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September 8, 2023

Climate policy: key points from the Africa and Finance in Common summits

Kenya president William Ruto speaking at Africa Climate Summit
‘We demand a fair playing ground for African countries,’ says Kenyan president William Ruto at this week’s Africa Climate Summit (Photo: Luis Tato/AFP via Getty Images)

The final declaration from this week’s Africa Climate Summit reiterated calls for richer nations’ bigger financial commitments toward the green transition, while development banks meeting at the Finance in Common Summit asked for stronger mandates to help them support sustainable growth

Global climate policy dynamics are slowly changing. On Wednesday, the first Africa Climate Summit drew to a close. The final text expressed the continent’s commitment to become a climate action leader, and reiterated calls for urgent reform of the global financial system to ensure no country has to choose between development and actions to mitigate climate change and adapt to the impacts of a warming world.

Momentum for change has been building since last year’s UN climate conference in Egypt, dubbed by many as the “Africa COP”, and the Summit for a New Global Financing Pact held in Paris in June, and is expected to continue at COP28 in Dubai in November.

African countries do not just want help from richer nations to adapt to increased extreme weather events, they want the means to adopt clean energy infrastructure, modern, sustainable farming methods, and to reap the economic and social rewards of the move to net zero. And they are clear they are no longer prepared to play by the rules imposed by the world’s wealthiest nations.

“We demand a fair playing ground for African countries to access the investment needed to unlock the potential and translate it into opportunities,” said Kenyan president William Ruto at this week’s summit in Nairobi. The three-day meeting was attended by leaders from 20 African countries, US climate envoy John Kerry, European Commission president Ursula von der Leyen, and UN secretary-general António Guterres.

The summit’s final declaration commits the continent to focus on green growth both inside and outside its borders. It insists that pledges can only be reached if the international community steps up and plays its part in mobilising capital for “development and climate action”. This conclusion underlines the need to reform the multilateral development banks and for new debt relief interventions.

Vision and leadership

“The Africa Climate Summit has asserted new leadership on global climate action from the continent most vulnerable to its impacts,” said Alex Scott, programme lead for climate diplomacy and geopolitics at think-tank E3G, in a statement. “Kenya has shepherded a declaration by African leaders with clear calls for accelerated climate action, mobilising a massive scale of investment in green transition and adaptation in Africa, and reforming the finance system for fairer financing and debt management.”

Kate Hampton, chief executive of the Children’s Investment Fund Foundation, struck a similar tone. The summit has “not only provided a new vision for the continent, but has stepped into a leadership position by providing radical but practical proposals of global significance”, she commented on X, the social media platform previously known as Twitter.

“The Africa Climate Summit was a success, with African leaders showing the world that they too have solutions to the climate crisis and are keen to provide this leadership,” said UN special representative Damilola Ogunbiyi on X. 

In an effort to show willing, the EU, the US and the UK made some new financing commitments during the summit. The US said it intended to provide an additional $30mn to “accelerate climate-resilient food security efforts across Africa”, while the EU highlighted its €150bn “global gateway” investments going to projects such as “hydropower plants in the [Democratic Republic of Congo], Burundi, Rwanda and Tanzania”. The United Arab Emirates made the most impressive showing, though, with a $4.5bn pot of renewable energy investment funds.

Climate justice missing

Mohamed Adow, the outspoken director of energy and climate think-tank Power Shift Africa, described the US’s $30mn contribution as “an insult coming from the biggest historic polluter and the wealthiest country on the planet”.

In a hard-hitting thread on X, Adow suggested the “global north” was struggling to change course. The summit had “awoken the sleeping giant that is the African climate movement”, he wrote, but compared the outcome to “a man dying of thirst in the Sahara Desert and being offered only his own urine”.

“Africa needs a visionary new plan that breaks from the failed approaches of the past,” said Adow. “It needed serious investment in renewables and adaptation. It got a bunch of global north countries and companies propping up a failed carbon market so rich polluters can keep polluting.”

In a joint report released on Wednesday, the International Energy Agency and the African Development Bank called for new types of financing to support the continent’s green transition and said that concessional and blended finance would serve as catalysts for innovative solutions. “Alongside improvements in policy and regulation, concessional capital of around $28bn per year is needed to mobilise the $90bn of private sector investment by 2030 … a more than tenfold increase from today,” the report said.

Climate justice groups were also unconvinced about the outcome of this week’s Finance in Common Summit of more than 500 public development banks in Cartagena, Colombia. Talks centred around climate, biodiversity, sustainable infrastructure and the banks’ role in supporting the UN Sustainable Development Goals, among others.

In the final communiqué, the banks called on their governing nations to strengthen their mandates so they can “systematically align their operations with the SDGs” and “allocate more concessional resources at an affordable cost” to poorer countries.

They also expressed a willingness to contribute to a renewed global financial architecture and extend the G20 Capital Adequacy Framework review recommendations to all public development banks requiring the use of new financial tools to increase lending.

Private finance

Civil society organisations, however, criticised the banks’ proposed “innovative products and solutions” as being over-reliant on private finance.

“Market-based solutions are the root cause of the polycrisis,” said Jason Rosario Braganza, executive director at the African Forum and Network on Debt and Development, in a statement. Instead of “more debt or private finance”, Africa needs support to “generate its own domestic resources”, he said.

Ruto and other leaders were clear they expected to see movement in the direction set out in the Nairobi Declaration, starting at the G20 meeting in Delhi this weekend.

Last week, 15 businesses operating in India, including domestic companies such as digital services giant Infosys and food delivery company Tomato, and non-Indian firms like Ikea, called on G20 leaders to commit to a clear 1.5C aligned policy trajectory that would boost climate action and help create resilient jobs.

Other opportunities for progress on global climate action and reform of the financial system include the UN summits later in September, the International Monetary Fund and World Bank annual meetings in October, and COP28.

In addition to discussions on private finance, a number of cross-border collaboration were announced during both the Africa Climate Summit and the Finance in Common Summit, including the launch of a green hydrogen strategy between the EU and Kenya, and the development of a blue finance roadmap among development banks to better finance blue economy projects.

Additional reporting from Claudia De Meulemeester

 

A service from the Financial Times