The African Development Bank President says that Africa’s “vast natural capital has been undervalued,” despite the continent’s significant contribution to tackling climate change. Akinwumi Adesina raised the alarm on Wednesday, November 13, at a meeting of African leaders and policymakers and climate activists on the sidelines of the UN climate change summit COP29 in Baku, Azerbaijan. ALSO READ: COP29: Kagame calls for sufficient climate finance for Africa “Africa has some of the largest sources of natural capital in the world,” Adesina said at the event themed “Measuring the Green Wealth of Nations: Natural Capital and Economic Productivity in Africa.” He said this wealth includes over 40 per cent of the world’s clean energy potential, 65 per cent of the world’s uncultivated arable land, 25 per cent of global biodiversity, and 20 per cent of the world’s tropical rainforest area. The Congo Basin is the second largest carbon lung in the world after the Amazon Forest. It stretches 314 million hectares with 1.2 million kilometers of primary forest, he said. ALSO READ: COP29: What African group of negotiators hope to walk away with The peatlands of the Congo Basin store 29 billion tons of carbon. That is equivalent to 3 years’ worth of global greenhouse gas emissions, Adesina said, adding that the Congo basin absorbs about 1.5 billion tons of carbon dioxide per year. “Africa’s forests account for 26% of all carbon sequestration in forests worldwide,” he said. “While Africa contributes significantly to global public good for tackling climate change with its vast resources of natural capital, its vast natural capital has been undervalued,” he said. “This vast natural capital is not taken into consideration in valuing the GDP of African countries.” ALSO READ: COP29: What is Rwanda's main agenda in Baku? For example, he noted, while the GDP of Africa was estimated at $2.5 trillion in 2018, this was 2.5 times lower than the estimated value of its natural capital, evaluated at $6.2 trillion, which partly includes some valuation of the ecosystem services. “This situation makes Africa to be ‘green endowed’ but ‘cash poor.’” Adesina said. The African Development Bank’s preliminary estimates show that Africa’s nominal GDP in 2022 could have increased by $66.1 billion when adjusted for carbon sequestration only. “That is more than the combined GDP of 42 African countries,” he said. He stressed that the proper valuation of Africa’s green GDP is where the trillions of dollars for the continent, based on proper valuation, will come from, to boost the wealth and financing of the continent. Carbon markets in African countries The greening of the GDP will also have other benefits, including the development of carbon markets in Africa. ALSO READ: Can Africa position its carbon market to finance climate action? “Unfortunately, today, several African countries are giving away their vast amounts of land to carbon credits,” Adesina said. “While this may generate some short-term financing, it needs to be understood that Africa is a carbon price taker and therefore is short-changed. While the price of carbon in Europe is high and could be as high as $200 per ton because of the strict EU Emission Trading Standards, carbon price in Africa could be as low as $3 to $10 per ton.” “The widespread sales of vast areas of Africa’s lands rich in carbon, what I call ‘carbon grab’, has five consequences, which we must understand,” he noted. First, he said, countries are being “underpaid” for the carbon, due to the undervaluation of Africa’s carbon sinks, and second, the sequestered carbon on the lands can no longer be used as part of the nation’s nationally determined contributions.” “Third, the countries lose sovereignty over their lands,” he said, adding that the carbon sequestered over these lands and forests cannot be used to rebase and revalue the green GDP of the countries. The fifth consequence of the situation is that “the ongoing carbon grab in Africa is a lose-lose proposition,” Adesina said. He said proper evaluation of Africa’s environmental wealth would increase access to financial flows, in part because credit ratings agencies will be able to incorporate the true value of overall asset class.” “The significantly higher revenues that Africa will generate from the proper valuation of its carbon sinks and environmental services will also allow it to be able to service its debts, assuring debt sustainability,” he said.
