Africa still missing from the Radar of Global Carbon business The world has woken up to the realization that something needs to be done to combat the brutality emanating from the effects of climate change.
Africa still missing from the Radar of Global Carbon business
The world has woken up to the realization that something needs to be done to combat the brutality emanating from the effects of climate change.
We are aware of international efforts, which culminated into adoption of consensus and signing of a global agreement to right the wrongs already done by our increasingly capitalized society.
The Kyoto protocol and other related measures would come to mind in this respect. This call was a response to the threats which was captured by the Executive Director to the United Nations Convention on Climate Change (UNFCCC) Yvo De Boer when he remarked that ‘climate change is the world’s priority- the greatest threat hanging over humanity’.
Thus to take the drive to achieve the desired gains signatories to the convention as very bright chaps made a very innovative decision-to design a market driven mechanism where cash would be the principle and the overriding motivator to drive this change agenda.
In other words the global society in effect privatized the business of climate change. This actually sounds very interesting. Why? The philosophy behind the idea was simple-‘send a thief to catch a thief’ was the maxim that was used by the designers of this market.
This was meant to lure the private sector with all its agility to fight wrongs caused by over capitalization of society. The first steps that were taken was to establish what I would call the ‘ boosters’ of this new market which came to be known as the global carbon business.
To further deepen the market driven approach to fight the negative effects of climate change, funding of this initiative took centre stage.
The World Bank for instance established a trust fund-what came to be known as the Prototype Carbon Fund to inform the global society through a ‘learning by doing approach’(to use the world bank parlance) on how critical pathways could be instituted to drive forward the process.
This in effect gave birth to something new within the world of finance-global Carbon finance. Now in its second decade the World Bank’s current Carbon finance business mission is to catalyze a carbon market that support sustainable development.
This is to mean development that is ‘carbon neutral’. Meaning zero tolerance to emission of green house gases through reduction of transaction costs involved in this new industry while reaching and benefiting the poorest of the poor.
Carbon finance at the World Bank according to its latest report on this market now has over 11 established separate funds. According to this report, the World Bank as at 31st December 2008 the bank managed carbon funds and facilities has 186 projects in their portfolio with an estimated carbon asset value of more than US$2.3 Billion.
The World Bank figures show that 119 projects have signed emission reductions purchase agreements with a value of over $1.8 billion, up from 89 projects (totaling over US$1.5 billion) in 2007.
To watchers of Africa like myself the figures gave us a depressing picture. The report states that East Asia and Pacific region—in particular China—with a total emission reduction value of over US$1.3 billion took up the lion’s share of all active projects.
The Latin America and the Caribbean and Europe and Central Asia regions have the second and the third largest share of the portfolio. Africa signed up only deals representing 6% of the total share.
As Rwanda has just hosted the third ministerial conference on financing for development with a focus on climate change, policy makers need to be jolted into taking action by such miserable findings registered by Africa. We need to wake up. We need to step up our act by aggressively getting involved.
China’s example is worth emulating. China was a very shy participant when the market opened up in the late 1990s. Now it is a leader.
While we acknowledge that carbon business is a highly complex undertaking requiring a host of needs in terms of knowledge and associated forms of capital, it is not rocket science. Let us follow the eagerness of the Chinese.
If anything the effects of climate change will only greatly destabilize the weak and the most vulnerable such as African economies. We need to act now.