In Africa: A Climate Challenge Not Its Own Making, but its Own to Overcome
Global climate change policy differs from whatever standpoint one regards it. For example, China makes up 32% of global manufacturing production in the world, so its greenhouse gas emissions and fossil fuel usage are driven very much by its industries, as well as the remarkable increase in household incomes over the past few decades. In the US, fossil fuels made up 96% of energy use in the country even with the gains made in the availability of solar and wind power over the past decade, driven also by vehicle use and industry. Africa, on the other hand, does not use as much energy as any western economies or China, either at a household level or in terms of production. According to the World Resources Institute, Africa’s per capita emissions of carbon dioxide in the year 2000 were 0.8 metric tons per person, compared with a global figure of 3.9 tons per person. Africa had 42 vehicles for every 1,000 inhabitants, with a new car registration rate of 3.5% every year between 2005 and 2015, slower than Asia and Latin America (8.9% and 4.2% respectively). This means that the majority of the cars on the road emitting greenhouse gases are neither produced by nor are being driven by Africans.
Unlike more developed countries who are the key drivers of climate change, African countries have had their weak laws, corruption and rural poverty exploited by commercial interests to make money in a way that is ruinous to the environment and worsens climate change. Illegal logging that drives deforestation and loss of forest cover is just one example. European countries may have gone far in checking deforestation in the EU, but between 20% and 40% of industrial wood production valued at an estimated $10 billion a year is derived from illegal sources, and up to 20% finds its way into the EU and mostly from Africa. China is also a key driver in the illegal trade of rosewood in Nigeria and elsewhere in Africa, with 300,000 Chinese companies taking advantage of the lax policies in Africa to make over U.S.$25 billion in domestic revenues.
Indeed, the world’s most developed economies have historically lacked the goodwill to meaningfully address climate change. The United States, one of the major culprits with regards carbon emissions, has been especially ill-disposed to climate action since 2019, pulling out of the Paris Agreement and displaying reluctance to discuss climate change. The current US administration gets a lot of attention for its opposition to climate change policy, but they may just be the only one willing to be explicit in their objection. In 2019, ten years after the G20 Summit in Pittsburgh when the world’s most developed economies pledged to phase out subsidies to fossil fuels, these countries provided US$27.6 billion in domestic and international public finance, US$15.4 billion in fiscal support, and US$20.9 billion in state-owned enterprise (SOE) investments per year across the G20 to promote coal-fired power production. China is the world’s largest consumer of coal for power generation and industry, and pledged in 2014 to reduce coal consumption to 58% of total energy consumption or below by 2020. However, it continues to provide international public finance for coal mining and coal-fired power overseas (US$9.5 billion per year).
African countries have found much frustration at the negotiating tables with European countries with regards to getting them cut back on their emissions, says Oxfam Pan-Africa’s Food Security and Climate Change Lead Alvin Munyasia.
“The last COP negotiations in Madrid did not end well as there was a lot of frustration over impasses pertinent issues like carbon markets, climate induced loss and damage and financing for adaptation. It is also unfortunate that the deliberations watered down the spirit in which we achieved the Paris Agreement and a display of the division between large polluters, emerging polluters, and the most vulnerable countries.
In such conditions, how is the collective effort evolving and what is at stake for the African continent? Where we only contribute approx. 3 percent of carbon emissions yet we carry the brunt of climate change? Look at the impact of the cyclones in Mozambique, the locusts invasion in the Horn of Africa, the hunger in Ethiopia and Somalia, who is going to pay that climate debt?”
To strengthen their negotiation stance, African countries have had to embrace speaking with one voice. Over the past few decades, they have asked that developed countries provide sufficient and predictable financing, along with the transfer of technologies and capacity building. African countries coordinate their regional positions and national policies on climate change through the African Ministerial Conference on the Environment (AMCEN), whose secretariat is provided by the Nairobi-based UN Environment Programme. During the 2015 AU Summit, AMCEN was asked to develop, together with the African Group of Negotiators (AGN), a proposal to support Africa on adaptation. This led to the launch of the African Adaptation Initiative (AAI) the following year. The AU also established the Bureau of the African Group of Technical Negotiators to strengthen its negotiating structure. COP22 in Marrakech also signalled strong political leadership by African Heads of State, and led to the creation of three climate Commissions: the Congo Basin Commission, the Commission for the Sahel Region, and the Africa Island States Climate Commission. The AGN has played a key role in building a cohesive stance on issues of particular significance to the African continent. For example, it has been a strong advocate for the right of developing countries to develop and for the equal treatment between adaptation and mitigation efforts in the Paris Agreement, despite prior divisions on whether developing countries should play any role at all in mitigation.
Traditional climate finance comes from many different places, although all of these means are driven by funding provided from developed economies in some way. Besides the traditional international finance institutions like the World Bank and African Development Bank, there are financing entities dedicated to providing funding for climate change. Founded in 1992, the Green Environment Facility (GEF) provides grants to fund climate projects around the work. It has a UN-like structure of a General Assembly, a 32-member governing council and a Secretariat led by a Chief Executive Officer; and is funded by contributions from individual countries. The Green Climate Fund started following an agreement between developed countries following the Paris Agreement to fund climate adaptation and mitigation measures in the world’s poorer countries. The Green Climate Fund was established within the larger United Nations Financing Climate Change (UNFCC) program to provide financial assistance on climate adaptation and mitigation. African countries often have challenges accessing funds through these mechanisms.
The challenges that African countries have faced in accessing funding for climate finance are similar in some ways to the challenges they face accessing finance in other areas, but climate finance has its peculiarities. Where any country could engage with the World Bank or the International Monetary Fund about the possibility of securing a loan, African countries need to be accredited by these financing entities in order to access these funds, and that can be a long, arduous process, especially for low-income countries. Another issue with international climate finance is understanding what actually gets counted as climate finance. Oxfam’s 2018 Climate Finance Shadow Report shows that the current system of reporting on finance provides for a possible overestimation of between U.S$11 to 15 billion, because a great deal of funding noted as “climate finance” does not actually have climate change mitigation or adaptation as its explicit aim. The impact of the projects on climate change are not always explicitly measured as a result.
Africa is also at a disadvantage in climate finance, because the majority of the countries who access it are at least middle-income. Only 18% of the countries who access climate financing can be termed Least Developed Countries (LDCs), a category that 32 of 46 Sub-Saharan African countries share. Because of the difficulty in getting accredited to receive climate finance, African countries usually have to work with accredited entities like UN agencies, who provide climate finance funds as loans rather than grants, which means that accessing these funds will add to their debt profile. LDCs can scarcely afford more debt, because despite rising income levels the 48 countries in this category still make up 38% of the world’s extreme poor. Of the U.S.$48 billion in climate finance, only 23–27% of it was provided as grants as of 2018 and only 20% of the funds provided went to adaptation (as noted earlier, this could be overestimated). The sum of funds provided is also far below the U.S.$100 billion annual pledge made during COP24 in Katowice in 2008, although that pledge also included private sector investments as well.
George believes that climate finance leans towards mitigation and away from adaptation, because of opportunities for western countries to use climate financing to open new markets for private sector interests. This is similar to much of the international donor aid in developing countries, as donor organizations have spending limits after which certain assets procured have to be bought by companies from specific countries.
“Climate Change Adaptation is less profitable or bankable than mitigation,” George says. “The technical know-how is in mitigation, and the technology is owned by western companies so donors would be more willing to fund such projects because they can create business for western companies. This is much less so for adaptation, where you’re dealing with the impact that’s already been done and mostly just empowering local populations with skills and knowledge.”
The COVID-19 pandemic has added to the challenge of securing international funding for the African climate response. The financing space for climate change is diverse, but is largely driven by funding from developed economies. COVID-19 has made accessing these funds harder, because of the pandemic’s ruinous impact on OECD countries’ economies. The European Union reported 5.5m jobs lost, a 2.6% reduction in employment, for the second quarter of 2020 and the largest hike in unemployment since 1995. Gross Domestic Product also fell by 12.1% in the period. England has also plunged into the deepest recessions it has experienced since records began, with GDP slipping by 20.4% — the deepest drop of any western economy — more than double the 10.6% fall in the United States.
“It was always difficult to get the EU and other countries’ governments to honor their funding commitments, but it is especially difficult now,” George notes. “ We expect that now the EU especially will reduce their budgets and orient their funds towards COVID recovery. The advocacy in Europe has now moved away from financing climate change projects and towards making sure the economic recovery is green.”
Amidst the larger conversation about the efficacy and indeed availability of donor funding looms the 50 million dollar sized gap in climate change annual funding required to beat back the impact of climate change on the continent in the shape of technology and capacity building. While it is true that African countries are often not a bastion of good governance, it is also true that only 10% of the $17bn for climate change financing is made available for climate change adaptation between 2013 and 2016, and that only 5% of those funds went to African countries in the first place.
“According to the Organization for Economic Cooperation and Development (OECD), climate finance to Africa only reached U.S.$18.6 billion in 2017, corresponding to 26% of the total amount mobilized by developed countries,” shared Munyasia. “Also despite obligations like the NDCs in the Paris Agreement for example, parties are not legally bound to implement them and therefore issues like measuring reporting and verifications remain at the top of the political agenda and hence creates a lot of divisions and conflict in the negotiations.”
The economic impact of COVID in Africa has also affected African countries’ own individual ability to respond to climate change-related needs. Nation-wide lockdowns and shutdowns of the international airspace affect individual government’s ability to access revenue from tourism and travel, and global reductions in consumption with heightened unemployment in most countries have also hampered countries’ revenues from taxes of imported products. Countries are having to borrow, and the decline of currency values means that the debt is getting more and more expensive. This state of affairs has shifted many countries’ priorities, both in Europe and in Africa.
“Before the pandemic, Nigeria had started work to put in place systems to access the Green Climate Fund,” says George. “With NIRSAL, the Nigerian govt is trying to get accreditation for the Green Climate Fund. For now, you can only apply for direct access. This process started in 2019. It is a very long, complicated process that we arguably should have started long before. Even after you put the systems in place, getting funding accreditation is another challenge altogether.
There’s also a Nationally-Determined Contributions (NDC) Partnership to help to support countries on implementation of this,” she says, referencing the commitments countries under the Paris Agreement outlining how they each will put in place policies to address climate change in their countries. “Before the pandemic, Nigeria was recruiting for positions specifically to address that.”
It is worth noting that African countries’ ability to come together to jointly create policy does not always imply goodwill on implementation at national levels, and agriculture is a good example of this. The Comprehensive African Agricultural Development Plan (CAADP) to promote agriculture and reduce hunger was established in 2003, and by 2013 40 AU member states had signed the CAADP Compact, and two-thirds had formulated National Agricultural Investment Plans (NAIPs) for local adoption and national planning. However, in that time, the 10% funding commitment for agriculture in the signatory countries remained mostly elusive. There have been improvements in recognizing the importance of agriculture and willingness to invest in the sector, West Africa saw an increase in agricultural expenditure from 6.5% on average in 2014 to 2014, and 7.6% on average between 2014–2018, neither of which meet the 10% funding standard. In Nigeria, a major reason for this is the extent to which corruption and lack of transparency negatively impact service delivery, allowing for asymmetric information where stakeholders are not aware of what the government is doing, and a lack of involvement of smallholder farmers in budget development, wherein government at subnational and national levels develops sectoral budgets without involvement of key stakeholders. Oftentimes, state level government officials in Nigeria are not even aware of the national-level commitments, and as such have little buy-in on their realization. These are challenges of governance, not necessarily technical skills, and often repeat themselves across the board in other sectors. There is little reason to believe that such might not happen if Nigeria manages to access funds to address climate change. As countries work to increase their access for climate financing, it is just as important that they work on their climate governance to ensure their preparedness to work towards the necessary outcomes. Rwanda, Kenya and Uganda have all taken strong steps in that direction, having developed comprehensive plans for addressing climate change.
With the international finance streams, African countries have had to be innovative in their approach to fund climate projects, or at the very least re-think any gaps in political will that has hindered putting in place the needed structures to increase the chances of accessing climate finance. Nigeria is the first country on the continent to put in place Green Bonds. These are like typical bonds one may find in the financial market, except that these debt instruments are meant to provide private sector funds raised from the capital market for climate projects. Kenya also started its own Green Bonds in 2020. Chinma George says Environment, Social and Government (ESG) impact investments such as these are gaining ground.
“More investors are looking at diversifying their portfolio in this way. There’s an increase of such investments in the aviation sector, and globally we can see the financial market is gradually greening, with more divestment from fossil fuel projects.
There’s a few [Nigerian] federal government projects currently getting funding from this instrument. The first round of Bonds we did in Nigeria were not very transparent; if you want to subscribe as an individual they set the cap very high and it was not really publicized, so it was only a small group of high net-worth individuals that were involved. The second one, though, was more open and transparent. I believe that our Green Bonds can be further improved with a risk assessment included in the investment plans for the project for more transparency.”
Innovation and flexibility with regards to climate governance is not limited to securing funding. In Nigeria, for example, House of Representatives member and Chair of the House Committee on Climate Change Hon. Samuel Onuigbo introduced the Framework for Climate Change Bill to set up an agency on climate change with a technical leader committee made up of 18 or 19 ministries. The bill did not pass a second reading in the previous Assembly, but it has now been introduced. While most Nigerians will be wary of adding yet another agency to Nigeria’s already-bloated federal government, this idea is based on the limited capacity of the current Department of Climate Change domiciled in the Federal Ministry of Environment based on their territorial issues with and lack of buy-in from other Ministries. Having an agency with its own budget will aid in more transparency on how climate funds are being spent, and NIgeria can join other countries such as Kenya, Rwanda, Uganda and South Africa with dedicated entities for climate governance. This, in a country with several different policy documents addressing Climate Change, could be the milestone the country needs to push past its inertia on addressing climate resilience.
Munyasia believes that African countries are doing a lot, but can be doing much more to address climate change on the continent.
“We could deepen partnerships with supportive research institutions whose work could provide useful and timely inputs to the climate change negotiations. We can also improve on domestic resource mobilization to fund our own development by investing in essential services.
There are many challenges we face, but we have to look within us and do what needs to be done to address this for ourselves and the generations coming after us.”