By Lebogang Mulaisi
Despite the Paris Agreement which raised the level of ambition by developed countries contingent on the support provided by developed countries, we continue to see a decline in the delivery of public climate finance in real terms.
Developed countries have not met the $100 billion (R1.9 trillion) per year mobilisation goal by 2020 and have shown that this goal may potentially be met later this year, Minister of Fisheries, Forestry and the Environment, Barbara Creecy, underlined at the inaugural Africa Climate Summit held in Nairobi, Kenya.
In a call to action, leaders stressed the importance of decarbonising the global economy for equality and shared prosperity, and called for investment to promote the sustainable use of Africa’s natural assets for the continent’s transition to low carbon development and contribution to global decarbonisation.
The Africa summit acknowledged that climate change was the single greatest challenge facing humanity and the single biggest threat to all life on earth, with impacts such as prolonged droughts, devastating floods, wild and forest fires causing massive humanitarian crises impacting on economies, health, education, peace and security, among other risks.
The declaration proposed a new financing model responsive to Africa’s needs including debt restructuring and relief,and the development of a new Global Climate Finance Charter through the United Nations General Assembly and the COP processes by 2025.
“We call for a comprehensive and systemic response to the incipient debt crisis outside default frameworks to create the fiscal space that all developing countries need to finance development and climate action”, stated the Nairobi Declaration on Climate Change and Call to Action, adopted at the conclusion of the summit.
Numerous reports demonstrated the enormous climate change needs of developing countries and how present public climate finance flows were unforthcoming, inadequate and lacked in quality. It was reaffirmed that the current financial architecture perpetuates a reality where developing countries, those that have least contributed to the climate crisis, continue to bear climate costs within very limited fiscal space and constrained economies.
Africa has responded. African leaders, have re-echoed the erstwhile call for urgent action by developed countries to reduce carbon emissions, and proposed a new financing mechanism to restructure Africa’s crippling debt and unlock climate funding.
African countries need a new suite of financing instruments, with a set of favourable terms and conditions that are not merely debt generators, or our efforts and actions of mobilising the trillions of dollars needed for significantly scaled up climate action will be actions in futility.
An unprecedented quantum and creative mix of funding from the entire spectrum of capital sources will need to be mobilised and the financing of the social or just- elements of the transition. Practically this responsiveness will require scaling-up through interventions that help bridge the gap to commercial project viability, mitigate risks, finance first-of-its-kind projects and support technical aid work.
We need access to scaled-up new and additional grant and highly concessional finance which could be deployed effectively to create enabling environments by beginning to buy down risks and create new asset classes for clean investments that would allow for greater mobilization and using of public and private finance and hence access the illusive and unseen trillions.
In South Africa’s view, we must leapfrog the deployment of new financial instruments, particularly non-debt instruments, policy-based guarantees, and options that do not subject us to increasing sovereign indebtedness. These instruments should focus on the economic costs of transition risk by taking first loss risks on investments in technologies that are not yet commercially available.
Ahead of the United Nations General Assembly in a few days and COP 28 in the United Arab Emirates in December, we should recognise that Africa’s financial institutions are well placed in the evolving global climate finance landscape and call upon them to design solutions and mobilise private capital for climate action.
The Summit proposed a new financing architecture responsive to Africa’s needs including debt restructuring and relief and the development of a new Global Climate Finance Charter through the United Nations General Assembly and the COP processes by 2025.
The Nairobi Declaration was adopted to be the basis for Africa’s common position in the global climate change process to COP 28 and beyond, and also noted that the Africa Climate Summit should be established as a biennial event convened by the African Union and hosted by African Union Member states, “to set the continent’s new vision taking into consideration emerging global climate and development issues”.
The Africa Climate Summit wasa timely opportunity ahead of COP28 for the region to exchange lessons and share solutions on barriers overcome and opportunities, showcasing how Africa's industrial growth can be aligned with the climate goals of the Paris Agreement and drive economic progress while curbing environmental impacts.
Lebogang Mulaisi is the chief operating officer of the Presidential Climate Commission
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