Climate change puts decades of development at risk in Africa: Continent needs market and financial mechanisms fit for purpose

Climate change threatens to undo decades of earnest effort to develop Africa unless sufficient investment can be mobilized to spur sustainable development and make the continent more resilient.  This was the message delivered at the 6th Africa Carbon Forum held July 2-4 to about 400 participants who gathered to share and learn the latest about market and financial opportunities associated with the international response to climate change  The forum was opened by the Minister of Environment and Natural Resources of Namibia, Uaheka Herunga, who stressed that the question now is not whether carbon markets will continue, but how they can be improved, and whether new mechanisms should be developed. In the context of the 2015 Paris agreement, the Minister urged participants to “send a strong message to governments around the world that the carbon market can make an important contribution to the objective of managing the challenge posed by climate change.”  “Climate change will force a steep ramping up of investment in Africa from both public and private sources to move the continent along a clean, secure, low-carbon path to development,” said Hugh Sealy, Chair of the Executive Board of the Clean Development Mechanism (CDM). “It’s crucial that the market and funding mechanisms on offer are right for Africa, and likewise that African governments provide a welcoming, reliable environment for investment.”  Countries are committed to crafting a comprehensive climate change agreement by the end of 2015 in Paris, to take effect in 2020. A big part of any agreement will have to address ways to mobilize the estimated USD 100 billion annually needed to mitigate climate change and adapt to its inevitable effects.  “The private sector and governments in Africa need to speak up now, loud and clear, to make sure an effective, ambitious agreement is reached in Paris, and to make sure that the market and funding instruments now taking shape are fit for Africa’s purpose,” said Dr. Sealy.  “The ACF provided a platform to assess both the challenges and the opportunities for mobilizing climate finance on the continent. We know that private sector investment in climate action is vital for transformational impact; and this is why the AfDB with its development partners is strongly committed to promoting investment along with improving the enabling environment for enhanced private sector engagement on the continent,” said Kurt Lonsway, Manager of the AfDB Environment and Climate Change Division. The AfDB has been a co-organizer of the ACF since the creation of the forum.  In addition to the CDM, participants in this year’s event considered a range of ways that countries and multilateral development banks intend to target their climate change investments, such as through approved Nationally Appropriate Mitigation Actions and through funds like the World Bank’s Carbon Initiative for Development, which uses the CDM’s monitoring, reporting and verification features to ensure results from energy-access projects in least developed countries.  The Africa Carbon Forum, which was preceded by a two-day training session of African CDM designated national authorities, was organized under the umbrella of the Nairobi Framework. Launched in 2006 by then UN Secretary-General Kofi Annan, the Nairobi Framework aims to assist developing countries, especially those in Sub-Saharan Africa, to improve their level of participation in the CDM.  The Framework partners are the United Nations Framework Convention on Climate Change (UNFCCC), the United Nations Environment Programme (UNEP) along with the UNEP Risø Centre, the International Emissions Trading Association (IETA), the United Nations Development Programme (UNDP), the World Bank and the African Development Bank (AfDB).  Quotes from partners: What the co-hosts say about Climate Finance in Africa  “Africa deserves to go down a clean, low-emitting path to development, one that delivers a good and healthy quality of life for the continent’s people. I think the carbon market and market-based tools like the Clean Development Mechanism have begun to show the great potential that market approaches and the evolving financial instruments can unleash.” – John Kilani, Director, Sustainable Development Mechanisms Programme, United Nations Framework Convention on Climate Change Secretariat  “Swift climate action is vital to avoid the worst effects of climate change. Countries in Africa see these destructive effects on their economies every day, threatening to roll back progress. As Africa grows, so it needs to grow clean and build lasting jobs. We won’t see the necessary investments in clean technologies without a robust price on carbon. This helps drive investments away from fossil fuels and towards lower carbon energy and transport solutions, and climate-smart agriculture. That’s why we are encouraging governments and companies to introduce a price on carbon.” – Rachel Kyte, World Bank Group Vice-President and Special Envoy for Climate Change  “Again this year the Africa Carbon Forum has shown itself to be the place to be to discuss climate finance and mitigation opportunities on the continent. The last days have clearly shown that there is a deep-felt wish to embark on a low-carbon development path. Further, the ACF also reveals that the international community must build on the success of current financial instruments, institutional experiences and national capacities to create new and successful financial instruments, ones that will benefit the continent further and promote sustainable, low-carbon development through nationally prioritized mitigation actions.” – John Christensen, Head of UNEP DTU, formerly UNEP Risø Centre   “As governments prepare for the Paris Climate Summit in 2015, the Africa Carbon Forum in Windhoek took stock of the important new developments in carbon markets and climate finance – and what they mean for Africa. Businesses, government and financial institutions explored how to leverage private investment with innovative models that blend voluntary markets, climate financing structures and CDM. It was encouraging to see a strong interest in continuing the progress of carbon market solutions for Africa.” – Dirk Forrister, President and CEO of IETA    ]]>