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Facilitating Green Growth in Africa Perspectives from the African Development Bank Rio de Janeiro, June 14, 2012 ______ Frank Sperling Energy, Environment and Climate Change Department Green Growth Team African Development Bank Part 1: Rationale for Green Growth in Africa Green Growth represents a transformative development model for enabling sustainable growth and creating prosperity in Africa by taking a holistic approach to development, which: values human, social and natural capital, efficiently and sustainably uses ecosystem goods and services, and: builds resilience in a changing and increasingly interconnected world The Global Perspective on Green Growth On a global scale the rationale for green growth is clear. Humanity has become the dominating force shaping the surface of the planet, altering major biophysical processes from local to global scales. Renewable resources are being utilized at faster rates than they can be replenished. Consequences: Overexploitation of natural resources, loss of biodiversity Waste Accumulation Pollution Climate Change etc. In light of population growth, continuing with BAU is not an option. Need to adjust our economic model in recognition of the physical boundaries of the planet and social justice. Sources: Crutzen 2002, MEA 2005, IPCC 2007, Zalasiewicz et al 2008, WWF 2010, Raworth 2012 Green Growth in the African Context Development: A continent on the move: Rapid economic growth (GDP growth rates of 5% and more) Increasing Foreign Direct Investment Growing entrepreneurship Environment: A continent rich in natural resources… Abundance of renewable and nonrenewable resources Continent is still within the biocapacity of its lands Africa is low carbon: Average per capita and aggregate emissions are low but: Growth often driven by natural resources, low employment elasticity Poverty remains wide-spread, (Over 60% of Africa’s population earn less than US$ 2) Among the largest wealth disparities in the world but: Steep climatic and environmental gradients across the continent Progressive land degradation and environmental pollution Africa’s ecological footprint, the aggregate demand on natural resources, increased by 240% btw. 1961 and 2008 Disaster Risk and Climate Change Sources: AfDB et al. 2012, WWF and AfDB 2012 Consequence Green Growth needs to be development centered, relating to key development challenges: Overcoming the infrastructure deficit Efficient Management of Natural Resources Natural Disasters and Climate Change Food Security Issue: Energy Access and Security Development requires energy Decisions taken today will lock-in Africa’s energy infrastructure for decades Issue: Land degradation Land degradation affects large parts of Africa. Issue: Population Growth Issue: Climate Change Figure. Most of Africa’s crops are likely to be adversely affected by climate change: Projections for 2045-65 relative to 1961-2000. Source: Schlenker and Lobell 2009 Issue: Economic Risks Figure. Changes in world price’s for key African agriculture exports during 2012. Ecological footprint Green Growth is a transformative, iterative process leading towards greener economies GDP per capita Time X1 X2 Green Growth: It is about adapting to changing realities for development, but also about seizing new opportunities: Leap-frog to efficient technologies when addressing Africa’s infrastructure deficit Manage Africa’s new asset – carbon, recognizing the growing importance of Africa’s natural wealth to the world Harness the demographic dividend through education and skills development Leverage growing private-sector development through clear regulations and incentives Part 2: Transitioning to Green Growth Green Growth is a iterative process. It is a about identifying options that enable the transition towards sustainable development pathways. GREEN GROWTH FOCAL AREAS I. Providing Sustainable Infrastructure II. Efficient/Sustainable Management of Natural Assets III. Building Resilience of Livelihoods and Economic Sectors Access to renewable/low-carbon Land (agriculture, forests energy and energy and other land-uses) efficiency Physical/climate Sustainable transport Water (freshwater, marine) Economic Sustainable cities Minerals Social Steps (1) Vision/Buy-In: Strong political leadership at highest level, cross-sectoral focus, early stakeholder engagement Valuing What Matters: Focus on quality of growth, national accounting of economic, social and natural capital Planning for the Future: Avoiding lock-in of unsustainable development pathways Steps (2) Sending the right signals: Engagement of private sector is crucial; requires clear regulatory environment, policy incentives Financing: Many interventions result in cost savings over project life time, increasing efficiency and productivity, but upfront investment costs may present obstacles for transition. For green growth options with global benefits appropriate contributions from international community are needed. Part 3: Building on Experience AfDB and other development organizations can build on existing policy, operational and financing experience that can function as building blocks for green growth development pathways. Project Examples: Alternative Pathways to Energy Security (1) In Kenya, where only 5 percent of the rural population has access to electricity, the Menengai geothermal energy project will enable a 26 percent increase in production capacity by 2018. This additional reliable, clean and inexpensive electricity will meet the needs of 500,000 new households and 300,000 small businesses and will provide 1,000GWh to industries. AfDB’s support for South Africa’s national electricity utility, Eskom, in implementing a $1.3 billion renewable energy project is introducing concentrated solar power to sub-Saharan Africa and the first utility-scale wind power plant to South Africa (100MW each). Source: AfDB Staff Project Examples 2: Strengthening productivity and food security through sustainable land and water management Drier agro-ecological conditions in the Gambia have led to declining productivity in arable areas where major food crops are grown. By investing in a system for improved soil and water management (PIWAMP), the AfDB has contributed to a six-fold increase in total crop production in the project area—from 4,000 to 25,000 metric tons a year between 2006-2010. Source: AfDB Staff Funds Adaptation Fund Africa Fertiliser Financing Mechanism (AFFM) African Water Facility (AWF) Climate Investment Funds (CIF) Fund for African Private Sector Assistance (FAPA) NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF) Rural Water Supply and Sanitation Initiative (RWSSI): ClimDev-Africa Special Fund (CDSF) Congo Basin Forest Fund (CBFF) Sustainable Energy Fund for Africa (SEFA) Concluding Remarks Green growth is not a departure from sustainable development, but reinforces the need to address the social, economic and environmental dimensions of development; Green growth places further emphasis on growth as a central driver of development, while focusing on the most environmentally sustainable options; It requires sustained political commitment, better valuation of natural and social assets in decisionmaking processes, and removing market distortions; Concluding Remarks (2) Green Growth strategies need to be tailored to the development context of a country; While not every puzzle piece in a country’s economic picture can be green, over time the pieces can come together to create a green picture; AfDB stands ready to assist its Regional Member Countries in developing Green Growth Strategies, securing financing and technical assistance. Thank you. Merci. The AfDB’s strategic work on Green Growth is carried out by a crosssectoral team. Co-chairs are: • Mr. Aly Abou-Sabaa, Director and Chair of the Climate Change Coordination Committee • Mrs. Hela Cheikhrouhou, Director of the Energy, Environment and Climate Change Department For further information and feed-back, please contact: Frank Sperling, Green Growth Team Leader, [email protected] The views expressed in this presentation do not necessarily reflect the views and policies of the African Development Bank (AfDB) or its Board of Governors or its Board of Directors or the governments they represent.