Building and nurturing a sustainable economy has been a global concern for years. All first-world to third-world continents, including Africa, recognise the opportunity and urgency of being part of the solution.
That starts with implementing projects and programmes aimed at addressing the transition to low-carbon economies.
What is a low-carbon economy
In any context, the answer to this question remains the same; what does a low carbon economy look like? It’s an economy that uses power primarily derived from less carbon-intensive energy sources such as solar, wind and hydroelectric power. Using these sources reduces greenhouse gas emissions (GHGs) typically created by carbon-intensive sources such as fossil fuels and coal.
Such change will help lessen the impact of climate change and global warming on the environment, and ultimately, the wider population.
Low-carbon economy challenges
According to this report, the consensus to limit global warming to 2ºC, which is necessary to prevent the catastrophic impact of climate change, requires that the atmospheric concentration of GHG does not exceed 450 ppm CO2 for E5. “To stay within this ‘carbon budget’ in a world projected to support 9.2 billion people by 2050, annual average per capita emissions will need to converge at 2.1 to 2.6 tonnes CO2 emissions by mid-century.” Although the carbon footprint of an average African country, specifically the sub-Saharan African region, is the lowest in the world, it is still slightly above this level, at 2.7 or 3.9 tonnes CO2 emissions.
This calls for urgent measures to reduce GHG emissions and meet the requirements stipulated in the Paris Agreement. However, two of the greatest challenges that Africa is facing include the lack of infrastructure and the investments to channel towards the development of infrastructure necessary to drive a sustainable transition. Access to these resources is crucial in the process of tackling the climate change crisis in Africa.
However, through a cross-sector collaboration on national and international levels and frameworks that prioritise low-carbon productivity and trade, the transition can be successful.
DBSA’s role in low-carbon economy transition
The Development Bank of Southern Africa is a development finance institution committed to achieving its mandate of promoting inclusive and sustainable economic development, growth and regional integration through infrastructure finance and development that improves the quality of life for people in Africa. A just transition to a low-carbon economy forms part of our strategies to make this a reality for Africans.
This report cites a senior economist who explains the current frameworks of the policies used in other parts of the world to move towards a low-carbon economy. “One way of looking at the policy interventions that support a just transition to a low-carbon economy is to consider them in terms of procedural justice (making sure there is a just and inclusive process), distributive justice (how to deal with the impact of a change like job losses, asking who will pay and who will benefit) or restorative justice (looking at future damage and trying to right historical damage and inequality).”
In our capacity as the DBSA, we follow a framework that will ensure that the socio-economic transition from resource-dependent fossil fuel economies to low-carbon and green economies is equitable and just. We do this by continuously engaging with financial institutions and the market to develop financial instruments that enable investments for various projects aimed at the development of necessary infrastructure for the transition. Through our renewable energy funding structures and infrastructure planning support, we have, thus far, played a significant role in the process of financing the implementation of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP). We have collaborated with the Department of Environment, Forestry and Fisheries for the Global Environment Facility (GEF). We’re also serving as an accredited entity for the Green Climate Fund (GCF) and the Embedded Generation Investment Programme (EGIP), which are designed to support development and financing to municipalities impacted by the transition to a low-carbon economy.
While Africa is not where it should be, in comparison to other continents worldwide, various stakeholders are making strides to ensure that a low-carbon economy becomes a reality in Africa. The DBSA will continue to play a catalytic role in driving a just transition