In August, Boston Consulting Group (BCG) was named the exclusive consulting partner for COP27.
BGG is an American global management consulting firm that advises companies and governments around the world on climate adaptation and resilience, key priorities for COP27.
We spoke to Katie Hill, partner and associate director for climate at BCG in Nairobi on the company’s involvement in the conference, what that means for Africa and how it stands to gain from the event that is being hosted on the continent for the first time since 2016, when it was held in Marrakech, Morocco.
There has been excitement about COP27 being hosted in Africa. How important is this to the continent? What positive impact is it likely to bring?
The fact that COP27 is being hosted in Africa is important. This COP will have a very strong focus on turning the pledges of COP26 into actions at COP27, and hosting the conference in Africa will help focus minds on finding climate and sustainability solutions that work for all nations.
Historically, COPs have been oriented around climate mitigation and driving down emissions from wealthy countries. Hosting a COP in Africa, the most vulnerable region to climate change, allows a magnified focus on climate justice to ensure economic development is equally valued in global decarbonization and the necessary adaptation and resilience (A&R) improvements to support the African continent in the coming decades.
An increase in funding for A&R projects would bring enormous positive impact as it could make the social, economic, and natural systems on the African continent more resilient to climate change and position Africa to avoid or limit the potentially massive humanitarian and economic issues in the future.
In addition, there is already tremendous climate innovation happening across the African continent. When we analysed the investment portfolios of around 90 large investors in Africa, we identified over 500 companies operating in agriculture, energy, materials, mobility, supply chain and nature-based solutions.
Their number has grown over time and over the last 15 years, there’s been a 300 per cent increase in the number of green ventures across the continent. COP27 presents great opportunities for these ventures to gain visibility and seek funding for scale.
What issues do you expect to be prioritised during COP27 and what is their significance for Africa and specifically Kenya?
Given this is the first COP in Africa since Marrakech in 2016, we expect climate justice (e.g., Just Energy Transition showcasing success stories of transitions from Africa and beyond) and A&R to feature prominently.
What is the top imperative today for African governments as far as climate change is concerned?
First, it is crucial for African governments to invest in more resilient food systems. The impacts of climate change on Africa’s food security are accelerating and further exacerbated by the acute grain and fertiliser shortage, which is in part caused by Russia’s invasion of Ukraine. This is likely the single most important climate challenge, primarily within A&R, that African governments should prioritise.
Kenya is already experiencing major impacts of climate change in the form of drought and unpredictable weather patterns that could result in major food shortages, and does not have the capital or resources to adequately fund large-scale A&R projects. Therefore, the issues that should be prioritised at this COP orient around driving sufficient funding for A&R projects into the highly susceptible regions in Africa and across the developing world.
Though Africa contributes the least to the climate crisis, countries on the continent stand to be most gravely impacted by the negative impacts of climate change. Against this backdrop, what issues should African leaders be addressing during the conference?
African leaders should be addressing the inequity in the negative impacts of climate change. Historic funding from rich countries has consistently fell short of agreed-upon goals – in 2009, wealthy countries committed to $100 billion in annual funding for the developing world by 2020. As of 2020, funding was $80 billion and the imperative for solutions and funding has increased – and falls significantly short of the considerable investment needed to sufficiently fund A&R projects. GCA-CPI estimates that Africa needs $331 billion in A&R funding through 2030, while wealthy countries are expected to contribute only $66 billion.
This will be most effective if African countries have done the research and analysis to identify projects and interventions needed.
For example, BCG has been supporting Lagos state in Nigeria to develop its comprehensive A&R plan, which enables foreign funders to quickly step in and finance key initiatives to protect Lagos citizens from the worst effects of climate change.
In addition to A&R funding, African governments and leaders should focus on building funding for loss and damages. Already across the continent we are seeing impacts from drought and floods, and rich countries have a responsibility to aid in covering the cost of these damages for developing economies.
African leaders should also push the significant green economic growth potential of the continent. Globally, the new green economy creates a number of opportunities for African countries to be a global exporter of renewable energy, green hydrogen and its derivatives, organic products, and carbon sequestration.
We need to take advantage of Africa’s assets – be they natural resources or talent – and adapt traditional industries to respond to the unique circumstances at hand. The region can now create new local industries that couldn’t exist a decade ago.
Do you think African countries’ demands, especially when it comes to climate change financing, will be honoured this time round? If not, what will it take for them to be taken seriously in the future?
We don’t have a strong historical precedent of honouring pledges of climate change financing to Africa. As the climate crisis moves more into mainstream focus (with record setting heat in Europe, historic droughts in China, and catastrophic flooding in Pakistan), one would hope that these funding pledges will be more stringently adhered to.
For these pledges and demands to be honoured in the future, it would take either strict enforcement from governing bodies like the United Nations and the European Union or the development of a cost-reflective carbon tax/price to increase the economic and business case for financing climate-smart projects in Africa. Further, we cannot expect African countries to uphold their pledges if the industrialised countries that are historically responsible are not doing the same. It’s imperative that the wealthier nations lead on honouring their commitments.
Pundits have assented to the fact that progress across a broad agenda was witnessed at COP26, but still more needs to be done. What more needs to be done?
Governments and companies have to deliver solid action plans that turn their existing commitments into tangible actions that will help to tackle climate change.
After COP27, what next for Africa?
In that context, at COP Africa must advance three concepts: First, that Africa will continue on a development path but in a sustainable way; second, that the continent must leverage its abundant natural resources and talent to make the green economy part of its growth and development story; and, third, that climate justice demands that the industrialised nations responsible for climate change must bear responsibility for the adaptation, resilience and loss funding required to protect the continent from the worst consequences of climate change. BY DAILY NATION