Sustainable measures needed to insulate economy against effects of climate change

There is need for strong mitigation measures against climate change to protect the economy from a slow down. Experts say Rwanda’s economy could become more vulnerable if efforts to combat climate change are not stepped up, adding that the situation might be compounded by low productivity and hence a slowdown in economic growth rate levels. Rwanda’s economy is projected by the World Bank to grow by 6.8 per cent this year, and rebound to 7.2 per cent in 2017. However, experts have warned, the effects of climate change could have a serious impact on economic growth if nothing is done to combat the situation. Dr Monique Nsanzabaganwa, the vice governor of the National Bank of Rwanda (BNR), said it is essential to address climate change issues from a micro-perspective to help safeguard Rwanda’s economy. “Climate change is real and has adverse effects on people’s lives and economies. “It is, therefore, critical that we take it seriously and step-up efforts to mitigate its impacts to keep our economy sound and resilient,” she said. Nsanzabaganwa was speaking during the 5th annual research conference organised by Institute of Policy Analysis and Research in Rwanda (IPAR-Rwanda) in Kigali on Thursday. It was under the theme, “Climate Change and Economic Resilience” and brought together over 100 economic experts, researchers and policy-makers to deliberate on strategies to combat climate change. A recent research by the Rwanda Environment Management Authority (REMA) and stakeholders indicate that effects of climate change cost the country about 1.4 per cent of the GDP, especially in the agriculture sector. According to the World Bank’s Rwanda Economic Update released last month, the country’s growth will be affected by the slowdown of the Chinese and European economies, as well as a decline in international commodity prices, particularly oil and minerals. Yoichiro Ishihara, the World Bank senior economist, said climate change affects productivity levels and must be addressed. Ishihara said exposing Rwanda to vagaries of climate change and external shocks arising from intrinsic features of the economy will affect economic growth. As a result of adverse effects of climate change, food, water and energy are all likely to become more expensive, experts say. “A fall in crop yield will disrupt supply chains and increasing competition for scarce resources thus affecting economic growth.” Experts advised investors to measure and understand the level of exposure to climate change risks to be able to design right approaches to address them. Speaking at the event, Dr Alfred Bizoza, an agricultural economics expert at IPAR-Rwanda, said climate change will have huge impact on crop productivity in the future, especially in the north-western Rwanda, which will greatly affect household incomes. “More frequent, severe, and unpredictable floods and droughts will lead to reduced agricultural productivity and increase post-harvest losses (estimated at 30 per cent presently) if nothing is done to combat climate change,” Dr Bizoza noted. Eugenia Kayitesi, the executive director of IPAR-Rwanda, said climate change will have catastrophic consequences on economic development if it is not well managed. “We need to encourage more dialogue from the grassroots level to be able to find sustainable solutions to combat climate change,” Kayitesi added. Meanwhile, the government and stakeholders have embarked on a project that will ensure nearly one million farmers get timely access to essential climate information services. The Rwanda Climate Services for Agriculture project will help transform Rwanda’s rural farming communities and national economy through improved climate risk management, according experts. business@newtimes.co.rw

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Sustainable measures needed to insulate economy against effects of climate change