Can COP 28 deliver on climate finance?
The United Arab Emirates (UAE) has indicated its intention to prioritize climate finance at the upcoming United Nations Climate Conference (COP 28) in Dubai.
The goal of UAE is to announce a clearer pathway on making climate finance accessible, affordable, and available to developing countries at the end of the COP.
Climate finance as widely acknowledged is a critical enabler of climate action, particularly for developing economies. Without the appropriate inflows of climate finance, many developing countries cannot build resilient economies and infrastructure to adapt to climate change while also building low carbon economies to contribute to global efforts to mitigate climate impacts.
Africa for instance has abundant solar, wind, and other renewable energy resources. The continent is rich in several commodities needed for the energy transition. With a growing economy and a highly projected future energy demand, Africa is strategically positioned to play a pivotal role in mitigating climate change, rather than adding to the climate crisis through more fossil fuel combustion.
While African countries prefer to avoid greenhouse gas emissions as catalogued in their Nationally Determined Contributions (NDCs), the continent is saddled with undelivered climate finance pledges, low renewable energy private investments, and high economic debts. These prevent African economies from effectively contributing to climate change mitigation. Nonetheless, the experiences of countries such as Morocco and Kenya in leapfrogging to greener electricity technologies are indictive that African countries can provide a global policy and institutional pathway for emission reductions with the right capital and climate finance inflows.
Morocco
Morocco has emerged as a global front-runner for the energy transition. The country is home to the Noor Ouarzazate Solar Complex, the world’s largest concentrated solar farm. Renewable energy makes up about 37 percent of Morocco’s electricity generation with the country being on track to meet its ambitious policy commitment to generate 52 percent of electricity from clean energy sources by 2030.
Deployment of renewable energy in Morocco is managed through a robust institutional framework led by the Moroccan Agency for Sustainable Energy (MASEN). MASEN provides a ‘one stop management hub’ for permitting, financing, land acquisition, and securing state guarantee for renewable energy investments. MASEN’s operations are enhanced by the work of the Moroccan Agency for Energy Efficiency (AMEE), Energy Investment Company (SIE), and the Research Institute on Renewable Energy (IRESEN).
This robust institutional framework which symbolizes the country’s commitment to a clean energy transition is supported by a set of coherent policy, regulatory, and legal framework including the 2009 National Energy Strategy, Law No. 13-09, Law No. 58-15, and Law No. 40-19, among others.
Kenya
With a national ambition to generate 100 percent electricity from renewable energy by 2030, Kenya has achieved remarkable successes in utilizing its geothermal resources. Kenya is also home to the biggest windfarm in Africa, the 310MW Lake Turkana Wind Farm. Renewable energy including hydro makes up about 78 percent of Kenya’s electricity generation. Geothermal accounts for about 40 percent of its clean energy portfolio. Kenya is also the world’s seventh largest geothermal power producer. Kenya will rank fourth on the global list of geothermal users behind the United States, Indonesia, and Philippines once all geothermal projects currently under construction are completed.
A key institutional innovation in Kenya’s clean energy deployment is the business model pioneered by the Geothermal Development Company (GDC). GDC as a state-owned business acts as a special purpose vehicle to fast track the development of the country’s geothermal resources. The company carries out early-stage exploration, drilling of identified geothermal resources, and then sells the proven steam resources to private power producers. This model shifts exploration risks away from investors, giving investors maximum confidence in investing in Kenya’s geothermal energy. Kenya’s clean energy exploits are backed by a set of policy, regulatory, and legal framework including Vision 2030, the 2018 National Energy Policy, the Energy Act, 2019, the Geothermal Resources Act, and the 2023 Energy White Paper.
African leaders through the Nairobi Declaration have called for a new financing architecture that will be responsive to Africa’s needs including debt restructuring and relief, and the development of a new Global Climate Finance Charter by 2025. This concise call by African governments is now, more than ever justified and timely as countries on the continent have proven to be climate proactive with scalable climate mitigation successes, despite the failures of the current climate finance system.
Having indicated climate finance as a priority, the UAE COP presidency must at least guide countries to set a new and a robust climate finance goal, with a clear and predictable roadmap on how amounts will be delivered, types of adaptation and mitigation projects to be funded, as well as a measurable monitoring, evaluation, and tracking metric. A successful COP 28 will largely depend on the adoption of a concrete roadmap to accelerate climate action in light of the UN’s global stocktake synthesis report vis a vis progress to be made with a new climate finance goal, as well as a formal endorsement of the tentative agreement to establish a Loss and Damage Fund. Is the UAE poised to achieve these at COP 28?
NB: Seth Owusu-Mante is a Pre-Doctoral Research Fellow at the Climate Policy Lab, The Fletcher School, Tufts University.