africa is still facing the consequences of climate change. Already, Africa is facing increased frequency of climate-related disasters, hotter temperatures, erratic rain, and rising sea level. All of these can lead to human tragedy and social upheaval as well as economic disruption. Each new drought can lead to an increase in per capita annual growth over the medium term. ReceiptBy a percentage point.
As with all countries, policymakers in Africa need to embrace the inevitable global transition towards a low-carbon economy. They must not only pursue economic programs to improve living standards but also build resilience against climate shocks in countries that rely on rain-fed agriculture. This is why the African Union endorsed it Africa Adaptation Acceleration PlanThis calls for investments to build resilient infrastructure, climate-adaptive farming, digitalization, trade reforms, as well as a wider range of safety nets. These measures are 12 times more cost-effective that disaster relief, and they will also create jobs, raise incomes and improve living standards.
Climate action comes at a high price. This is in addition to the Sustainable Development Goals. At last month’s COP26 climate-change summit, African leaders Please indicateOver the next two decades, the region would require $1.3 trillion to adapt and mitigate climate change. The required sums will not be available to African countries, especially since the COVID-19 epidemic has constrained growth and driven up debt levels. The international community has failed to make any progress.
We need fresh ideas and new approaches. First, concessional and grant funding must be utilized more effectively. Multilateral climate banks, development banks, as well as other providers, should look for ways to streamline project approvals, while maintaining safeguards, to get money flowing to where it is most needed. The private sector can be helped by targeted interventions that address market problems or unblock bottlenecks. Increased digital connectivity, for example, enables entrepreneurs to offer crop insurance, weather services or real-time advice.
Second, we must expand new financing mechanisms within the public as well as private sectors. GreenAlthough bonds can be used for financing climate-related initiatives at relatively low rates of interest, Africa trails other regions in this important area. From 2007 to 2018, the region accounted for only around $2 billion in issuances – just 0.4% of the global market for green bonds.
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New programs connect finance directly with climate action in other places. Recently, the United Kingdom agreed to contribute $500 million to DRC (Democratic Republic of Congo) in order to curb climate change. forest loss. Norway has an agreement similar to that with Gabon. $150 million. A related idea is “Swaps of debt-for-climate.” Linking debt relief to climate action will require a large pool of swappable debt as well as standardized performance indicators and other related data.
Third, we should recognize that helping African governments access new sources of capital – including innovations in climate finance – depends heavily on reducing their credit- and country-risk profiles. On the domestic side, this means improving governance – especially through reforms in the procurement and management of public investment, public finances, and debt – and ensuring carefully costed and fiscally sustainable investment plans.
The International Monetary Fund is already playing an important role in helping national governments build their capacity to address climate challenges (the DRC is one of the first recipients of the IMF’s support for Climate-focused capacity building). And through the Fund’s Article IV surveillance, investors remain apprised of countries’ progress in implementing climate adaptation measures.
On the international side, standardized measures – such as a system of first-loss guarantees – could help to improve risk profiles and catalyze private financial flows. It would take care to ensure the right risk-sharing between the public and private sector. One promising model is the Seychelles’ $15 million “Blue bond” issuance in 2018. This instrument, which is guaranteed by the World Bank, finances ocean-based projects and helps lower the national debt through a lower interest rate.
These examples are just a few of the many actions that can be taken across Africa. Business as usual will cause massive disruptions in lives and livelihoods. However, properly designed and well-funded adaptation can ensure that development continues and that people are able to live, work and prosper in the new climate economy.
There is a new global willingness and ability to address the climate crisis, and seize opportunities related to it. COP26 generated new global agreements and created new opportunities for climate-related issues. bespoke dealsSuch as the $8.5 billion combination of grants and loans to South Africa to decarbonize its economy.
Moreover, following the recent $650 billion allocation of new special drawing rights (the IMF’s unit of account), the Fund has a green light to establish a new Resilience and Sustainability Trust. This facility will provide long-term, affordable financing for low- and moderate-income members as well as small states that undertake structural reforms to transform their economies or address climate risks.
These signs are encouraging. But, as the saying goes, “One swallow does not make a summer.” To tackle the climate crisis in Africa and put the continent on a new sustainable growth trajectory requires concerted efforts across national governments, the private sector, and the international community.
Time is not on our side. To make the most of this opportunity, we must all act now.