Ngozi Okonjo-Iweala Just Said Africa Can Lead On Climate Change. Here’s how.

As the  COP 21 climate change conference in Paris comes to a close, global leaders have made significant progress in building a framework to tackle issues related to climate change. However, sourcing funding to combat the effects of global warming remains the biggest issue as leaders from around the world try to find ways to avoid the devastating impacts of climate change on the planet. Developed countries have pledged to reach $100 billion-dollar per year in funding  by the 2020 to aid the mitigation of the phenomenon in poor countries, as well as to provide solutions to the impact on agriculture and health that are already being felt in their parts of the world, but developing country governments and NGOs have stated that the funding commitments do not go far enough. African countries are asking for special funding interventions, as their environments are highly susceptible to the consequences of climate change and their economies will be most affected by the issue.

Ventures Africa spoke to Nigeria’s former Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala who since leaving office has become prominent global voice advocating economic solutions for dealing with the impacts of climate Change.

Ventures Africa (VA): Dr. Okonjo-Iweala, analysts posit that it is quite difficult to ascertain the long-term economic costs of climate change. Do you agree? If so, is it possible for you to give us a short-term projection?

Dr. Ngozi Okonjo-Iweala (NOI): There have been many studies, including by Lord Nick Stern, that have shown that climate change is real and costly, and that if we do not manage to keep the world, not even at 2 degrees, but at 1.5 – because this was the chant in Paris, “1.5 to stay alive” –  some of the countries in Sub-Saharan Africa, and the Pacific rim would sink.

So, the issue the costs have become very prominent, in terms of pollution, which causes a lot of diseases and ill health. Even today in Beijing, the pollution is so high that they have given the highest level of alert. A large number of deaths are caused by pollution and other forms of diseases caused by climate change, loss of productivity of crops and lands, flooding, storms… it’s catastrophic, and many estimates have been given. Therefore, giving an estimation is a very scientific affair, not something someone gets up and projects.

Many years have been spent trying to study this phenomenon and trying to estimate the damage, and if you look at the work done by the new climate economy, you can get various estimates. I’ve just given you one, about how degraded land leads to more damage to the climate, and it’s going to cost $250 billion a year to restore. That’s one kind of estimate that you can get. It’s a very costly phenomenon.

But I think that the essential thing is there are solutions which are being discussed in Paris. First, you have $650 billion a year being spent in fuel subsidies, and fossil fuels contribute to carbon dioxide emission, very heavily. If you were to stop subsidising, it would then help to reduce the amount of carbon emission, and you could even take the $650 billion and invest it in alternative sources of energy, such as renewables, which are friendlier to the climate, and dramatically reduce carbon emission.

In fact, the IMF has estimated that if you take the additional indirect costs of subsidies, that figure of $650 per year becomes $5.4 trillion. So, can you imagine such huge an amount of money that is lost due to this fossil fuels subsidy. I think that this is one area where the world can really make a big difference; phase it out; direct the resources to other alternatives that would actually help to manage climate change, and make the world a safer place to live.

VA: You recently made the opening remarks at the Global Landscapes Forum in Paris at the COP21 in which you emphasized the need for public funding and investments in landscape restoration and conservation. Urbanisation has been named a major source of land degradation, but economists agree that there is a positive connection between urbanisation and economic growth, especially for developing countries. What is your take on the topic? Does this conflict with the agreement that you wish to come to on funding?

NOI: Urbanisation is not necessarily a form of land degradation. I don’t agree with that. I think that if you have a properly planned urbanisation, you can do it without degrading land. The issue is that, very often people migrate to urban land without adequate services, without adequate housing. And then they sometimes convert areas that should not really be used for building housing, into housing and other uses. That is when you begin to get problems with flood, like for example when they settle on the slopes of hills, or on sewer lines, and other areas where they should not.

To avoid that form of land degradation, you have to plan ahead. But urbanisation does not have to necessarily result in land degradation, if there’s good planning. However, we know that there is a large amount of land degradation going on now, and the New Climate Economy, the Global Commission on Climate and Economy, has estimated that it would cost around $250 billion per year to restore degraded land, and we know we’re only spending one tenth of that ($25 billion).

Restoration of these degraded land can also contribute to helping with the issue of climate change, while at the same time trying to mitigate carbon dioxide emissions. As you restore, you can also take action that would enable storage and mitigation of emission. The same thing with forestation. If you can reforest, you can help with carbon capture with these forests.

With regards to the funding, it would take a combination of what we call a structured partnership — not just public sector funds, but you have the public sector coming in to give the governance and the policy cover that is needed to do this, while at the same time putting in some of its money. Also the donor community comes in to put in money and take some risks, so that the private sector can come in and invest because some of these restorations can also be beneficial in a private sector sense. Then, you can have civil society joining in to make sure that this is done in an accountable way.


VA:  Developing agriculture is one of the biggest concerns of the Nigerian Federal Government, and the governments of other African countries. Are there any peculiar immediate impacts that farmers and agriculturists in general likely suffer, in the event of an intolerable level of climate change?

NOI: Climate change is already evident, and you can see it in abnormal cycle of floods and droughts.  Farmers suffer a lot of damage to their crops and livestock. Remember that even Nigeria had abnormal floods two years ago, which caused a displacement of up to two million families at the time, as well as tremendous damage of billions of dollars in terms of crops and livestock. You can measure these damages that are already occurring.

Climate change is already here. There are people in the Pacific Islands, such as in Tuvalu and Vanuatu whose islands are going to sink beneath the ocean, completely disappearing due to the impact of climate change, if we go beyond the 2 degrees Celsius that the world is aiming at, and they are even asking the world to look at 1.5 degrees Celsius. We don’t have to wait to see the impact of climate change to agriculture and livelihood.

Now, there are several solutions that have been coming forward, and one of the best ones was by African countries themselves, in the form of the African Risk Capacity (ARC). So, rather than waiting for other countries to come when there is a flood or a drought, African countries started this organisation to insure countries against damage that comes from weather based events and climate change. There is a model that has been developed where the countries have an insurance premium, and when there is an event, if the model triggers in that country, then money is paid out –that is if the event is caused by an abnormal phenomenon such as climate change or extreme weather.

For instance, last year, Mauritania, Senegal, and Niger received pay outs of $26 million from the ARC when they had severe droughts. We need to start thinking of solutions like this. The G7 has said that this is a good approach, and have agreed to scale up the work of the ARC, as well as that of the Pacific and Caribbean Risk Insurance agencies by $100 million. I think that this is a very important development.

We are focusing a lot on the problems, but we need to start focusing on solutions. We’ve talked about other solutions the world can take, such as mitigation measures, and every country has put forward their intended national development commitments. What are they going to do in order to make sure that the world stays at a 2 degrees Celsius? What are they voluntarily committing to? These must be considered for development without damaging the climate.

I want to say one thing on the solution front, and that is that Africa provides the greatest opportunities for the solutions. Therefore, beyond looking at Africa as a victim of climate change, also seeing as it suffering from damage caused by others, we need to look at the solutions the continent can proffer, and they are tremendous. Especially if the world really wants to be serious about managing climate change, and mitigating the impact, and adapting to it.

Africa presents a clear opportunity where you can build infrastructure, such as power (renewables), and also roads and rails, in a manner that is more environmentally and climate friendly.

VA: According to a World Bank report from 2013, even a 1.5 Degrees Celsius warming would put Sub-Saharan Africa at risk of massive food insecurity. Can you explain to us why a lower target could not have been put forward?

NOI: Because the world is already on a course [towards greater than 2 degrees] due to the way we have used the planet with our activities, we aimed for 1.5 [degrees] to minimise the damage and suffering, mainly in the areas that I have previously mentioned. If the world has the will, they can even try to stick at 2 degrees, not above, and even better, aim at 1.5 [degrees]. I don’t know that anybody is talking about going lower at the moment.

VA: How far would investments made in climate change solutions go in saving Africa? And what are the general plans for such investments? 

NOI: Each country has committed to a certain level of action that it would take to mitigate climate change, but what African countries are saying is, since the impact of climate change is caused primarily by the developed countries, they are asking that of the $100 billion per year that has been pledged, a significant amount should go to them [Africa] to help to mitigate the damage. The developed world should stick to its promise and deliver. I believe that, from what we have heard in Paris, the $100 billion commitment by 2020 is becoming real.

But I think that African countries need to find other solutions that would draw in and trigger private sector investments — because I’m not sure that the $100 billion per year would be adequate. That is why we advocate solutions like the ARC to help source additional funding. What can we do ourselves? We shouldn’t wait for the $100 billion, even though it is a promise that must be delivered. We definitely should push for it, but we need to find alternative solutions to make sure that keep climate change in check.

VA: Thank you, Dr. Okonjo-Iweala.

NOI: Thank you very much.

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