Climate finance is climate investment

In every sphere of life, Africans are great innovators and entrepreneurs. You only have to step into an African market to see and hear that ingenuity.

But every entrepreneur needs investment, and that’s where things often get tough in Africa. Investment is hard to come by, whether you're a small trader trying to open a bank account or a company trying to get a loan so it can grow.

African countries need investment, too. Right now, in particular, they need investment so they can adapt to the effects of climate change and play their part in reducing greenhouse gas emissions. Climate change adds urgency to the investment needs that were already there — for infrastructure, agriculture, health and education.

The historic Paris Agreement that was reached at the COP21 climate talks last year provides for such investment. Developed countries have committed to providing $100 billion a year between 2020 and 2025, and to set a new, higher goal for the period thereafter.

At this year’s global climate talks, COP22 in Marrakesh, Morocco, in November, it’s crucial that developed countries finalise the “roadmap” towards meeting that annual $100 billion goal. Above all, that means the biggest emitters of greenhouse gases: the United States (15% in 2014), the European Union (9.6%), Russia (5%) and Japan (3.6%).

There’s a catch when it comes to the $100 billion. The definition of “developed countries” goes back to 1992, when the United Nations Framework Convention on Climate Change was signed. So it doesn't include China — now by far the world’s largest emitter (29.6%). China, Brazil and other emerging economies should be making their own significant contributions to climate finance, and stepping up to meet other global climate obligations.

The $100 billion is called climate finance, but it’s really climate investment. Partner countries need to make sure that they invest in Africa to protect the progress that they have already helped to build. China, a major investor in many African countries, bears a particular responsibility to safeguard its investments.

On a global scale, climate finance for Africa is an investment in the future. Africa may contribute little to total emissions now, but almost all of the world’s population gains over the next 50 years will happen in Africa. Africa and its climate finance partners need to make sure that growth is low-carbon growth.

Africa, for its part, is far from being a passive recipient of rich countries’ money. Africa has the potential to become a global climate leader. The Africa Progress Panel, of which I am a member, demonstrated this powerfully in its recent report Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities.

African countries know that their 21st century growth needs to be driven by renewable energy, and they are making astonishing leaps. Delegates at COP22 need look no farther than Ouarzazate, where Morocco is building the world’s largest concentrated solar power station. Ethiopia, Ghana, Kenya, Rwanda and South Africa have also built huge solar and wind power stations.

The continent needs low-carbon energy not just to climate-proof African growth, but to expand access to modern energy: two-thirds of Africans do not have electricity. It takes a long time to design, finance and build big power stations, and to extend grid access to remote areas. That’s why many Africans are turning to off-grid solutions, especially solar. Off-grid household or mini-grid systems are expected to supply 70% of the 315 million people who will gain access to electricity in rural Africa by 2040.

That scenario will still leave at least 300 million people without electricity in 2040, however. And only 3% of international climate finance is being channelled towards such “decentralised renewables”.

That gap illustrates starkly the triple challenge delegates must address at COP22. We need to increase our ambition, to act urgently, and to think long-term.

When it comes to ambition, one of the achievements of the Paris Agreement is the joint commitment to revise our global climate goals regularly. COP22 needs to maintain and increase that pressure. For one thing, there is widespread doubt over whether the $100 billion in climate finance will even be enough. Some experts have put the figure at $400 billion.

We need to act urgently because with every month that goes by, there is new scientific evidence that global warming’s effects are more severe and more immediate than we had anticipated. Developing countries need to receive climate finance now so they can start adapting immediately for climate effects that will be upon us very soon. That means finalising a new workplan at COP22 to compensate countries for “loss and damage” from climate change.

We need to think long-term because this is not just about us, or even our children: this is an investment in every generation to come. They will look back and judge us not on the promises we make – or the excuses we make – but on the action we take now.

This article was originally published in The Africa Report.

Strive Masiyiwa is member of the Africa Progress Panel—chaired by Kofi Annan, a think tank based in Geneva. You can follow the organisation on Twitter via @africaprogress