Africa’s Climate Finance Gap Hits $108B as COP 27 Nears

With African countries on the front lines of the climate emergency facing a US$108-billion annual gap in climate finance, loss and damage negotiations will a strong focus at the upcoming COP 27 summit in Egypt.

At last week’s United Nations General Assembly in New York, Secretary General António Guterres declared that confronting the climate crisis must be the first priority of every government and multilateral organization. “And yet climate action is being put on the back burner –despite overwhelming public support around the world,” he told national leaders. Guterres recalled the recent devastating floods in Pakistan, where a third of the country was submerged under water, to highlight that “the poorest and most vulnerable—those who contributed least to this crisis—are bearing its most brutal impacts.”

Meanwhile, “the fossil fuel industry is feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns,” Guterres continued. He urged wealthy countries to tax the excessive profits of fossil fuel companies and redirect the funds to countries suffering the most climate change-induced loss, and to people struggling to manage the increasing cost of living.

Those arguments are intensifying with the approach of COP 27, only the third UN climate summit to be held on African soil.

African countries are among those hit hardest by climate change, despite generating a fraction of the emissions of countries like the United States or Canada. According to the African Development Bank (AfDB), Africa is already losing 5% to 15% of its per capita economic growth from natural disasters like droughts, flooding, and cyclones that are worsening because of climate change, reports The East African.

The continent’s agriculture sector is especially vulnerable after years of underinvestment undermined the resilience of many African farmers, says Oxfam.

But international support has lagged far behind what is needed. Although African nations have received roughly $18.3 billion in climate finance between 2016 and 2019, the continent still faces a $1.3-trillion climate finance gap this decade.

“These sums reflect how the crisis is,” said Kevin Urama, the AfDB’s acting chief economist. “Investing in climate adaptation in the context of sustainable development is the best way to cope with the climate change impacts.”

Experts say the public and private sectors both see appeal in financing and investing in climate projects in Africa, but “funding is hindered for reasons including risk perception, underdeveloped green finance markets, and local technical and policy constraints,” The East African writes.

At the 2009 UN climate conference in Copenhagen, wealthy nations committed to mobilize $100 billion per year in climate financing for emerging economies by 2020. The 2020 deadline was not met, and in the lead-up to COP 26 in 2021 the countries arbitrarily extended the deadline to 2023. At a meeting in Cairo last week, African ministers decried q lack of support that they said resulted in the continent receiving less than 5.5% of global climate financing.

“Climate finance structure today is actually biased against climate-vulnerable countries,” Urama stated. “The more vulnerable you are, the less climate finance you receive.” The cost of borrowing for African countries is also being driven up by other factors, like the COVID-19 pandemic and the war in Ukraine, says Reuters. (Elsewhere, critics are blaming the World Bank and its climate-denying president, David Malpass, for raising the cost of climate projects in developing countries.)

Africa’s leaders hope to push wealthy nations to mobilize the funding at COP 27, which opens November 7 in Sharm el-Sheikh, Egypt. Among those leaders is Kenya’s new president, William Ruto, who has put climate change at the centre of a government agenda that includes an ambitious pledge to phase out fossil fuels and ramp up efforts towards a just transition to renewable electricity by 2030.

At COP 27, Ruto will be leading the continent’s negotiations for financing and technology to offset climate change impacts, says the Associated Press.