Pricing the climate risk for Africa

Africa is not just a victim of the climate crisis but an integral player in the global climate change discourse. The continent is facing significant challenges from the devastating effects of climate change to economic hurdles exacerbated by events like the COVID-19 pandemic and the Ukraine war. In a bid to find solutions to these pressing issues, Africa is set to host the first-ever Africa Climate Summit. The summit, led by His Excellency President Ruto of Kenya, aims to provide a platform for African countries to address the climate crisis and propose solutions that can contribute to global climate action. The Africa Climate Summit comes at a crucial time as the current trajectory of climate action falls short of the goal to maintain a global temperature rise of 1.5 degrees Celsius. As the world grapples with the urgent need for climate intervention, Africa is stepping forward with proposals and solutions to play a proactive role in combating climate change. Key outcomes expected from the summit include commitments to a green growth agenda, new climate finance mechanisms, and initiatives to track progress on climate-related developments. Additionally, the summit will focus on advancing existing initiatives such as the Bridgetown Initiative, Africa Carbon Market Initiative, and Desert to Power in the Sahel region. One of the pivotal aspects of the summit will be the establishment of a roadmap that ensures accountability for the commitments made and paves the way for tangible outcomes. Julius Ng'ang'a, the CEO of Africa Climate Summit, highlighted the importance of unlocking green finance opportunities for Africa's sustainable development. While acknowledging the need for developed countries to honor their commitments on climate financing, Ng'ang'a emphasized the importance of exploring new financial instruments, such as green bonds, to address the funding gap for climate initiatives. Several African countries have already made strides in the green finance space, with examples like Egypt's $750 million green bond and Kenya's affordable student housing project funded through green bonds. Moreover, innovative climate finance instruments like debt-for-climate swaps present promising avenues for leveraging financial resources for climate initiatives. Ng'ang'a also proposed a global financial architecture that calls for global taxes on industries like maritime, aviation, and fossil fuels to generate revenue for climate action. This approach seeks to ensure that climate finance is allocated based on the ability to impact climate change rather than merely the ability to contribute financially. By advocating for a more robust governance framework for climate finance, Ng'ang'a aims to channel resources effectively towards climate mitigation and adaptation efforts.