Africa Requires USD 2.8 Trillion By 2030 to Meet Climate Finance Goals

By Soko Directory Team / Published July 6, 2022 | 10:32 am




KEY POINTS

The private sector has significant potential to meet Africa's climate finance needs, but nationally determined contributions (NDCs) rarely address it. However, the majority of current climate financing in Africa comes from public actors (87 per cent, 20 billion dollars), with only a small amount coming from private actors.


Climate Change Africa

KEY TAKEAWAYS


African governments have committed 264 billion dollars in domestic public resources, accounting for roughly 10 per cent of the total cost. To achieve the 2030 climate goals, the continent will need approximately 250 billion dollars annually.


A new report by the Climate Policy Initiative has revealed that African countries need 2.8 trillion US dollars between 2020 and 2030 to meet their climate finance goals.

The organization, made up of a group of scientists, noted that many countries depend on external financial support for approximately 2.5 trillion dollars of the cost.

African governments have committed 264 billion dollars in domestic public resources, accounting for roughly 10 per cent of the total cost. To achieve the 2030 climate goals, the continent will need approximately 250 billion dollars annually.

The report said that the domestic and international yearly contributions for the cause in 2020 stood at 30 billion dollars only.

In four of the five African sub-regions, mitigation accounts for the majority (66 per cent) of reported climate finance needs. It accounts for 77 per cent of the total need in Western Africa, 75 per cent in Southern Africa, 70 per cent in Central Africa, and 57 per cent in Eastern Africa.

The transportation sector was projected to require the most climate finance (41 per cent, 657 billion dollars).

Agriculture, forestry, and other land-use sectors emit the most greenhouse gases, accounting for only 7 per cent of total needs (108 billion dollars).

South Africa, Ethiopia, Nigeria, and Egypt have the highest annual financing needs, totalling nearly 151 billion dollars. The report’s authors indicated that the total cost projection includes loss and damage estimates from 51 of 53 African countries.

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In the meantime, despite the continent’s high vulnerability to climate change, adaptation to climate change accounted for only 24 per cent of total climate finance needs identified.

Adaptation needs were primarily reported for agriculture (25 per cent), water (17 per cent), infrastructure and building (12 per cent), disaster prevention and preparedness (10 per cent), and health (10 per cent) in countries that provided sector-specific data (8 per cent).

Up to 10 per cent of total climate finance has been allocated to dual benefit actions, including mitigation and adaptation. Northern Africa is the only subregion with a nearly equal distribution of adaptation and mitigation needs.

Unfortunately, the private sector has significant potential to meet Africa’s climate finance needs, but nationally determined contributions (NDCs) rarely address it. However, the majority of current climate financing in Africa comes from public actors (87 per cent, 20 billion dollars), with only a small amount coming from private actors.

The authors urged the United Nations Framework Convention on Climate Change (UNFCCC) to develop international guidance to assist countries in comprehensively determining and estimating their needs.

Needs can be determined at the national level through national investment plans related to NDCs and climate finance strategies pertaining to national policies.




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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