By Carl Wesselink, CDKN’s Africa Director.
Despite a tendency for people who do not live in Africa to see the continent as one giant, uniform, country, it is of course extremely diverse, not least in terms of its political structures and climate. When talking about climate compatible development in Africa, we need to be mindful of this diversity. There is no standard approach to climate adaptation or mitigation, and policy responses will vary across the continent according to different countries’ and regions’ capability to respond.
But while climate change policies are common in Africa, they exist in parallel to what policy-makers and business leaders perceive to be the ‘real’ economy, and are thus largely ignored. Most African countries are driving economic development, but are not doing so in a climate compatible way. Rather, most are progressing along a path that focuses on immediate economic gains, regardless of sustainability and climate change. With few exceptions, African countries have not begun the tough conversation they need to have about long-term economic trade-offs and climate compatible development.
The need for climate finance
The opportunity exists to ‘do development better’ and integrate climate considerations within mainstream economic decision-making, but increased finance is needed to drive this. Despite the diversity across Africa, one common aspect is African countries’ legitimate expectation that large amounts of finance will be provided to fund adaptation and mitigation actions. These might be for investments in land-use management, climate-smart agriculture or energy supply infrastructure, among other sectors.
This financial flow can come from the private sector, as illustrated recently by South Africa’s successfully commissioning 5,000 megawatt (MW) of renewable energy infrastructure. For the most part, however, public financial flows will be necessary for investments that avoid ‘business as usual’ development pathways that embed emissions and increase vulnerability to climate change.
In reality, the ‘carrot’ of climate finance is often an important driver – some say the primary driver – of the climate response in Africa. Crudely put, this political economy analysis explains the motivation to engage in climate change policies, including the submission of Intended Nationally Determined Contributions (INDCs) as a strategy to avoid being left out (politically and economically), rather than as a domestically championed, long-term economic blueprint.
However, a small group of African states is leading a shift in this narrative and embedding a long-term economic vision of sustainability and resilience in decision-making. Rwanda and Ethiopia are cases in point, where political leadership has helped integrate climate change into the domestic development agenda. In Rwanda, the Fund for Environment and Climate Change (known by its French acronym FONERWA) is an example of a financing mechanism that has been established (see Chapter 4). The fund now supports the implementation of a small but growing programme of development projects nationally. Even in countries where the vision around climate change is less well articulated politically, this agenda has started gaining traction. Entry points and champions exist at subnational levels, in devolved government structures and in specific sectors.
While climate compatible development is not yet uniformly supported, African decision-makers and political leaders are increasingly comfortable with a framing approach that:
- puts development first;
- acknowledges the importance of climate change in informing economic planning and decision-making (even in the short-term);
- focuses on avoiding future emissions and recognises a globally shared responsibility;
- invests in resilience and promotes adaptive capacity for an uncertain future climate.
In Africa, we have made progress around providing information and public engagement, but have yet to grapple with the trade-offs and decisions that drive action on climate change – and, for the most part, we lack the political will to use this awareness to drive the agenda. Africa has, on the whole, a complex, competing and largely unenforced and uncertain policy and regulatory space that, at best, allows for procrastination on the climate question.
Another challenge is engaging the private sector. If climate policy in Africa is largely about chasing public financial flows – and money is the incentive that drives action on climate change – we have to acknowledge that the public sector is not always good at spending money wisely. When it comes to driving change, we need to build an investment case that includes the public sector but also attracts private sector resources. To do so, we will have to identify the revenue streams (or at least related opportunities) that make private sector investment possible. In Kenya, for example, there is strong demand for generating the business case for action in the geothermal energy sector and in climate-smart agriculture. In response to this, CDKN will support Kenya to articulate its investment case for specific adaptation interventions.
There is a growing realisation among African decision-makers that climate change is costing – and will continue to cost – African economies and businesses. Importantly, this includes the realisation that climate compatible development is part of good development practice, and that governments and the private sector are beginning to spend significant portions of their budget on climate-related costs. These costs can be categorised as linked to adaptation, which opens the door to more nuanced access to climate finance to complement committed treasury spending. It also prompts the need for economy-wide analyses and decision-making, informed by long-term strategic options.
Climate compatible development, then, opens up the opportunity for a more sophisticated approach to development spending and resource mobilisation. Under this approach, government expenditure, private sector investment and climate finance play a mutually enforcing role in developing new pathways towards realising economic opportunities.
Challenges for CDKN in the future
CDKN’s programme in Africa moved from building evidence and raising awareness into supporting policy design. Now, the focus is on implementing those policies. So far, this has centred on building the institutional architecture and identifying priorities. It is now moving into gathering the evidence and carrying out the analysis necessary for making a convincing business case or investment proposal.
In particular, CDKN’s activities will focus on stakeholder engagement. This includes:
- building understanding and awareness of the impacts of climate change, and the role of climate compatible development in combating it;
- framing policies and building an evidence base for policy decisions;
- articulating practical approaches that garner local and subnational support;
- shifting from a single-ministry focus to government-wide awareness and action;
- helping to communicate Africa’s position on the global stage.