Our common heritage is under threat and with the approach of the IFCC Conference of Parties 27 (COP27) which takes place next week at Sharm El Sheikh in Egypt, Climate Finance will be on the table for discussion.
Climate change is well-nigh upon us. It is not something that will occur in the future but rather a phenomenon that is already underway and whose effects we have to live with for years to come. This is due to the lingering effect of carbon dioxide in the atmosphere which heats up the earth and causes various negative effects affecting life on the planet.
If unaddressed, it is estimated that 118 million people on the continent will be exposed to extreme weather by 2030. Drought and floods, heatwaves and extreme cold have markedly increased and for a country that greatly depends on rain for agriculture, this is not good news.
Mitigation and adaptation are the two sides of the coin that are being used to tackle the adverse effects of climate change. We reduce our emissions so as not to inject further carbon dioxide into the atmosphere and we learn to live with the negative consequences of our past actions. As part of the Paris Agreement which was signed in 2016, each country had to come up with its own Nationally Determined Contributions (NDCs) to both mitigate and adapt to climate change and update them every half a decade. But both actions require funds.
Climate finance is therefore a necessary tool for all countries but particularly for vulnerable African economies to meet their end of the deal. But so far, financial inflows for adaptation in the continent fall far short of expectations. Between 2014 and 2018, Africa received less than half of what was required to meet its adaptation needs. Worldwide it is estimated that climate finance needs to increase fivefold for the world to meet its goals by 2050.
Other problems include the fact that more adaptation finance also comes in the form of loans and not grants, increasing African and third world indebtedness. It also usually goes to certain sectors only limiting the effectiveness of programs that could have far wider reach. Spending is also spent more on mitigation efforts than on adaptation programs.
Without adequate finance, the risks to the lives and livelihoods of people and the sustainability of companies, communities and organisations will continue to grow. One of the ways companies are trying to mitigate risks is through using Environmental, Social, and Governance (ESG) investing but even this is not enough.
Climate funds will be one of the key discussions at Sharm El Sheikh in the coming weeks. It is an urgent task as net zero goals are still far in the horizon.