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Why climate cash could make or break COP27 | Climate Crisis

Why climate cash could make or break COP27 | Climate Crisis

International climate change conferences are big business – they must be built on strong pillars of action, not just warm words and hot air. Starting Sunday, the UN climate meeting in Egypt, COP27, will be no different. And no pillar is more important to Africa than international climate finance.

This year’s meeting of world leaders has been dubbed “COP Africa”, not because the continent plays the role of host, but because it is increasingly bearing many of the greatest blows from the effects of climate change while having done the least to cause the crisis. Africa emits only about three percent of global carbon dioxide emissions. This year, we must see African priorities at the heart of global negotiations.

Previous pledges by developed countries, the biggest carbon emitters, to channel $100 billion one year by 2020 to help vulnerable countries adapt to climate change have not been achieved.

Yet even if the rich countries honored their commitments, that would not be enough at all. Africa alone faces a climate finance gap of about $108 billion every year, according to the African Development Bank, amid growing economic shocks from the COVID-19 pandemic and the war in Ukraine. Rich nations must step up their efforts.

But here’s the biggest problem: the very structure of global climate finance is currently loaded against the countries that need the most help. Polluters are rewarded. Meanwhile, the more vulnerable a country is, the less likely it is to receive support.

Dirty truth about climate finance

Most financial aid is promised in the form of loans, shackling some of the world’s poorest countries with crippling debt. According new research from Oxfam, Senegal, which is among the most climate-vulnerable countries in the world, has so far received 85% of its climate finance in the form of debt. This – even though the West African nation is at moderate risk of falling into debt distress and has a debt amounting to 62% of its gross national income.

Oxfam says loans account for more than 70% ($48.6 billion) of public climate finance. How can it be fair that countries that have done next to nothing to cause the climate crisis are being pushed into debt to adapt?

If such is the state of public finances, it is even worse with the private sector. Private financing decisions are still influenced by perceptions that view poor and vulnerable countries as risky investment destinations. As a result, Africa receives less than 4 percent private climate finance, even though many of its nations are on the front lines of the crisis.

It is also very difficult to attract climate finance that enables the transition to renewable energy projects in Africa. According to the International Renewable Energy Agency (IRENA), Africa has received only 2 percent global investments in renewable energy over the past two decades.

Africa’s Burden

This current structure of climate finance is doomed to fail, failing to help those who need it most. It is also deeply unfair, as Africa knows all too well.

In addition to having a lower carbon footprint than other continents, Africa also absorbs global emissions, through “carbon sink” like the Congo Basin – the second largest tropical rainforest in the world after the Amazon.

Yet the continent is heavily dependent on climate-vulnerable operations such as agriculture, hydropower generation and tourism, which exposes it to disruption from extreme weather events, including worsening droughts. and flooding – all this apart from environmental degradation.

In early October, African ministers met in Kinshasa for negotiations ahead of the COP27 summit. They, as well as UN officials, denounced the unfulfilled funding promises at the meeting. UN Deputy Secretary-General Amina Mohammed said: “The funding currently available pales in comparison to the magnitude of the disasters that nations and vulnerable populations face and will face.”

What COP27 needs

At last year’s COP26 in Glasgow, climate finance was a low-key issue; not because it hasn’t been raised, but because wealthy economies like the United States and the European Union have conveniently turned a blind eye. This is unacceptable.

The COP27 conference is expected to be underpinned by the pillar of climate finance, among other strategic areas. And this time, rich nations should be legally bound to keep their promises. This should not be seen as a favor to polluters; this is what they owe the rest of the world.

International climate finance initiatives endorsed by COP27 must expand financial support to help the poorest and most vulnerable countries mitigate and adapt to the effects of climate change. They must also cover the third key element of climate finance: addressing the losses and damages caused by the crisis.

To this end, COP27 should establish a Loss and Damage Focused Finance Facility and take swift action to make it operational. Furthermore, a consensus is needed that this financing should be based on grants in order to avoid adding to the debt burden of African countries.

Reasons to hope

Despite the obstacles, there is a growing appetite for funding and investing in climate projects in Africa. Major green projects have been built in recent years, and many more are taking shape.

In East Africa, Kenya is focusing on geothermal development and recently established the 310 MW Lake Turkana Wind Power Project, which has offset 0.7 million tonnes of carbon emissions in its first year of operation, more than 4% of Kenya’s total annual emissions. The country has also pledged to fully transition to renewable energy by 2030. Ethiopia is developing its own geothermal resources.

In the north, Morocco recently started operating the first phase of Noor II, a mega solar project with a capacity of over 300 MW.

A sustainable transition to a green global economy would, in addition to producing clean energy, create new jobs while providing fallback options for those whose jobs disappear in this transition.

Yet increased finance and investment is still hampered by a negative perception of risk among investors, underdeveloped green finance markets – and most importantly, by the very model of climate finance that punishes the most vulnerable nations. exposed to climate change.

This must change. Climate finance must be a central conversation at COP27. It’s time for this support to reach those who need it most now, so we can build a better future for all of us.

The opinions expressed in this article are those of the author and do not necessarily reflect the editorial position of Al Jazeera.