Despite African leaders and negotiators achieving some progress on key African priorities at COP26, ultimately the final outcomes were incommensurate with the scale of the continent’s needs.
Wins included keeping alive the aim to limit warming to 1.5 degrees, the call to at least double Adaptation finance by 2025, some progress on Article 6 (a potential opportunity for African carbon trading) and agreements on preventing deforestation, with a pledge of $1.5 billion dedicated to protecting the forests and peatlands of the Congo Basin in recognition of its importance as a global carbon sink. And a major South African deal to assist a ‘just’ transition away from coal was a further win.
However, there was little focus on nature-based solutions (NBS), lacklustre action on loss and damage, and no progress towards an agenda item on ‘special needs and circumstances for Africa’ which reflects the disagreement within the wider least-developed countries (LDC) group. As preparations begin for the ‘Africa’ COP27 in Egypt in November, urgent action is needed to build on Glasgow’s unfinished business.
Mobilizing green public and private finance
The vast shortfall in climate financing will be high on the agenda because Africa has never received anything like its fair share of ‘green’ funds despite needing $1.3 trillion a year, according to an announcement made at Glasgow by the African Development Bank (AfDB).
But while this should have been a wake-up call to the magnitude of the climate financing gap, Glasgow did not even deliver the long-promised $100 billion per year for developing countries, which is now deferred to 2023. So, although action to secure significantly higher pledges will continue, it is imperative progress is concurrently made on alternative sources of finance.
Beyond securing the funding envelope, African governments must expand institutional, technical, and financial capacity to access climate finance and to ensure it is accountable and concessional. Concurrently, reforms are needed among the international climate funds to improve the way climate finance is disbursed.
Mobilizing private sector investment is critical but the question remains whether it can be unlocked for Africa. COP26 saw institutions responsible for managing $130 trillion in private capital assets commit to the Glasgow Financial Alliance for Net Zero, but only a tiny proportion of global private capital is channeled to Africa so more needs to be done to direct funds to African investment opportunities.
The AfDB, World Bank, and other multilateral development banks (MDBs) have developed financial instruments intended to attract private financing – and yet the gap remains. These instruments need to be improved and MDBs must expediently deploy capital, de-risk projects, lower transaction costs, and ensure community buy-in and local benefits to successfully facilitate private capital at scale.
And there is a role for MDBs, philanthropic, and sovereign funds or initiatives such as the newly-launched Global Energy Alliance for People and Planet to collaborate by providing guarantees to minimize risks to investors.
Africa also represents only a tiny fraction of global issuance of green bonds and African states need credible transition plans to guide their issuance, act as market signals, and to build mechanisms such as local capacity for verification. The United Nations Economic Commission for Africa (UNECA) has launched a Liquidity and Sustainability Facility – creating a repo market for African bonds on par with international standards. This is designed to make African bonds – including green bonds – more attractive and more of these types of instruments to help investors participate in African markets are needed to diversify and increase African access to private capital.
Climate action and development: Towards a ‘just transition’
Just as long-term financial shortfalls need urgent green solutions, so too do more immediate development challenges. Africa is mired in an unsteady recovery from the economic recession caused by COVID-19, elevating the risk of debt unsustainability.
With more than 500 million people still living without access to electricity, the imperatives of development, jobs for the burgeoning youth population, and progress towards the Sustainable Development Goals (SDGs) are seen by African policymakers as core to climate mitigation and adaptation strategies.
In recent years, green development options have proliferated. There is a growing belief that climate resilience cannot be divorced from the development framework especially now that it is more accepted that green growth can be better and faster. The Africa Union’s Green Recovery Action Plan 2021-7 recognizes the logic of integrating Nationally Determined Contributions (NDCs) into national investment planning.
But while this may be widely accepted in principle, implementation on a continent as vast and diverse as Africa threatens to expose differences in interest, capacity, and real-world constraints. Progress was made at COP26 with the funding of a landmark agreement for ‘just transition’. The $8.5 billion agreement announced by South Africa to decarbonize its coal-based economy, create high-quality green jobs, and help vulnerable workers and communities is an example of African initiative by President Ramaphosa which offers a template for other countries, although the devil will be in the detail.
COP26 also broke new ground with an agreement on ending inefficient fossil fuel subsidies and phasing down unabated coal. This particular win for climate is challenging for certain African economies, such as Nigeria or Angola, where economic recovery and development remain heavily fossil-fuel reliant. Achieving net zero emissions by 2060 as President Buhari of Nigeria promised in Glasgow, while simultaneously achieving ‘just’ growth and progress towards the SDGs, requires imaginative, forward-looking, and practical policy to support the transition of Nigeria’s oil and gas sector and minimize stranded assets.
Concurrently, other African countries would gain from accelerating development of their own tangible ‘just transition’ proposals, alongside much-needed progress on domestic net-zero strategies and tackling constraints to external investment, such as better financial regulation and risk management.
Collective and individual action ahead of COP27
COP27 takes place in November 2022 and will highlight Africa’s realities, priorities, and climate-vulnerability so there is a need for much collective and individual action now. African institutions are vital to provide strategic and technical expertise, but MDBs and other financial institutions must play their part too by catalyzing private capital.
For individual countries, there is a need to inject real urgency and a systemic approach into cross-government climate change action, to enact long-term strategies for achieving net zero, and to update NDCs so they become pipelines of investment projects seeking investment partners with credible proposals.
Despite being extremely disappointed by Glasgow’s outcomes, an active African civil society has a key role in catalyzing political will and urgency because civic participation builds government accountability. Climate activists in developed countries, too, must activate the political will to open checkbooks on loss and damage for Africa.