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Why climate cash could make or break COP27

International conferences on climate change are weighty undertakings: they must be built on strong pillars of action, not just hot words and hot air. Starting on Sunday, the United Nations climate meeting in Egypt, COP27, will be no different. And no pillar is more important for Africa than international climate finance.

This year’s meeting of world leaders has been dubbed “Africa’s COP”, not because the continent is the host, but because it is increasingly bearing the brunt of the effects of climate change and is the one that has done the least to provoke the crisis. Africa emits only about three percent of global carbon dioxide emissions. This year we need to see African priorities at the center of global negotiations.

Previous promises by developed countries, the biggest emitters of carbon, to channel $100 billion a year by 2020 to help vulnerable nations adapt to climate change have not been fulfilled.

However, even if rich countries followed through on their commitments, that would not be enough. Africa alone faces a climate finance gap of around $108 billion each year, according to the African Development Bank, amid the growing economic impacts of the COVID-19 pandemic and the war in Ukraine. Rich nations must go one step further.

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

The dirty truth of climate finance

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

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Oxfam says loans make up more than 70 percent ($48.6 billion) of public climate finance. How can it be fair that countries that have done almost nothing to provoke the climate crisis are forced to go into debt to adapt to it?

If that is the state of public finances, things are even worse with the private sector. Private financing decisions are still influenced by perceptions that see poor and vulnerable countries as risky investment destinations. As a consequence, Africa receives less than 4 percent of 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 to jumpstart renewable energy projects in Africa. According to the International Renewable Energy Agency (IRENA), Africa has received only 2 percent of global investments in renewable energy over the last two decades.

the burden of africa

This current structure of climate finance is counterproductive, as it does not help those who need it most. It is also profoundly unfair, as Africa well knows.

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As well as having a smaller carbon footprint than other continents, Africa also absorbs global emissions through “carbon sinks” such as the Congo Basin, the world’s second largest rainforest after the Amazon.

However, the continent relies heavily on climate-vulnerable operations such as agriculture, hydropower production, and tourism, exposing it to disruptions from extreme weather events, including worsening droughts and floods. in addition to environmental degradation.

In early October, African ministers met in Kinshasa to negotiate ahead of the COP27 summit. They, as well as UN officials, decried broken promises on finances at the meeting. UN Deputy Secretary-General Amina Mohammed said: “The funding currently available is a pittance relative to the magnitude of the disasters that vulnerable nations and people face and will face.”

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What COP27 needs

At last year’s COP26 in Glasgow, climate finance was a muted issue; not because it was not raised, but because rich economies like the United States and the European Union conveniently turned a blind eye. That is unacceptable.

The COP27 conference must rest on 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 from the polluters; it is what they owe to the rest of the world.

International climate finance initiatives that COP27 agrees on must encompass financial support to help the poorest and most vulnerable nations mitigate and adapt to the effects of climate change. They must also cover the third key component of climate finance: addressing loss and damage caused by the crisis.

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To this end, COP27 should aim to establish a financing mechanism focused on loss and damage, and take swift action to make it operational. Furthermore, consensus is needed to make this funding grant-based to avoid accumulating a debt burden on African countries.

reasons for hope

Despite the odds, there is a growing appetite to finance and invest 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 310MW Lake Turkana wind power project, which helped offset 0.7 million tonnes of carbon emissions in its first year of operation, i.e. more than 4 percent of Kenya’s total annual emissions. The country has also committed to making a full transition to renewable energy by 2030. Ethiopia is in the process of developing its own geothermal resources.

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In the north, Morocco recently began operating the first phase of Noor II, a solar megaproject with a capacity of more than 300MW.

A sustainable shift to a green global economy, in addition to producing clean energy, would also create new jobs and offer alternative options to those whose jobs disappear in this transition.

However, the growth of financing and investments is still hampered by a negative perception of risk among investors, underdeveloped green financial markets and, above all, by the very model of climate financing that punishes the nations most exposed to climate change. climate change.

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

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

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