While Africa has long called for increased scale and accessibility of climate finance, these calls are now positioned within a broader effort for systemic reform of the global financial system.
COP28 will deliver the first comprehensive analysis and evaluation of the world’s progress on climate action, called the Global Stocktake. While climate action has been accelerating, the Global Stocktake is sure to reveal that action has been insufficient.
This comes at a time when Africa has secured even more avenues to raise its climate concerns; now with the African Union a permanent member of the G20 and with three seats each on the boards of the World Bank and International Monetary Fund. African negotiators also enter the global climate negotiations equipped with the Nairobi Declaration, the outcome of the first African Climate Summit, convened in Kenya in September this year. Last year, the African Union adopted the continent’s first climate strategy, the Climate Change and Resilient Development Strategy and Action Plan, and the Nairobi Declaration sets out pathways to see that strategy implemented.
This year’s multilateral climate negotiations coincide with heightened geopolitical volatility, particularly within the Middle East. A Republican-controlled US Congress, economic headwinds in China and the ongoing diplomatic and financial ramifications of the war in Ukraine have further dampened expectations of significant outcomes at COP28. Yet, there have also been recent developments that support a more optimistic view: negotiating parties have agreed that the Loss & Damage Fund will be hosted by the World Bank; China and the United States (the two largest carbon emitters) have agreed to work more closely on combating climate change, and this year’s G20 Summit included renewed commitments to addressing climate change and facilitating a just energy transition. Under the leadership of the United Arab Emirates, COP28 has an ambitious set of objectives that strategically align with Africa’s climate and development imperatives – fast tracking a just and equitable energy transition, fixing climate finance, placing nature, lives, and livelihoods at the heart of climate action, and ensuring the most inclusive COP yet.
Africa’s messaging in global climate negotiations has been clear and consistent – the region is ready to contribute to the global response to climate change, but given limited domestic resources, high levels of climate vulnerability, and its low share of global carbon emissions, Africa should be receiving significant support from international partners. It also insists that climate negotiations balance a focus on mitigation with commitments on adaptation and, increasingly, loss and damage.
While Africa has long called for increased scale and accessibility of climate finance, these calls are now positioned within a broader effort for systemic reform of the global financial system. As the biggest negotiating bloc at the United Nations Framework Convention on Climate Change (UNFCCC), Africa’s negotiators are in a strong position to push for such reform. While there are positive signs of this already, a key concern remains the huge climate financing gap for adaptation and the inability of the global financial system to address this gap. Africa’s leaders have made numerous calls for the reform of the global financial system, notably this year at the Paris Summit for a New Financing Pact, the Johannesburg XV BRICS Summit, the Africa Climate Summit and the UN General Assembly.
African countries need to build resilience to the impacts of climate change on their economies, especially with the growing intensity of climate shocks, but this is impossible with the financing gaps the continent faces. The push for a new “economic playbook” that recognises the needs of African countries and the shortfalls that they face under the current global financial architecture should therefore remain a key area of focus at COP28.
Some progress has been made on the Loss and Damage Fund, the key outcome for the developing world from COP27, which will now be hosted in the World Bank. While developing countries had been arguing that a new, independent entity should be established to host the Fund, they have conceded this position to ensure that countries do not enter COP28 deadlocked on this issue. There continues to be concern that, despite the enormous diplomatic efforts that have gone into the establishment of the Fund and ongoing negotiations around its operation, to date developed countries have not made firm financial commitments to the Fund. There are likely to be developments in this area at COP28, with the European Union, for example, signalling that it is ready to make “substantial commitments” to the Fund, yet questions remain around the scale and efficacy of funding for loss and damage.
Energy and the Just Transition
- There is an urgent need to accelerate a just transition to reduce carbon emissions and mitigate climate change. In this regard, Africa requires support in scaling the deployment of renewable energy technologies to enhance energy access and promote economic development.
- More financing packages such as the just energy transition partnerships should be pursued by development partners. Countries embarking on such processes must retain the agency to negotiate the societal compact required to implement such a transition.
- Transitioning to energy systems designed around renewable technologies will require a significant increase in the supply of critical minerals. In this regard, Africa should be supported in its ambition to move up the green technology value chain. Increased investment in Africa’s mineral stewardship capacity to build regional value chains and manage the social and environmental consequences of increased mineral extraction.
- Anticipatory governance approaches are required to create a new social contract that prioritises responsible mineral extraction and increased domestic processing of critical minerals.
- As the COVID-19 recovery process continues amidst other new global challenges, African countries need to further integrate climate change in their economic recovery and growth plans.
- The global financial system requires reforming, particularly with regards to equitable distribution of recovery funds during global crises.
- African governments should facilitate the development of local green finance mechanisms by establishing or augmenting domestic climate funds to capitalise green financing facilities and pool risk for on-lending to green innovators (including MSMEs). Lending for mitigation and adaptation is therefore made concessional and risk is shared between public and private players.
- Countries that continue to exploit their fossil fuel resources should put more of the proceeds into green sovereign Wealth Funds.
- African countries should make sure that carbon is priced and that this pricing is adequate and equitable.
- Climate finance for adaptation needs to be prioritised, specifically through the commitment by developed countries to double the collective provision of finance for adaptation by 2025, announced at COP26 in 2021.
- Multilateral Development Banks (MDBs) must be reformed through targeted initiatives that will help to alleviate Africa’s debt crisis, while increasing access and affordability of climate finance.
- Increase African countries’ access to climate finance through reforming the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs) quota system, while allowing for the re-channelling of SDRs through the African Development Bank (AfDB).
- The Loss and Damage Fund should be operationalised by COP28, with the intent to unlock large amounts of finance that can be deployed quickly to vulnerable countries at the onset of climate disasters.
- Support the development of an enabling regulatory and policy environment for enhanced private sector investments into renewable energy and climate-resilient initiatives.
- We must continue to push for progress on the Global Goal for Adaptation.
- African negotiators should advance Ecosystems-based Adaptation as a solution to climate change.
- Adaptation and mitigation technologies and response measures exist, it’s the political, economic and financial enablers that are missing.
- Africa should focus on mobilization of adaptation financing through global finance reform.
- Inclusion of community-based organisations as key implementors of climate policies
- Partnering with non-traditional actors like the private sector, cities and young innovators is really important to further the goals of the Paris Agreement. Policymakers cannot do it alone, this is truly a global challenge and therefore requires a collective response.
- Implementation and finance to support execution is really important.
- Adaptation, loss and damage and resilience building (even if carbon emissions stop today, we will be dealing with challenges of climate impacts for the next 30 years)
- Inclusive decision-making processes and engagement of youth, marginalised groups, and others
- Role of African countries, and other actors like community-based organisations and farmers in the Global Stocktake.
Research by Alex Benkenstein
The views expressed in this publication/article are those of the author/s and do not necessarily reflect the views of the South African Institute of International Affairs (SAIIA).