Africa's Green Economy Summit’s Post

An investment of $2.5 trillion is necessary to meet Africa’s climate needs by 2030, but only 12% of this funding has been met so far. Recently, BCGers Katie Hill and Warren Chetty sat down with a panel of Africa’s leading journalists to discuss the crucial need of increasing private capital in climate sectors on the continent. With a tremendous urgency for solutions to remedy the impact of climate change in Africa, a considerable amount of capital from the private sector would greatly aid the continent in working towards its sustainability goals. Learn more about Africa’s climate finance gap and the challenges of risk and cost that are holding the necessary capital back here: https://lnkd.in/emtMMCyw

Can we really mobilize $1 trillion in the capital markets to frontload climate mitigation investments in poorer countries? 🌍 Yes, we can! And here is how. Ulrich Volz and I make a simple and practical proposal in this OECD Development Matters Blog. A Finance Facility against Clinate Change (F2C2) issues $100 bn of green bonds every year, collateralized with donor countries‘ future development aid flows. That allows us to cut emissions now, rather than at some unspecified distant point in the future. And that is exactly what is required if we want to keep any hope to stay within the 2~degree warming envelope. As it currently stands, we will miss this goal by a substantial margin. F2C2 gives us an instrument to kick the world’s emissions habit before it is too late. You doubt it can be done? Well, the #EU has demonstrated that the underlying financial concept works. Conceptually F2C2 is abcarbon copy of the similarly scaled #NGEU program.Similarly, #IFFIm before it has successfully accelerated funding for immunizations in poorer counties. In a way, F2C2 is financial plagiarism. But that’s good, because mirroring existing initiatives should give comfort that the proposal is not some lofty pie in the sky-idea concocted in an ivory tower. It works not only in theory, it works also in real life and it is fit for purpose. Inaction is not an option. Considering trends in future population developments, the lion‘s share of future GHG emissions growth will come from poorer countries. Many of which are currently struggling with a debt crisis, unable to fund the investments needed to do their bit to secure the Paris climate goals. Since the time profile of GHG emissions towards net zero is critical, #F2C2 is an instrument to bring forward emission reductions, but spread the cost over a long period of time.

Thinking out of the box. Not sure about the burden impose on future generations but we cannot still waiting for "perfect" solutions. thanks MARY OLSON for sharing. Question: Shall this be backed by ODA?, -why not the Paris Agreement USD100 billion pledge?, -Why not backed by the world bank debt payments?. "F2C2 effectively pushes the financial burden of fighting climate change to future generations of rich-country taxpayers. We consider this fair as they would be among the main beneficiaries if we were able to arrest global warming. But whatever our sense of intergenerational fairness may be, there are no good alternatives that would permit poor countries’ climate investments on the necessary scale. We need to use all practical solutions at our disposal, and F2C2 is such a financial solution. As the Paris climate objectives start to slip from our grasp, time is of the essence. We cannot afford to wait until public finances miraculously improve in rich and poor countries alike."

"Regional finance infrastructure for climate finance," writes Puja Das in Mint, quoting my insights on UN Trade and Development (UNCTAD)'s recent report, 'The New Collective Quantified Goal on Climate Finance'. It is encouraging to add a fresh perspective to the critical discussions on climate finance, emphasizing the need for regional cooperation and innovative financial solutions. As the world approaches pivotal forums such as UN Climate Change COP 29 in Azerbaijan and the 4th International Conference on Financing for Development in Spain in 2025, it is clear that ambitious targets alone are insufficient. Achieving real progress demands robust, actionable frameworks that translate climate finance goals into sustainable, measurable outcomes for the regions most affected by climate change. #climatefinance #COP29 #NCQGCF #development #financing #Climatejustice

“The @OECD has now confirmed that collectively developed countries provided & mobilized USD 115.9 billion in 2022 – Delivering on the $100 billion climate finance goal is a key step in supporting developing countries with their efforts to combat the #ClimateCrisis. This exceeds projections and shows improvement in adaptation & private finance mobilization. We collectively re-affirm our commitment to the goal of mobilizing jointly USD 100 billion per year to support ambitious climate action in developing countries through to 2025. We must also create an enabling environment to unlock investment for a green transformation of the global economy and energy systems. Read more in my joint open letter with Steven Guilbeault: Open Letter by Canada and Germany - An Update on the Delivery of the USD 100 billion Climate Finance Goal - Auswärtiges Amt (Federal Foreign Office) Germany” - Jennifer Morgan, State Secretary and Special Envoy for International Climate Action, Federal Foreign Office of Germany https://lnkd.in/eZeyD-ur

In the intense negotiations for more and better targeted climate finance (which always reaches a fever pitch during the COPs), it's easy to lose sight of the broader context. Africa receives about $30 billion in climate finance annually - that's about a third of what flows in through remittances and out through illicit financial flows. It has been estimated that African countries will spend $74 billion this year in servicing debt. It's not that African debt-to-GDP ratios are far beyond the global standard - but rather that Africa pays so much more for its debt, due to a risk premium that is fortunately now being widely challenged. One of the key messages out of the Africa Climate Summit last year was for this broader financial context to be integrated into climate finance discussions, including the debate on the reform of the global financial architecture. In a workshop last week on 'Reimagining Global Economic Governance: African and Global Perspectives', hosted by the Carnegie Endowment for International Peace and the South African Institute of International Affairs (SAIIA), with the support of William and Flora Hewlett Foundation, I was fortunate to have the opportunity to facilitate the session on 'Managing Climate Change and the Energy Transition'. We had incredibly insightfult contributions from our panelists, Amadou Hott (African Development Bank Group and Abla Abdel Latif (The Egyptian Center for Economic Studies (ECES)). This broader context featured prominently in our discussions. One question that came up was whether it even made sense to place such focus on climate finance and COP negotiations, since there was so much that needs to be addressed at a broader scale in terms of drawing in investments, addressing risk perceptions, dealing with debt, climate proofing public and private investment flows, etc etc etc. Where we landed was arguing that it was not a choice that we need to make - we need to be ambitious in both the 'climate diplomacy world' (if I can call it that) and in pursuing broader systemic change. It was a wonderful two days - kicking off with a very special and deeply considered address by none other than TREVOR A. MANUEL. Lots to consider that will be highly relevant to South African stakeholders at The Presidency of the Republic of South Africa , Department of International Relations and Cooperation, National Treasury of South Africa and other teams as South Africa develops its agenda for its upcoming presidency of the G20 in 2025. A huge thank you to all who were involved - looking forward to the report!

Framing Africa's Climate Finance Needs as Opportunities How can we frame Africa’s #climatefinance needs more as opportunities to mobilize resources and enhance negotiating positions in the discussions on the new climate finance goal? #SB60 #newcollectivequantifiedgoal The cost to implement Africa's Climate Response is estimated at $277 billion annually between 2020 and 2030. However, the total annual climate flows in Africa amount to only $29.5 billion (Source: CPI). With increasing levels of debt, African countries cannot effectively use domestic public resources to respond to the climate crisis and pursue their development agendas. We can only hope that the #ncqg will be substantial enough to bridge the growing financial gap for developing countries, including covering economic and non-economic costs for #lossanddamage. #climatechange #climateaction #climatecrisis #climatefinance #SB60 #unfccc #vulnerability https://lnkd.in/d-ixzFgd

“Climate finance is the means of implementation. It will ensure that countries will not only survive climate change but thrive as a nation with its dignity intact and its economic pathways going towards low carbon development.” With the fourth Meeting of the Board of the Fund responding to Loss and Damage (#FLD) currently being held in the Philippines, ICSC recalls the interview of Executive Director Angelo Kairos Dela Cruz in the November 14 broadcast of ABS-CBN News Channel's Dateline Philippines, where he stressed that beyond its definition, #ClimateFinance can translate to short-term recovery goals, and even long-term #ClimateAction strategies for climate-vulnerable, developing countries. “Developing nations have the right to access more support because you bear the brunt of something that you do not have anything to do with, or at the very least a very small contribution to the whole problem.” Watch: https://lnkd.in/gFTNm9ze 

In terms of the amount of climate finance, developed nations should be paying a minimum of $5 trillion per year to the Global South until 2050. These funds should be seen as a down payment on the broader climate debt owed and directed toward debt cancellation, grant provision and technology transfers – depending on the contributor’s capabilities. While some countries can cancel debt, others can provide grants. The rest can then focus on technology transfers. Still, the richest among them can contribute to the three categories. https://lnkd.in/d-Bmz6bp

Down To Earth shared #Climatefinance An equally important concern is whether climate finance would worsen the debt burden of developing countries which is already at a precarious level.  In 2023, public debt in developing countries reached $29 trillion, almost 30 per cent of the global total. Further, the share of private creditors in the total external public debt of developing countries was 61 per cent in 2022. Borrowing from private creditors on commercial terms is more expensive, but with concessional financing from multilateral and bilateral sources drying up, developing countries could end up worsening debt burdens while responding to their commitments to reduce global warming https://lnkd.in/gDJgr-hu