What should Africa expect from COP28

The most important event on climate change is about to begin. World leaders, heads of multilateral institutions, civil society advocates, top private investors, and representatives from special interest groups are among the nearly 70,000 people flocking to the oil-rich desert lands of the United Arab Emirates. This year’s Conference of Parties (COP) is the most vital edition since its inception three decades ago, and crucially, Africa is approaching it much more prepared than before.

Conversations around climate change have picked up across the continent in 2023. Unlike most modern-day challenges, it is not a result of messaging but the impacts – which can be felt everywhere. From heatwaves in Algeria and Tunisia to the recent floods in the Horn of Africa region that have killed hundreds, declining agricultural yields, and increasing desertification in West and Central Africa, climate change has arguably become the top emerging issue facing the continent. African countries are on average spending 9 percent of their GDP responding to natural disasters caused by climate change. Worryingly, data shows that if the scenario continues, it could cause Africa’s GDP to decrease by up to 30 percent.

In the lead-up to COP28, African leaders have taken several steps to adopt a single, powerful negotiating position that will enable them to withstand the whims of the multitudes of lobbyists that will accompany developed nations’ delegations. The African Union High Level Private Sector Forum held in Nairobi in July set the tempo for discussions around climate financing, which then led to the inaugural Africa Climate Summit in September. Both events brought together actors from across the continent to develop one declaration ahead of the COP. The formal inclusion of Africa as a member of the G20 forum was also a notable victory in global representation.

So what should Africa expect from COP28? These are some of the priority areas that revolve around accelerating adaptation, climate financing and reducing emissions.

Loss and damage

Since the inception of the Paris Agreement in 2015 – a legally binding treaty that aims to keep global temperature rise to well below 2 degrees Celcius compared to pre-industrial levels – the idea of a “loss and damage” fund for developing nations has long been resisted by wealthy, high-polluting nations who fear being made liable for hefty compensations. At COP26, member states adopted the Glasgow Climate Pact that reiterated a pledge for wealthy nations to provide $100 billion annually to developing countries as climate finance. However, annual climate flows in Africa for 2022 were only $30 billion, which is just 12% of the $250 billion the Climate Policy Initiative says the continent requires.

Loss and damage funds are critical for addressing the impacts of climate change on the continent. Everyone agrees that until it comes to the point of paying up. Ahead of COP28, the African block and Small Island countries have taken a stand that the fund must be actualized. It is expected that the G20 nations will make contribution pledges, though the question of who will run the fund – the World Bank has been put forward – will be a strong point of contention.

Cutting emissions versus enhancing energy access

COP28 will see the first-ever “global stocktake” or review of each country’s progress in slashing emissions to meet the global warming pledges of the Paris Agreement.

African countries are coming under significant pressure to halt investments in fossil fuel production. While the continent contributes just 3% to global carbon emissions, methane emissions are shooting up. The African Development Bank (AfDB) reported in 2022 that the continent’s methane emissions had reached 4.7 million tons (a third of the world’s emissions) and are projected to continue rising exponentially.

But Africa needs energy. Agriculture is also critical to feed a 1.4 billion-strong population. And these two sectors are the leading methane emitters. However, just 2 percent of climate financial flows go to methane abatement efforts, and only 25 countries have signed up to the Global Methane Pledge that seeks to cut methane emissions by 30 percent by 2030.

On November 23rd, AfriCatalyst, a global development advisory firm, held a high-level panel discussion to explore how to increase financing for methane action in the continent.

It was widely agreed that to accelerate methane action, Africa needs a transformative strategy that will reduce perceptions of risk associated with investment projects, introduce sustainable financial models, and foster cooperation with multi-development institutions.

“Africa is the least risky region to do investment in infrastructures – the default rate for financed projects is only 5.5%, the lowest in the world,” Abdoul Salam Bello, Executive Director of the Africa Group II, at the World Bank Group observed.

“We need to change the narrative of risk by harnessing digital technologies, exploring concessional funding, and establishing a one-stop shop for all investing instruments,” added Bello.

Innovative climate financing models

COP28 will be the stage that advances the adoption of carbon markets, green bonds, and debt-for-climate swaps to raise financing for climate action in Africa. The summit should build upon the resolution made during the previous one held in Sharm El-Sheik, Egypt, in November 2022, where African heads of state launched the Africa Carbon Markets Initiative (ACMI). The landmark initiative had a lofty goal of reaching 300 million credits, thus unlocking $6 billion in income and supporting 30 million jobs by 2030.

However, progress has been slow. One year after its launch, the continent has only managed to raise a combined total of $200 million in carbon credits, and just seven countries have signed up to develop country carbon activation plans. COP28 should see additional adoption of the initiative by more countries. African policymakers are expected to soothe private investors to help the continent accrue more from a global carbon market that has reached $10 billion this year.

“Africa needs to reform the global financing architecture to secure funding, with domestic resource mobilization from carbon markets being key. A successful carbon market could yield $50-180 billion,” explained Vera Songwe, a resident fellow at Brooking Institution during a Climate Financing event cohosted by AfriCatalyst and Open Society Foundations.

It is not just carbon markets that African negotiators will target. Recently, a new mechanism dubbed ‘debt-for-climate swaps’ has come into the lexicon as one of the tools that could aid developing nations to raise climate financing.

In September, AfriCatalyst released a groundbreaking policy paper entitled, “Upscaling Debt for Climate & Nature Swaps in Africa.” The paper’s findings, which are expected to be discussed at COP, present strategies to restructure Africa’s debt, sustainable development goals, and foster climate resilience, through debt-for-climate swaps that offer win-win solutions for both external creditors and African nations. Such swaps promote collaboration while strengthening networks.

“Debt for climate and nature swaps are highly innovative climate financing instruments. They can assist countries in restructuring their debt, extending maturities, or lowering interest rates, thereby freeing up valuable resources that can be directed towards combating climate change,” AfriCatalyst Chief Executive Officer Daouda Sembane said during the report’s launch, held on the sidelines of the Africa Climate Summit.

Aside from carbon markets and debt-for-climate swaps, green bonds are another thing to watch out for. In 2017, Nigeria issued the continent’s first sovereign green bond (10 years after the European Investment Bank pioneered that form of investment), raising $29 million. Over the years, there has been a 300% increase in the issuance of green bonds in Africa. But that growth is minimal when compared with the rest of the world. According to the Brooking Institution, Africa accounts for just 0.4% of global green bond issuance, significantly lower than its 17% share of the global population and 3% share of global GDP.

In conclusion, COP28 may become the most consequential global event for Africa. After all is said and done and the resource-rich desert soils of UAE return to their usual isolation, the challenge will be in the implementation. The mechanisms incorporated in every agreement made will matter enormously. Africans expect a lot from COP, it is now up to the leaders attending to deliver the goods.