Africa Calls for Climate Finance Pledges to be Met and Mulls Carbon Tax Solution to Bridge Gap

09/12/2011
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While Africa has long battled against the poverty that has scarred much of the continent for decades, the combat against climate change is relatively new.  But they are not separate struggles. That was the idea that dominated a debate on climate finance at the climate change conference, or COP 17, in Durban.

The president of the African Development Bank, Donald Kaberuka, underlined this point, saying: “We have two challenges, fighting global poverty and fighting climate change. Fail one, fail the other.”

Financing is at the heart of the climate change debate, particularly for Africa. More than anything, what is needed is more investment, for Africa and for the world.

Adaptation is Africa’s most pressing priority, and for this it needs USD30 billion in 2015 and more thereafter. “The challenge we need to overcome is that there are international mechanisms put in place and promises that were made that are not bearing fruit,” said Henri Djombo, Minister of Forestry, Environment and Sustainable Development for the Republic of Congo.

Under the Cancun agreement, developed countries committed to providing new and additional resources through international institutions.  The figure was USD 30 billion for the finance period 2010 to 2012.

Among the billions of climate funds pledged, only a small percentage is reaching Africa.  Africa has received about 12 percent of funding for adaptation, compared to Asia and Latin America, which received 40 percent and 25 percent respectively.

And funding for adaptation makes up only five percent of the global funding for climate change, making those funds woefully inadequate for Africa’s needs.

African leaders have made a call for a certain share of the funds to be ring-fenced for Africa, and placed under the care of the African Development Bank.

Kaberuka acknowledged the call, saying, “if it’s the will and the wish of the negotiators, some of that money should go through the African Development Bank. We have the vehicle, we have the knowledge, the experience and the track record to work with the countries to ensure that those funds are used optimally.”

According to by Benito Mueller, climate policy director at Oxford University, reform of the financial mechanism has been considered. For example, the idea of direct access to the Green Climate Fund is a consequence of studies that have shown that systems need to be decentralised and decision making dissolved.

“National trust funds are actually being created as we speak,” said Mueller. “This devolution of decision making is the best way of ensuring mainstreaming into domestic policy and the best way that we can ensure that the money is being used efficiently.”

However, the available funding is not nearly enough. Kaberuka said that the African Development Bank has made concrete proposals on how the money could be raised.  However, while the process is certainly technically feasible, it still requires political leadership.

One of the biggest potential funding sources is the carbon taxation, on shipping and aviation, for example.

Kaberuka points out that those funds could then be used for a number of things, including mitigation technology and adaptation.  Carbon taxation would raise significant revenues, if developed countries decided to introduce it, Kaberuka affirmed.

Pravin Gordhan, the South African finance minister, said such initiatives might be in the pipeline. He was particularly positive about the prospects of a bunker tax on shipping. “The ball is beginning to role, and then we could have different sources of funding for the Green Climate Fund,” he said.

Barbara Buchner, of the Climate Policy Initiative and co-author of the 2011 report Landscape of Climate Finance says there are also many valuable experiences out there and that creating an enabling environment and investor confidence in Africa could help more money flow into Africa.

All parties agreed it is critical the Kyoto Protocol be kept alive. “We cannot allow Kyoto to be buried on African soil,” said Janneh. A framework was needed.

Gordhan says that he felt confident this would happen, and that African ministers will continue to support the Green Climate Fund and initiatives like those of the African Development Bank.

As for COP 17, Kaberuka says “I cannot imagine a bigger success than achieving something on Kyoto, and something on climate finance.”