Dominic Waughray of Nigeria’s Business Day Newspaper (May 4, 2011) looks ahead at the December 2011 United Nations annual conference on Climate Change to be held in Durban (South Africa), in relation to the much hyped Green Climate Fund (USD 100 bn per year by 2020) agreed at the Mexican-climate talks in Cancun in 2010.
He cautions that although it sounds a lot, US$100bn per year simply won't be enough to pay for the transition to a resilient, low carbon economy, even if all the money were just for Africa. For example, leaving aside the cost required to pay for the damage climate change will cause, US$100bn will not cover the cost of investing in cleaner, more widespread energy systems across the continent.
Dominic rightly ponders on the question: How best to design the Green Climate Fund to ensure that Sub Saharan Africa and other developing regions can make most use of the US$100bn a year that richer countries promised will be available annually by 2020?
Dominic suggests that to be of maximum use, the US$100bn of overseas assistance on offer within the Green Climate Fund will need to be used to attract other forms of investment into the renewables markets in Africa, particularly from the private sector.
He recommends using the US$100bn of public money to draw in a much greater private capital flow from domestic and international markets based on ‘blended public-private’ investment activities. Not only does this create an upscale in clean energy investment projects that help to reduce emissions, it also helps with energy access, an important issue for Africa. Many more decentralised solar projects, for example, could be financed, if ways of aggregating investment risk to the private sector can be identified. A further benefit is of course, that these investments would not be delivered as overseas aid, but instead as on-the-balance-sheet investments, which would boost GDP and stimulate international partnerships with the private sector in investment and technology. In this way, emissions reduction targets become reformulated as GDP enhancing "green-growth" strategies - an economically attractive, growth-orientated path for African countries, and others, to pursue.
But then, Dominic puts across a (readiness) question for Africa: what sorts of economic and industrial policies might African countries develop in order to attract these green investment partnerships, and what role can richer countries play through the Green Climate Fund and other instruments, to provide aid funds to help speed this up?
Read Dominic Waughray’s full article: Green growth paradigm for Africa's economy