Speech by Achim Steiner in Kigali 21 May

Remarks by Achim Steiner, UN Under-Secretary General and UN Environment Programme (UNEP) Executive Director

High Level Forum on Financing for Development

Overall Conference Theme: "Climate Change: Financing Opportunities and Challenges to Achieve the Millennium Development Goals in Africa"

Kigali, 21 May 2009 - Honorable Ministers, Distinguished Delegates, Ladies and Gentlemen,

Much of the discourse surrounding climate change and Africa is replete with negative rather than positive charges.

There are sound and solid reasons for this?the science is ever more sobering from more intense droughts and floods with perhaps up to 250 million people exposed to increased water stress in just over a decade.

- The spread into highland areas, including here in Rwanda as well as for example Ethiopia, Burundi and Kenya of diseases such as malaria that are currently malaria-free.

- Perhaps 70 million people and a third of Africa's coastline, infrastructure and crops such as mangoes and cashews at risk from sea level rise and storm surges.

- Agricultural yields of food staples generally could decrease by as much as 50 per cent by 2050.

- Twenty five per cent to 40 per cent of mammal species could become endangered or extinct by 2080 while 5,000 plant species could face a substantial contraction of their growing ranges by 2085

It is clear that the economic and social consequences are potentially profound and should in no way be diminished.

Managing climate risk is managing economic risk - Climate-Proofing

Urgent action is certainly needed to climate-proof vulnerable communities and economies and to assist in adapt ting key productive sectors.

Multi million dollar infrastructure investment decisions are being made right now on roads to reservoirs based

However these are largely based on historical rather than future climatic patterns- some of may already be being constructed in the wrong place or be the less than perfect option in a climate-constrained world.

The 2007 reports and forecasts of the Intergovernmental Panel on Climate Change, established by UNEP and the World Meteorological Organization, are not only being rapidly over taken by the latest science.

The scientific models tend to be global and regional rather than user-friendly at the level of national decision-making.

I have made it a key focus of UNEP's early warning and assessment work to boil down the climate science to a country-level.

This is assistance that environment ministers in Africa have asked for as key to improved investment choices that reflect the future rather than the certainties of the past.

So that a road with an anticipated life span of 20-30-40 years is not simply washed away in 15 years.

So that a decision to build a reservoir does not lead to a costly white elephant because the rainfalls and river flows of the next few decades are far less than the ones upon which the project was predicated.

Certainly adaptive measures can be taken which support not only climate-proofing economies but the development agenda and the MDGs.

I was delighted to Dr Baglis Osman of the Sudan as one of your speakers.

She is not only a UNEP Champion of the Earth award winner but a researcher at the centre of testing adaptive strategies in her native Sudan that have improved livelihoods and food security..

This was as part of a $9 million UNEP/ Global Environment Facility project- Assessment of Impacts and Adaptation to Climate Change or AIACC-in which 350 scientists carried out 24 case studies eleven of which were in Africa.

The time has come to make a real and serious transformative step forward here.

UNEP is assisting to spearhead with partners a Global Adaptation Network with a key focus on Africa.

Support for this, along with serious funding for an adaptation fund that must be taken forward at the crucial UN climate convention meeting in Copenhagen in December, will be a litmus of the international communities determination to assist Africa.

Part of the response must be improved weather forecasting, and acting on that forecasting - investments are urgently needed here and Africa's finance ministers have a key stake in seeing this happen.

A recent study by the UK overseas development arm, DIFID, found that a country like Kenya on average experiences a flood costing about 5.5 per cent of GDP every seven years.

And a drought costing eight per cent of GDP every five years.

These do not just impact agriculture and livestock.

The 1999/2000 La Nina-related drought also hit the hydro-electric power generation, tourism and forestry sectors to name but a few with total costs estimated by the World Bank to have been around USD 3.2 billion.

So honourable ministers,

climate risk is an economic risk and minimizing that risk needs to be at the centre of Africa and the international community's strategies.

Climate Change as an Opportunity - Access to Energy, A Green Economy?

But as I alluded to in my opening remarks, I would like to focus as much on the opportunities as the challenges.

Climate change could seriously undermine attempts to meet the MDGs and beyond.

But could it also be the spark for a new kind of development path based on more resource efficient, low carbon strategies if only the market and market signals can be tuned?

Could climate change assist in accelerating a transition to a Green Economy in Africa?

One that deals with multiple challenges from boosting access to electricity to job creation and food security up to reducing desertification and boosting water supplies?

Let me turn to energy first.

Iceland may seem a long way from Africa, but it is worth mentioning that northern European state.

During the oil crisis of the late 1970s-early 1980s Iceland?totally dependent on oil imports having no oil of its own, no gas and very little biomass - made a deliberate decision to harness the resources it had in abundance, but which had up till then been largely ignored.

These honourable ministers are volcanoes - and today Iceland's electricity generation is not far from 100 per cent a mixture of geothermal and hydro-electricity.

Africa is a Continent blessed with renewables - from large quantities of solar radiation to wind.

We carry out such surveys - solar and wind energy resource assessments - as one way of overcoming the investment hurdles to renewable energy.

Wind

Some 300 MW of wind are currently being installed in northern Kenya.

New figures for Ghana for example estimate that there is 100 square Km of real good windy areas already within 25km of roads and transmission lines and outside protected areas.

500MW of turbines could be installed providing 10 per cent of the country's electricity - this is larger than previously thought.

Locally is could serve 500,000 homes for lighting and refrigeration.

Interestingly, the higher wind speeds have been linked with times of drought in the Volta River reservoir.

In other words developing wind would also be a key adaptation measures to climate change.

A similar phenomenon has been observed in Brazil, Central America, Eastern Africa and north east China.

Geothermal

The Great Rift Valley, which runs through Rwanda as far north as Yemen, along with other young geological formations in Africa has potentially 7,000MW of untapped energy.

Kenya has had a small geothermal power station operating there for over 20 years with over 90 per cent reliability.

As we speak, 35 Mw of new electricity is being added and Kenya has plans to generate 1,300MW of geothermal electricity by around 2020.

Instead of building a grid from a large thermal power plant out into the rural areas and urban conurbations, renewable offer a chance to build the grid up from the village out.

There are also jobs to consider.

UNEP, along with the International Labour Organization, trades unions and employers bodies, recently published its Green Jobs report.

Employment in alternative energies may rise to 2.1 million in wind and 6.3 million in solar Photo Voltaics by 2030.

Why could not a large number of these jobs be on this Continent?

Biomass

12 million could be employed in biomass and biomass related industries.

In Nigeria, a biofuels industry based on cassava and sugar can crops might sustain and industry employing 200,000 says the study.

There has been some controversy surrounding biofuels in recent years - sustainability criteria are urgently needed.

But perhaps there is little controversy about harnessing wastes.

Currently Rwanda, Tanzania and Burundi are among the biggest banana producers yet more than 80 per cent of current energy needs are met by wood.

Scientists at Nottingham University in the UK have developed a simple way of turning waste banana skins into briquettes for cooking, lighting and heating which was inspired by a visit to Rwanda

There are many many more examples starting to emerge from projects to harness the methane gas in Lake Kivu to turning waste gases from rubbish tips, such as one in Durban, South Africa, into electricity.

Climate Change and the Carbon Markets - the Driver

The question is why it has taken so long.

The urgency of climate change is one of the key drivers here.

The need for the developed economies to cut emissions in part by offsetting the pollution via cleaner energy projects in developing economies.

Allied to the emergence of the facilitating UN-carbon markets and the Clean Development Mechanism (CDM).

UNEP's Risoe energy centre in Denmark, which tracks CDM projects, now estimates that there are 100 of these approved or close to approval in Africa.

Until recently Africa was missing out.

Many of these wind power projects to ones that switch power stations from coal to say cleaner natural gas, were being backed in the rapidly developing economies: for example Brazil, China, India and Mexico.

Only South Africa was to an extent accessing these carbon markets and perhaps a few North African countries such as Egypt.

The latest figures show a total of 21 African countries are now involved ranging from a project to harvest the gases that in the past have been flared and wasted in an oil installation in the Democratic Republic of Congo at Libwa, Tshiala.

- A reforestation project using native species in Maringa-Lopori-Wamba region - known as the Bonobo Peace Forest.

- A run of river project - the Sahavinotry Hydro Plant - in Madagascar that could generate 15MW of electricity and save nearly 50 kilo-tonnes equivalent of CO2 annually.

- A 35MW sugar cane waste into energy project - so called biogases - in western Kenya.

- A 62 MW run of river hydro project in Mali, the Felou project in the Kayes region.

The UNEP survey estimates that carbon credit flows to Africa from all current schemes will eventually worth just under $300 million.

Africa-wide, some 260 CDM projects could be up and running or in the pipeline by 2012 triggering close to $1 billion in carbon credits.

The possibilities do not end there - Reduced Emission from Deforestation and Forest Degradation

In December 2009, at the crucial UN climate convention meeting in Copenhagen, Denmark, nations may decide to also pay to tropically-forested countries for maintaining standing forests under a scheme known as Reduced Emissions from Deforestation and forest Degradation (REDD).

This is because up to 20 per cent of the greenhouse gas emissions linked with climate change is coming from deforestation?more than from cars, trucks, planes and ships combined.

UNEP, along with the Food and Agricultural Organization and the UN Development Programme, is working with nine developing nations including the Democratic Republic of Congo, Tanzania, Papua New Guinea and Panama in preparation for the inclusion of REDD in a future agreement on climate change in Copenhagen.

By some estimates a country like Indonesia, for example, could earn $1 billion a year if it manages to reduce its rate of deforestation by one million hectares annually, with revenues calculated on the basis of the price per tonne on the carbon markets at the time.

If REDD is agreed as part of a post-2012 climate regime, this could open the door to carbon storage payments for other kinds of nature-based management covering 'ecosystems' such as grasslands, pasturelands, peatlands and mangroves.

Carbon Farming

We have just launched a project to take this forward.

Village communities in Western Kenya alongside ones in Niger, Nigeria and China could become the key to unlocking the multi-billion dollar carbon markets for millions of farmers, foresters and conservationists across the developing world.

They have been chosen as a test-bed for calculating how much carbon can be stored in trees and soils when the land is managed in a sustainable, climate-friendly ways.

The initiative, known as the Carbon Benefits Project, was launched today by the UN Environment Programme (UNEP), the World Agroforestry Centre, along with a range of other key partners. The project is being funded by the Global Environment Facility.

Instead of developed economies investing billions in capturing and storing carbon from power stations in the ground, Africa's natural and nature-based assets could be doing the same job?with multiple benefits in terms of water supplies, biodiversity and conservation-related jobs.

Benefits too in terms of soil stabilization services provided by forests and vegetation?a country like Kenya loses in terms of economic value more soil every year into Lake Victoria or to the sea than it generates in tourism, its main foreign exchange earner.

The Catalyzing Roles of Africa's Finance Minister - the Role of the International Community

As finance ministers, the question perhaps to address is how these developments can be taken further and faster.

Meanwhile, the question before the international community, including the UN and its environment programme is how can we assist in ensuring that it is not just 21 countries in Africa that are accessing the CDM, but all countries.

Market Instruments

Firstly, smart market mechanisms and financial instruments - if you look at Germany or Spain, one decision among several sparked a dramatic boost of renewable energy and renewable energy industries including an export industry.

That was a feed-in tariff - essentially the governments required power companies to buy in clean energy including small-scale generation from households.

In India, UNEP worked with two banks and with funding from the UN Foundation and others, bought down the cost of solar loans.

Over just a couple of years, 100,000 rural Indians got solar power. The scheme is now self-financing over 20 banks involved.

Why cannot the international community, Africa finance ministers and banks on the Continent deliver a similar solar revolution?

Levies, Taxes and Subsidies

There is also a great deal that can be done with taxation?such as lower VAT on energy savings devices and clean energy equipment and subsidies- such as ones on fossil fuel.

Globally around $300 billion or 0.7 per cent of global GDP is being spent on energy subsidies annually much of which is in developing economies.

The lion's share is being used to artificially lower or reduce the real price of fuels like oil, coal and gas or electricity generated from such fossil fuels.

Cancelling these subsidies might reduce greenhouse gas emissions by as much as six per cent a year while contributing 0.1 per cent to global GDP.

The overwhelming evidence is that, while politically they may appear like pro-poor policies, the reality is different and is a cost rather than a benefit to the economy.

Indeed in many developing countries the real beneficiaries of such subsidies are neither the poor nor the environment but well off households; equipment manufacturers and the producers of the fuels.

Scrapping or phasing-out such subsidies would liberate funds for clean energy investments or ones in other MDG related areas such as water which have a high rate of return.

A recent UNEP-led policy brief on a Global Green New Deal says:-

An investment of $15 billion a year towards meeting the MDG of halving by 2015 the number of people without sustainable access to safe water and basic sanitation could generate global economic benefits worth $38 billion annually-$15 billion of which would be in sub-Saharan Africa alone.

If Africa's finance ministers consider fuel subsidies, then developed country finance ministers might consider a levy on oil.

If, for argument's sake, you were to put a five-year levy in OECD countries of $5 a barrel, you would generate $100 billion per annum?the kind of sums that might assist in bringing developed and developing economies together in Copenhagen.

Consumers would hardly notice this at the pumps especially after oil prices have jumped to close to $150 a barrel and are now in the $40 range.

Reforming the CDM is also something that is gaining a head of steam.

Too often large project in the bigger developing economies win through.

One step forward is to bundle projects so that, say a wind resource in Chad and one in Togo, is combined into a single large-scale one attractive to international investors.

There was once the absurdity that installing thousands of solar water heaters in South Africa informal settlements was considered as several thousand individual projects - that is changing: the international community is learning.

There is also the possibly of bundling projects city-wide in a city like say Kigali so that all the emissions savings linked with more sustainable transport, power, heating and air conditioning can be part of a single proposal.

Building the capacity of governments to write winning CDM proposals is also underway and needs accelerating.

Seal the Deal in Copenhagen

Crucial to any sharp rise in such projects, and the opportunities for using nature to sequestrate carbon, will be the sealing of a scientifically credible, decisive and equitable new deal when over 190 countries gather in Copenhagen, Denmark in December for the crucial UN climate Convention meeting.

It is clearly in Africa's interests. The more emissions developed economies have to cut, the more scope for CDM projects and the higher the price of carbon and thus financial flows.

Backed by market signals, enabling market conditions and in Copenhagen?support by finance ministers for Africa's environment ministers and national negotiators?I believe there is a chance for this Continent to glimpse a transition to a Green Economy.

According to some estimates, there is enough solar radiation hitting deserts over an area of 800 km by 800 km to power the entire planet.

Harnessing just a fraction of this could generate whole new economy.

A recent survey by UNEP and partners found that a country like Kenya has just over 32 Giga watts of wind power potential - that is wind with speeds of seven metres a second or more.

32 Giga watts is not only a domestic but an export opportunity.

Perhaps the next gold rush will be not in the American Klondike but in the Sahara or in the Rwanda's mountains and hills or in the DRC of Senegal.

Harvesting here not just precious metals.

But precious profits from solar, wind and farming carbon into Africa's abundant and rich vegetation as part of an international response to climate change - as part of Africa's national economic and sustainable development needs too.


 

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