Billions needed to prepare Africa’s cities for climate change -Group
Billions needed to prepare Africa’s cities for climate change -Group

Agency Report

Climate Change. File photo

A report distributed by FSD Africa states that Africa has a unique opportunity to address both the threat from climate change and to tackle the urban sprawl associated with rapid urbanisation.

Based on analysis of cities in three countries — Ethiopia, South Africa and Kenya, which, combined, represent 18 percent of Africa’s urban population — the report estimates that the greening of the continent’s cities could produce huge economic dividends for Africa over the next three decades, running into the hundreds of billions of dollars.

The report, which is being launched at Africa Climate Week by FSD Africa and the Coalition for Urban Transitions, a global initiative managed by C40 Cities and the World Resources Institute, proposes a new model for urban growth in Africa that emphasises compact neighbourhood development, connected infrastructure, clean technologies, and climate resilient planning.

Doing so will create hundreds of thousands of jobs, improve health, reduce pollution, and raise productivity across the continent, while at the same time reducing carbon emissions and making cities more resilient to the impact of rising temperatures.

Economic analysis commissioned for the report shows that across the 35 major cities in the three countries, delivering more compact, clean, and connected development would require additional investment of $280 billion but produce a return of more than four times that with total benefits worth $1.1 trillion by 2050, equivalent to $330 billion in today’s terms (Net Present Value).

The benefits include energy savings and other avoided costs such as reduced vehicle costs and material costs for construction together with the creation of 400,000 additional jobs.

African cities are currently experiencing the fastest growth rate in the world and are expected to see their population double over the next forty years. However, 79 of the continent’s fastest growing urban areas are at extreme risk from climate change. This risk could be exacerbated if African nations lock in a pathway to economic development that involves high levels of emissions. If all inhabitants of African countries raised their emissions intensity to match the continent’s most intense emitter, South Africa, it would be enough to raise global temperatures by 1°C.

To deliver compact, connected, and clean urban development, cities in Ethiopia, Kenya, and South Africa would require additional investment of $42 billion, $27 billion, and $215 billion respectively by 2050. The report warns that the capacity of city authorities to meet this requirement is limited by budgetary constraints, high debt levels, unstable interest rates, and a lack of creditworthiness. This is coupled with a lack of regulatory assistance, inefficient revenue collection, and a lack of institutional capacity. Despite these barriers, FSD Africa and CUT argue that the finance required for urban transformation can be unlocked by establishing robust national urban policies, empowering city authorities, rolling out initiatives to improve creditworthiness, and implementing mechanisms that capture increases in land value from infrastructure improvements.

The report also identifies six financial instruments that could be used to mobilise investment in clean urban infrastructure including innovative schemes such as insurance pools to provide infrastructure repairs following extreme weather events and pay-as-you-use subscriptions for cooling buildings. City authorities can also leverage green bonds, public-private partnership, and leasing agreements with utility providers that help mitigate the high up-front cost of green infrastructure.

According to the CEO of FSD Africa, Mark Napier, “Africa’s destiny will be determined by the way its cities develop. With world leaders due to meet at COP26 next month where they will discuss how to mobilise the trillions in private and public sector finance needed to secure global net zero, the positive message from this report is that we already have instruments that can deliver the massive investment that our cities need if they are to develop in a sustainable way and thrive. We firmly believe that with well-structured green investment it is possible to deliver both environmental benefits and strong economic growth at the same time.”

Also speaking, Director of the Coalition for Urban Transitions, Nick Godfrey, said, “National governments that grasp the urgency of the challenges facing African cities and respond with strong leadership will be well placed to unlock green investment. Whilst the scale of the investment needed is significant, the economic dividends are far greater and there are existing mechanisms capable of financing a more sustainable, healthier and prosperous urban future across Africa.”

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