Brief highlights of background papers for African Ministers Conference on Financing for Development This summary provides highlights of the key issues covered by the backing papers to the Kigali conference (May 21-22 2009). Papers are just a sample of the many that are available to give conference participants a fair background around the session themes, and is therefore does not exhaust all the relevant literature on the issues that will be discussed. The highlights do not provide a critical analysis of the papers. While we have attempted to group the background papers by session themes, several of the papers cover issues in more than just the theme they have been put in. Session 2. Impacts of climate change on economic growth and progress towards the targets of the Millenium Development Goals
1. Africa Partnership Forum (2008): Climate Change Impacts on the Progress towards and the Sustainability of MDG Achievement across Africa Based on current climate variability evidence across Africa, the background paper argues that the MDGs most susceptible to direct climate change impacts are: MDG 7 particularly increased access to potable water, MDG 1 progress on food security, and MDG 6 in respect of prevalence and death rates associated with malaria. 2. IIED (2007): The economic impact of climate change in Namibia: How climate change will affect the contribution of Namibia’s natural resources to its economy Research suggests the impacts on natural resources could reduce Namibia’s GDP by up to 6 per cent. The need to mainstream climate change into national policies and planning is clear, not least because the poor will be most affected by the impacts of climate change, with resulting constraints on employment opportunities and declining wages, especially for unskilled labour. 3. J. TURPIE, H. WINKLER, R. SPALDING-FECHER & G. MIDGLEY –University of Cape Town (2002): Economic Impacts of Climate Change in South Africa: A Preliminary Analysis of Unmitigated Damage Costs A preliminary estimate of the economic impacts of climate change in South Africa shows that the greatest potential impact is that of a decrease in tourism income, as well as the existence value of biodiversity, the subsistence use of natural resources and the impacts on human health. 4. Africa Partnership Forum Briefing Paper No. 1 (2007): Climate Change and Africa The briefing argues that the focus of efforts needs to be on mainstreaming adaptation in national planning and marshalling support for climate risk management in Africa. However, the continent should also contribute to mitigation efforts and promote clean energy development. 5. Hoare, A., Legge, T., Nussbaum, R., Saunders, J. (2008): Estimating the cost of building capacity in rainforest nations to allow them to participate in a global REDD mechanism. A report for the Eliasch Review by Chattam House, ODI and Ecosecurities. This report provides an estimation of the funds that will be needed to build capacity in 25 rainforest nations to enable them to participate in the proposed REDD mechanism (Reduced Emissions from Deforestation and Forest Degradation). The 8 African countries among these 25 countries are Cameroon, Congo Brazzaville, Democratic Republic of Congo, Equatorial Guinea, Gabon, Ghana, Liberia, Sierra Leone. The potential cost of governance interventions to allow a single country to participate in REDD ranges from $14 million to $92 million, spent over five years 6. Grieg-Gran, M. (2008): The cost of avoiding deforestation: Update report prepared for the Stern Review of the Economics of Climate Change, International Institute for Environment and Development The report provides a global estimate of the cost of cutting the rate of deforestation in half within a decade by cutting deforestation by 100% in 8 countries, which include the 3 African countries of Ghana, Democratic Republic of Congo and Cameroon. The total costs of administering a payment scheme for avoided deforestation in these 8 countries is about $0.5 billion, discounted over 30 years. In the DRC, Cameroon and Ghana, the discounted costs of an administration authority over 30 years reach up to $27 million, $19 million and $10 million respectively. 7. Daniel Zarin (coordinating author) et al. (2009): Reducing Emissions from Deforestation and Forest Degradation (REDD): An Options Assessment Report. Paper prepared for the Norwegian Government by the Meridian Institute, March 2009. This report assesses several important considerations for a future REDD mechanism within the UNFCCC, and strives to clarify and inform some of the critical choices that will need to be made about including REDD in a Copenhagen agreement. It provides a fact-based analysis of options on how to effectively reduce emissions from deforestation and forest degradation and impacts of an agreed mechanism. The paper emphasizes that capturing the mitigation potential of REDD requires a flexible, phased approach to implementation in order to accommodate the diverse capabilities of REDD countries; an expanded scope of REDD to include conservation, sustainable management of forests, and enhancement of forest carbon stocks; and the near-term constraints of the current global financial crisis. 8. Gouvello, Christophe de; Dayo, Felix B.; and Thioye, Massamba (2008): Low-carbon Energy Projects for Development in Sub-Saharan Africa . - Unveiling the Potential, Addressing the Barriers. The World Bank. 9. Greene, William (2005): Carbon finance for Africa - an investors' guide. Africa Practice. There are enormous opportunities for new investments in Clean Development Mechanism projects and voluntary offset projects in Africa. The paper shows how these investments can bring unique economic benefits and heightened profile to project developers and purchasers of African carbon credits.
Session 3: The current financing mechanisms and how to access them 1. African Development Bank (2008): Proposals for a Clean Energy Investment Framework for Africa: Role of the African Development Bank Group As a response to the request of the G-8 for specific proposals to address the inter-related challenges of climate change, the African Development Bank stresses the importance of expanding energy access in Africa. The creation of a multi-donor trust fund on clean energy access and climate adaptation for Africa is proposed. 2. Richard Klein and Persson (2008): Financing adaptation to climate change: Issues and priorities. This paper presents a summary overview of the current state of knowledge and policy initiatives around adaptation and outlines a number of issues that would need to be considered in the negotiation process in terms of current and new funding mechanisms. 3. Africa Partnership Forum (2008): Climate Change in Africa: Commitments by International and African Fora and Performance in Delivering The international community and African governments have agreed to certain commitments and targets to combat the climate change problem in Africa and have taken actions to deliver on those commitments. This paper examines these commitments and targets and investigates what actions have been taken to deliver on their commitments. 4. Africa Partnership Forum (2008): Carbon Finance in Africa: CDM and Carbon-based funding for adaptation Africa’s share of The Clean Development Mechanism (CDM) transactions is relatively low compared to other areas. This paper argues that there is potential for increasing this, as well as potential for generating additional revenue either from the current carbon finance market, or through broader charges, levies or taxes. 5. Muyeye Chambwera with Benito Mueller – IIED Briefing (2008): Fairer flying: an international air travel levy for adaptation An adaptation levy on international air travel could help fill the gap in current international adaptation funding. A small per-trip payment by passengers could contribute US$8 billion to US$10 billion a year towards adaptation. 6. Amjad Abdullah, Richard Muyungi, Bubu Jallow, Mohammed Reazuddin, Mama Konate – IIED Briefing (2009): National adaptation funding: ways forward for the poorest countries To avoid wasting the massive investment in NAPAs so far, it is key for richer nations to give NAPAs the fiscal and institutional support they need. This is the main message of the briefing which calls for further funding and proposes methods of action. 7. Saleemul Huq and Jessica Ayers – IIED Briefing (2008): Adaptation funding and development assistance – some FAQs. Emphasizes how development and climate change are being recognized as intertwined issues. Still, when it comes to adaptation funding, confusion and contention remain over the role of development institutions play. Therefore, the FAQs brief suggests ways for the two activities to support each other in terms of funding. 8. Andrew_Pendleton_and_Simon_Retallack – Institute for Public Policy Research (2009): Fairness_in_Global Climate Change Finance A need for an international arbiter of fairness and good practice is being articulated in this paper. Such a formally mandated body can help both during this year’s negotiations and in post-Copenhagen domestic debates in developed and developing countries alike. 9. The Global Environment Facility (GEF): Financing adaptation action The GEF is a financial mechanism for implementing the international conventions on biodiversity, climate change, and persistent organic pollutants. The GEF is also a financial mechanism for the Convention to Combat Desertification and collaborates closely with 10. Noriko Fujiwara, Anton Georgiev and Christian Egenhofer – Centre for European Policy Studies (2008): Financing Mitigation and Adaptation - Where should the funds come from and how should they be delivered? This paper explores ways of financing mitigation of and adaptation to climate change by asking: Where should the funds come from and how should they be delivered? The authors discuss the need to shift investment patterns and identify possible instruments to assist this process. 11. Porter, Gareth; Bird, Neil; Kaur, Nanki; and Peskett, Leo (2008): New Finance for Climate Change and the Environment. WWF, July 2008. The proliferation of new funds and funding mechanisms over the past year is bringing about major changes in the roles of different funding institutions. In this report it is argued that the changes that are needed cannot be achieved simply by shifting funds for climate and deforestation from the GEF to the World Bank. Both institutions need to make some fundamental changes in the way they operate, and they need to collaborate even more closely than in the past.
Session 4: An emerging African Strategy to generate new, additional and adequate financing during Copenhagen negotiations in December 2009 1. Marthinus van Schalkwyk –AMCEN (2008): Africa’s Climate Roadmap: From Johannesburg through Africa to Copenhagen The author stresses the need for Africa to articulate a common position during the ongoing climate change negotiations for a strengthened international agreement beyond 2012, and to exploit the opportunity to build consensus on the complex issues of climate change and sustainable development for the benefit of the continent. 2. Saleemul Huq –IIED (2009): From Bali to Copenhagen This outline of main events on the road from the COP in Bali to the COP in Copenhagen clarifies the different issues and challenges at stake: from the current adaptation trends to the features of the Adaptation Fund Board. 3. Africa Progress Pannel (2009): Climate Change - A Call to Action for African Finance Ministers The climatic changes in Africa will have a profound impact on the programming of public expenditures as well as revenue generation. So climate change cannot be managed by the Ministries of the Environment alone. African Ministers of Finance and Planning need to take note. 4. Joy Hyvarinen and Mike Shanahan –IIED (2009): An uneven playing field Just like a new deal must be fair and equitable, the negotiations themselves must be so too – which is not the case at the moment, according to the authors. The main argument is that the least developed countries and small island states lose out on the negotiations because of their relatively low number of delegates and good negotiators. Moreover, dedicated funds to support the participation of developing countries in the negotiations are voluntary and under-funded.
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