BY STAFF REPORTER
Just like many global initiatives, funding is at the epicentre of efforts to solve the challenges of climate change. Especially for countries in the developing world, where finance is the worst challenge, a forum that addresses the funding issue is a top priority.
With COP27 less than two months away, Sameh Shoukry, the Egyptian Minister of Foreign Affairs and COP27 President- Designate said financing for climate action in Africa had not been forthcoming despite the pledges. “COP27,” he said, “is a chance to deliver”.
A Press Release from the Economic Commission for Africa (ECA) quoted Amina J Mohammed, Deputy-Secretary general of the United Nations as saying “We’re losing time in making promises a reality in the lives of people. Mobilise, Act. Invest”
She tweeted “Our people and planet depend on it.”
Recently Ministers who gathered in Cairo addressed several pressing issues, including the need to increase private sector finance, reduce the cost of green finance, debt-for-climate swaps and invest in sustainable infrastructure.
The United Nations Economic Commission for Africa (ECA) has calculated that climate change will cost an average of 5 percent of GDP for African countries by 2030, based on a scenario of two degrees of warming. If temperatures rise further, regions like the Sahel could lose up to 15 percent of GDP. African countries must meet their obligations under the Paris Agreement. But that needs financing.
The ECA said more funds would be required for this than have been mobilised so far. In addition, it stressed that the instruments to mobilise them needed to be made relevant and responsive to Africa’s specific circumstances.
Hanan Morsy, the ECA’s Deputy Executive Secretary, said amplifying Africa’s voice in global economic debates was critical for the fair and equitable distribution of climate finance. The continent had contributed the least to climate change, she said – less than 4 percent of global greenhouse gas emissions – but would be impacted the most and had one of the lowest adaptive capacities among all global regions.
At a panel discussion hosted by the ECA on swapping official debt for investment in climate resilience, Jean-Paul Adam, Director of the ECA’s Technology, Climate Change and Natural Resource Management Division, highlighted the need to scale up debt-for-nature swaps. They could, he said, raise capital to meet environmental challenges and support green growth.
The meeting discussed the need to create a new framework to link debt management to climate resilience goals and tasked ECA with developing a proposal for a Sustainable Sovereign Debt Hub to support countries to either refinance existing debt or issue new debt aligned with climate goals and using Key Performance Indicators. Ministers considered ways of refinancing existing debt for investing in nature through such a hub, saying goals that reflect the true value of natural capital were currently not well reflected in debt markets including sovereign debt markets.
To improve peer learning and foster a dialogue between governments and rating agencies, the ECA also held a workshop on how sovereign rating and the Liquidity and Sustainability Fund (LSF) could support countries’ green agenda.
There was immense interest in the Great Blue Wall Initiative as an opportunity for generating new investments in climate and nature. The Great Blue Wall aims to stimulate the development of Africa’s coastal and marine resources – the blue economy sector, which is estimated by the ECA to be worth 10 billion USD per year. It aims to raise the first regional blue bond. Somalia expressed an interest in joining the initiative and using the ECA’s Blue Economy Valuation Toolkit.
A joint communique issued at the end of the ministers’ meeting requested the ECA to present a proposal to establish a Sustainable Sovereign Debt Hub. It argued that such a hub could reduce the cost of capital for developing countries, it would support the opportunity to undertake debt for climate adaptation swaps and make sovereign debt markets responsive to climate change and nature restoration, particularly in countries facing financing challenges due to external shocks.
Closing the conference, Deputy Executive Secretary, Hanan Morsy, outlined that while African solutions need support, they wanted to design their responses: “African countries need support- and promises must be kept. But African countries are determined to also be the owners and drivers of their solutions. This is what we have seen at this ICF and we congratulate the Government of Egypt and the COP27 president-designate once again on this leadership.”
COP 27 is set to take place after two months in Sharm El Sheik, Egypt, it was learnt.
THE ETHIOPIAN HERALD WEDNESDAY 14 SEPTEMBER 2022
