A new climate for African water finance
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Accessing funding to adapt Africa’s water infrastructure to take account of climate change is far from straightforward. James Winpenny of Wychwood Economic Consulting considers the options.
At a meeting in Pretoria at the end of January convened by the Global Water Partnership, African water practitioners advanced the debate on how the continent’s water sector might need to adapt to future climate change, and how the required changes could be funded.
The cost of achieving “water security” in Africa has been assessed at about $50 billion a year up to 2030, plus up to $8 billion more in annual recurrent costs. The extra expense involved in adapting water infrastructure and services for climate resilience in sub-Saharan Africa could add a further $12 billion annually up to 2050. Much of the latter would be necessary under any climate scenario, since it would be dealing with climatic variability that is already happening in the form of droughts, floods and other extreme weather events.
How can these sums be raised? A number of specialised climate funds already exist, but their focus tends to be on climate change mitigation, aimed at reducing greenhouse gas (GHG) emissions through greater energy efficiency. Africa, and specifically its water sector, is not a major source of GHGs, although it could contribute by improving its poor energy efficiency. Hence the main focus of African policy-makers is on tapping finance for the adaptation of infrastructure and operating systems to reduce their exposure to the risks posed by climate change.
This will not be easy. Firstly, as noted, existing climate funds are biased towards mitigation. Secondly, the main funding source for adaptation, the Adaptation Fund under the Kyoto Protocol, which is fed by a levy on the Clean Development Mechanism, the EU’s Emissions Trading Scheme and other sources, is rapidly drying up. Thirdly, the Great Hope of developing countries, the Green Climate Fund – made only stuttering progress at last year’s Doha climate summit, and is unlikely to yield serious money for some years yet.
A pragmatic solution may yet emerge. African countries are starting to focus on so-called ‘no regret’ water projects – those which are justified whether or not future climate change comes about. Examples include urban drainage, flood defences, water demand management, more efficient irrigation and diversified farming systems. Many of these would be required to cope with existing climate variability, even if the climate doomsayers are wrong.
There are a number of climate funds that could fund such projects, and there are also several donor-funded services which can advise on funding sources – including most of the mainstream development agencies. Meanwhile, the UN climate talks in Doha recognised the “loss and damage” that arises from climate impacts when mitigation and adaptation efforts have failed.
It was agreed that countries thus affected should be compensated, although the discussion continues on where the funding for this should come from.