By Philippe Benoit and Gareth Phillips
WASHINGTON DC, Jun 29 2023 – In the climate change discourse, “mitigation” (namely, reducing greenhouse gas emissions) often dominates. This is particularly true when the discussion turns to the mobilization of the massive amounts of private capital needed to achieve our climate objections. But “adaptation” — namely, action to respond to the impacts of climate change that are already happening, as well as prepare for future impacts — also faces large funding needs.

To meet this challenge, large amounts of private capital are once again needed — and this will require climate finance innovation targeted at adaptation, specifically.

The journey from this month’s Paris climate finance summit to COP 28  hosted later this year by the United Arab Emirates – and where financing is likely to be a prominent subject — provides opportunities to raise the profile of this often overlooked need to fund adaptation.  While there is relatively little discussion of this topic, it is nonetheless a key to achieving the dual climate goals of reducing emissions while also preparing for the impacts of climate change that are now unavoidable and projected to increase.

Annual funding needs for mitigation have been estimated at around $600 billion by 2030 in emerging economies for energy alone, with private capital providing three-quarters of the required amounts. The reported needs for adaptation are relatively smaller, albeit still only partially identified. For example, annual adaptation needs for developing countries have been estimated at $160-$340 billion by 2030, including more than $50 billion for Africa. These adaptation amounts are beyond any reasonable estimate of the funding capacity of their governments, especially when added to the requirements for mitigation.

There have been various innovative financing mechanisms developed to mobilize private capital for climate but they tend to be focused on mitigation. The best known is probably the carbon markets in which investors are compensated for funding projects that reduce or otherwise avoid emissions.  Article 6 of the 2015 Paris climate agreement establishes a resource mobilization mechanism, but once again, expressly for mitigation action. Similarly, the Energy Transition Accelerator presented by U.S. Special Presidential Envoy for Climate John Kerry at COP 27, targets private capital to fund clean power sources.

When it comes to adaptation, the discussion is often focused on public sector funds. For example, the Green Climate Fund, a multi-government facility, looks to provide funding for adaptation at levels that match mitigation. Generally, adaptation projects have been seen as providing public goods and, accordingly, have looked to funding approaches reliant on public sector resources, frequently in the form of grants. This greatly limits financing options and amounts.

Yet, the investment requirements for adaptation are huge, and they are growing every day as rising emissions are increasing adaptation needs. This will require more than just public sources; private capital is needed. But in order to unlock this capital, more attention and creativity must be directed to developing new mechanisms for adaptation.

In considering private funding for adaptation, there are three distinct but interrelated major groups of actors.

• The first are companies exposed to climate-related risks in their operations. This includes a variety of agri-businesses, electricity network enterprises, port operators, tourism industry actors and construction companies. The issue here is largely encouraging these companies to spend more on adapting their businesses to climate change.
• A second potential source is the producers and consumers of fossil fuel products whose previous activities have fueled climate change we must adapt to. For example, just as companies have customer programs to raise finance to offset their emissions (e.g., airlines), consumers might also be motivated to support investments to address the impacts of their emissions.
• The third and critical source is third-party private capital, including commercial banks and private equity investors. This constitutes a massive potential source of funding (the bond market totals in the trillions), and it is the focus of the discussion that follows.

The existing mitigation carbon markets provide a potentially fertile precedent for raising third-party private capital. It is important to recognize that the genesis of carbon markets was governments creating regulatory frameworks that gave value to emissions reductions — governments set targets and created mechanisms that offered both financial incentives and flexibility to meet those targets through capital spending.

This also helped lay the groundwork for the parallel non-governmental voluntary markets. Under these types of structures, investors are incentivized to pay for carbon avoidance which makes projects financially attractive — thereby providing project sponsors with access to capital for investments in activities, sectors and regions that were otherwise unbankable.

A similar approach could be taken for adaptation; namely, the creation of a regulatory or voluntary framework in which payments to projects that provide genuine adaptation benefits are recognized and valued.

Eligible adaptation actions might include climate-resilient agriculture goods and services, investments in cold storage, improved treatment and reuse of wastewater, coastal protection, conservation of biodiversity to protect nature’s ability to adapt and actions to mitigate forest fires, a topic that has received increased attention recently. Importantly, this isn’t just a musing.

The African Development Bank, where one of us is the manager of climate and environment finance, has been developing such a facility: the Adaptation Benefits Mechanism. The ABM mechanism creates a financial product for third-party investors (private capital, donors, consumers) to fund project developers in return for Certified Adaptation Benefits, which attribute a value to lowering or avoiding the negative impacts of climate change on agriculture, people’s health, biodiversity, buildings, businesses and other assets.

The ABM product is designed to be priced at a level that enables the developer to fund what would otherwise be an unbankable adaptation investment. Significantly, it provides these developers with access to new capital sources that can make more adaptation projects a reality.

Other mechanisms are being explored and deployed, such as adaptation impact bonds. Many of these programs are designed to attract third-party private capital to adaptation activities, while additional ones address other barriers and constraints to private investment.

Notwithstanding these efforts, there remains a general shortage of instruments and proposals to attract more private capital to adaptation. Overcoming this lack will require putting more intellectual and creative resources into adaptation finance, including by the world’s leading financial centers. The private sector has more to contribute to this area, but unleashing its power will require financial innovation.

With this month’s Paris climate finance summit now completed, the current lead-up to COP 28 to be held later this year is an opportunity not to be missed to advance the effort to raise more private capital for adaptation.

(First published in The Hill on June 14, 2023).

Philippe Benoit is research director for Global Infrastructure Analytics and Sustainability 2050 and has over 20 years of experience in international finance and sustainability, including management positions at the World Bank. He is also adjunct senior research scholar at Columbia University’s Center on Global Energy Policy.

Gareth Phillips is the manager of climate and environment finance at the African Development Bank Group.

By Abdullahi Jimoh
ABUJA, Jun 29 2023 – As Nigeria’s newly-elected president Bola Tinabu seems to be making his mark by undoing many of his predecessor’s policies – another battle is being waged in the courts between him and one of his rivals Peter Gregory Obi.

Obi has alleged the election was rigged in favor of Tinabu and is in court trying to prove this. Whether he succeeds or not, his ‘non-election’ remains controversial, with many asking what happened to that ‘influential’ youth vote he seemed to inspire confidence in during a poll with the lowest voter turnout since the country returned to democracy.

When Obi, the former governor of Anambra State, got a presidential ticket under the platform of the Labour Party, a political party with a poor track record, in May 2022, he attracted 1.2 million new followers on the giant social media network Twitter.

He had left the People’s Democratic Party (PDP) – a party considered to be a serious presidential challenge, and his followership on Twitter is 3.5 million and growing.

It was the under-30 youth population that makes up about 70 percent of Nigeria’s population, drummed-up support for him, despite his party’s lack of political following.

The pre-election narrative was that the youth were tired of the old politicians, who they believe have nothing new to offer.

They saw Obi as a credible alternative, and his followers ran social media campaigns like #take back Naija on Twitter and tagged themselves “Obi-dients.”

“The run-up saw increased youth participation in the discourse and campaigns. Socioeconomic problems, including incessant university strikes and high youth unemployment, apparently contributed to their engagement. Young people made up around 76 percent of newly registered voters, with 40 percent of that number identifying as students,” says Teniola Tayo, Consultant, ISS and Principal Advisor, Aloinett Advisors on the Institute for Security Studies (ISS) website.

However, the official election turnout tells a different story – the election had the lowest voter turnout in the country’s history of democracy, and youth turnout, despite a spirited run-up to the election, was abysmal, also the lowest since Nigeria’s independence. In 36 states, less than half of the eligible population voted, and no state had a turnout above 40 percent.

In the three largest states based on voter registration — Lagos, Kano, and Rivers — less than a third of the eligible population voted. Rivers State turnout was 15.6 percent, the lowest in the country.

Overall, the national turnout was 29 percent. Of the 93.4 million registered voters, 87.2 million people collected their Permanent Voters Card, but the total number of actual voters on election day was 24.9 million.

So What Went Wrong?

Dada Emmanuel, 20, a university student, is an Obi supporter. He trekked more than 18 kilometers to his polling unit on February 25, 2023, to exercise his vote.

“I saw Peter Obi as the best of the three major candidates because he seemed to have more realistic aspirations for Nigeria, the ruling party failed us, and I think a change of government would have been nice for a better Nigeria,” said Emmanuel.

When Obi lost the election to Bola Ahmed Tinubu, who was considered aged and feeble, he felt disillusioned.

Obi was among the top 15 presidential contenders under the umbrella of the Peoples Democratic Party (PDP) before he left the party in May 2022,  less than three days before the party’s primary on account of the internal imbroglio within the party, making Alhaji Atiku Abubakar the flag bearer.

The Emergence of the Labour Party or Should That Be the Emergence of Obi Party?

The Labour Party was formed in 2002 and registered by the Independent National Electoral Commission (INEC.

Compared with the All Progressive Congress (APC) and PDP, it was considered unpopular and, in the 2019 elections, recorded a dismal performance.

Samuel Ayomide, 18, knew this but still threw his weight behind Obi.

“Peter Obi was the only presidential aspirant without any corruption links. He is the only ex-governor that receives no pension from his state. Compare that with Tinubu, who collects (a pension) from Lagos every month,” he says.

Whatever the results, it is clear that Obi’s presence in the LP made a massive difference, and the party garnered 6,101,533, ranking third.

Obi and PDP’s Abubaker are among several petitioners who are being heard in the courts disputing the election, but the judgments will only be known months after Tinubu’s inauguration as president.

Obi has asked urged the court to nullify Tinubu’s victory and order a fresh poll.

Joseph Owan, a political analyst and Oyo State coordinator for World Largest Lesson, Nigeria, says he believes Nigerian youth are on the verge of changing the narrative because they followed the person and not the party.

“In everything involving elections, we all know that in the past, the election is always between the two top political parties (PDP & APC). With so little time, Obi came on board, (and) we all saw how he made waves based on the numbers of States he won during the presidential election.”

Owan maintained that there is a bright future for Obi in the next presidential election if he doesn’t win the case in court.

“By then, he will have established himself in terms of awareness, orientation, and advocacy in some key places like the Northern and Southwestern states,” he says, adding that his popularity will increase with time.

Nevertheless, the road to success is not an easy one in Nigeria, as there are many conflicting agendas at play.

Professor Pius Abioje of the Department of Religions at the University of Ilorin says Nigeria is not structured for equity, which resulted in the “survival of the fittest” among the politicians.

“There is a prevailing jungle law of survival of the fittest. Politicians use ethnicity, religion, and money to get patronage,” he told IPS.

Abioje further says that a detachment of religion from politics could be a solution – but there was a long way to go – with political support often divided along religious lines.

“These dwindling numbers highlight how Nigeria’s politics and state institutions continue to exclude rather than include,” an associate fellow of the Africa Programme at Chatham House London, Leena Hoffmann, was quoted as saying in Dataphyte.

Idayat Hassan, director of the Centre for Democracy and Development (CDD), quoted in the Premium Times, called on INEC to improve its election management and embark on a voter register audit. “Nigeria doesn’t have a voter register audit, an audit that takes out those who have died and all other ineligible voters from the system.”

“The fact that a significant percentage of Nigerians fail to engage in elections is a concern and perhaps points to growing disillusionment with their ability to shape a more democratic society,” she said.

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By Jewel Fraser
Port of Spain, Trinidad, Jun 29 2023 – The reasons that led to inequitable distribution of COVID vaccines during the pandemic have been inherent in the global pharmaceutical supply chain for decades and contributed to serious adverse consequences for global south countries, as was evident with HIV and Ebola. Further, those issues will likely contribute to inequities with regard to vital medicines in the future. This story by IPS Correspondent and IWMF Fellow Jewel Fraser highlights that the inequity issue is definitely not due just to the pandemic but an ongoing one.

Music for this podcast courtesy of Fesliyan Studios.

This report was supported by the International Women’s Media Foundation’s Global Health Reporting Initiative: Vaccines and Immunization in the Caribbean.

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By Silvia Baur-Yazbeck
WASHINGTON DC, Jun 29 2023 – There is a significant funding gap for climate adaptation – especially for women. Public financing will not be sufficient to close this gap, but it will be crucial for supporting the most vulnerable and facilitating private sector investments where funding and support is needed most.

Inclusive financial systems play an important role in channeling finance to the most vulnerable, including payment systems and last mile agent networks that enable access to social safety net payments, climate risk insurance products, savings for emergencies or affordable credit for investments in climate-resilient assets and more resilient livelihoods.

Development funders are thirsty for guidance and good practices to identify where they can be catalytic and crowd in the private sector for greater investment in climate adaptation.

Funding to support inclusive financial systems may be an entry point for funders with significant potential for climate adaptation impact and a clear role for private sector investment.

Where and how funders allocate funding is determined by their organizational strategies and priorities. Over the past two to three years, development funders and many impact investors have adopted strategies focused on addressing climate change and its impacts.

Women build barriers in Nepal to prevent the river from overflowing and flooding nearby villages. Credit: UNDP/Azza Aishath

More recently, especially after COP26, funders are seeking ways to allocate more funding toward climate adaptation goals. To better understand what funders are doing and whether financial inclusion is leveraged to achieve and accelerate progress toward those goals, CGAP conducted desk research and interviews over the last year (2022-2023).

Given the importance of gender equity goals and growing evidence that climate change and public and private sector responses to it are impacting women disproportionally, the research also examined how gender outcomes are embedded into climate strategies and projects.

This work covered a range of public and private development funders supporting financial inclusion and/or climate goals. For climate funding at large, the past decade has seen an exponential increase in climate finance from both public and private sources. Yet far too little of this funding has been dedicated to supporting climate adaptation and resilience.

Of the estimated USD 632 billion in climate finance that was committed in 2020, only about 7% was linked to adaptation benefits. And only around USD 83 billion was provided for climate action in low- and middle-income countries (LMICs), meaning that those with the greatest need and fewest resources to adapt are excluded from global climate finance flows.

Public funders have made commitments to fill the financing gap and mobilize private finance by testing and de-risking investments in new business models, technologies, and climate-vulnerable sectors.

However, our research showed that many of these funders are still developing strategies and in the early stages of implementing projects and investments that support climate adaptation at scale.

We learned that an important barrier funders face in to putting to work their climate adaptation funding commitments is limited knowledge about impact pathways and effective leverage points for advancing climate adaptation and resilience for the most vulnerable.

There are four reasons why funders should consider inclusive finance as an opportunity for supporting climate adaptation:

We believe that inclusive finance can be an entry point for funders to fulfill their climate ambitions and support climate adaptation for the most vulnerable.

Below are four reasons why funders should consider inclusive finance as an opportunity for increasing public and private investments in climate adaptation.

Inclusive finance can enable the autonomous adaptation of households

Most climate adaptation projects and investments support planned adaptation strategies at the national level, such as climate-resilient infrastructure and technologies. While important, these programs fall short in supporting households that are already feeling the impact of climate change in reduced crop yields, damaged assets, reduced access to basic services and health-related issues.

These households need affordable credit and savings products to access new technologies and skills that enable them to grow more resilient to climate change. In addition, they need risk transfer solutions that protect their investments in case of damage or loss.

Inclusive finance can support women’s climate adaptation and resilience

Low-income women are significantly more vulnerable to climate change impacts and therefore in great need to access solutions that help them adapt and build resilience. Research shows that women who can access and use financial services are more likely to be resilient to shocks and stresses, access basic services and run successful businesses.

Funders are already including a gender lens in their climate strategies but seem to lack clarity around how they can address both goals simultaneously. Investments in women’s financial inclusion alongside programs for transfer of skills and technologies offer an opportunity for funders to achieve both objectives by empowering women to choose and lead their own adaptation strategies.

There is also good experience in the financial inclusion sector about the role of social norms and how to address them, which will be important to consider when designing financial and non-financial solutions for climate adaptation.

Inclusive finance can crowd in private sector finance

In 2021, private investors were the primary drivers of financial inclusion funding growth. There is huge interest among private investors in the financial sector and experience among public funders in crowding in more private capital. This opens an opportunity to facilitate existing financial sector investments toward climate adaptation projects.

However, this will require public funders to shift their focus (and that of their private peers) away from mitigation-linked projects, to instead demonstrate where there are viable business models and reduce the risk for private investments. Public funders can also help by sharing their data, risk modeling approaches, and learnings that demonstrate the financial and social benefits of investing in climate adaptation.

A focus on inclusive finance can enable an inclusive and just transition

There is a risk that the increased focus on greening the financial sector by introducing exclusion lists and requiring green credentials will exclude the most vulnerable from accessing affordable finance.

Poor households are in the greatest need to adopt more climate-friendly and resilient practices to maintain and improve their livelihoods. Imposing reporting or certification requirements or excluding them because they are risky clients will prevent them from accessing financial services and limit their ability to adapt and participate in the transition to a more climate-friendly economy.

To enable a just transition, there needs to be more awareness and caution to avoid potential financial and economic exclusion of the most vulnerable.

For funders to seize these opportunities and link financial inclusion, climate, and gender goals in their funding practices, they must adopt new processes and shift their internal incentives to take on more risk and work across sectors

Our interviews confirmed that funders are working hard to build their internal capacity and develop targets and metrics to track climate adaptation. However, they were also cognizant that these efforts do not translate into increased projects and funding for climate adaptation unless there are incentives, more concessional and risk-tolerant financial instruments, and an increased exchange of knowledge and good practices.

Many funders said that funding mitigation is much easier – there are many sample projects, lessons learned and clear metrics to measure their success against. Funding adaptation is less attractive for funders because it requires them to develop new results chains and metrics, take on risky endeavors that haven’t been tested and invest more in data collection and impact measurement as results are less visible and take time to realize.

An encouraging first step, though, is an increased focus on climate adaptation targets which will set milestones and can create incentives to invest more in adaptation projects. Some funders are also integrating climate focal points or creating working groups, including specifically for climate adaptation.

Over the next three years, CGAP will work with investors and financial service providers to identify and test successful approaches to providing financial services that support climate adaptation and resilience.

The objective is to share examples, lessons learned and practical guidance for financial services providers, funders and other important sector actors to provide the poor and vulnerable access to financial and non-financial services that support their climate adaptation and resilience.

We will convene funders for peer exchange and to jointly develop recommendations as to where public versus private funders may play a more critical role and what financing instruments are most effective in supporting climate adaptation.

To achieve our objectives for this work, we rely on our members and partners to engage and share their experiences. We hope you will join us in this effort. Please reach out or leave a comment below with reactions and suggestions.

Silvia Baur-Yazbeck is Financial Sector Specialist, CGAP

Source: Consultative Group to Assist the Poor (CGAP) is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people, especially women, through financial inclusion.

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By Aimable Twahirwa
KIGALI, Jun 29 2023 – Adeline Umukunzi, a 28-year-old woman mushroom farmer in Musanze, a district located about 100 km north of the capital Kigali, said women have often been the unseen faces of agribusiness in Rwanda.

“Women have always played a vital role in agriculture, but behind the scenes. We are starting to see more and more female faces in agribusiness,” she told IPS.

While she developed high potential and locally-adapted innovations in mushroom farming, the young cultivator was unaware of how much her produce was worth to the market. Little did she know that one local food company had purchased most of her produce to process mushroom-based biscuits and nuggets.

As part of Rwanda’s agriculture transformation efforts to enhance agribusiness competitiveness, a growing number of women are now engaged in agribusiness, where many have been able to generate business benefits throughout the value chain.

Official estimates show that in Rwanda, more women than men are primarily engaged in agriculture, yet female farmers face more challenges in starting successful agribusinesses than their male counterparts.

Despite these challenges, the latest official trends show that African women are abandoning traditional ways of engaging in agribusiness and adopting intellectual property (IP) approach to transform food systems on the continent.

According to experts, adopting IP in agribusiness aims to protect goods or services produced in the sector. It mainly deals with trade secrets, described as an essential component for businesses to protect confidential information that provides them a competitive edge.

According to Olivier Kamana, Permanent Secretary in Rwanda’s Ministry of Agriculture and Animal Resources, adopting IP rights allows innovators to generate good profits.

Kamana told IPS that key women agripreneurs in Africa could develop commercially viable products, so there needs to be some IP protection to incentivize the innovator.

In many African countries like Rwanda, where agriculture is the backbone of their national economy, experts stress the need to embrace talent, problem-solving ability, and innovation for women.

Official estimates by the UN Food and Agriculture Organization (FAO) indicate that around 62 percent of women in Africa are involved in farming and do the bulk of the work to produce, process, and market food.

According to agriculture experts, business competitiveness in the regional intra-African trading space offered by the African Continental Free Trade Agreement requires agribusiness actors to operate more efficiently, which requires investments in new technologies, new ways of fertilizing and watering crops, and new ways of connecting to the global market.

For Kamana, African women agripreneurs have access to the type of innovations they need to overcome the unique challenges they face.

During the first Africa Regional Intellectual Property (IP) Conference for Women in Agribusiness, which took place in Kigali in May 2023, delegates expressed the desire to promote innovations in women-led agribusinesses in Africa by helping them understand and use IP to bring their ideas to the world.

Bemanya Twebaze, Director General of the African Regional Intellectual Property Organization (ARIPO), is convinced that Intellectual property (IPR) can be a powerful tool in empowering women and guaranteeing that they benefit from their innovations and creations in the agricultural industry.

“Policymakers should encourage and facilitate IP rights for women in agriculture while providing legal and technical aid to maximize their prospects of prosperity,” he said.

Agriculture scientists have made breakthroughs in identifying the actors that can be considered innovators to bring agricultural development and increase food production in Africa by examining how intellectual property rights could be largely promoted on the continent.

Estimates show that small farmers, with the majority of women, constitute Africa’s most important and most capable innovators, yet this category of the workforce is still struggling to aggregate their produce to supply foreign markets.

Supporters of IPRs argue that though the exclusive monopoly on the invention could impact agriculture in Africa, farming communities across the continent still have difficulty innovating by incorporating new technologies or varieties coming from outside into their production systems.

After graduating from university a few years ago, Rosine Mwiseneza, a young woman agripreneur and manager of BeeGulf company based in Kigali, started beekeeping with only five hives in the Rwamagana district from Eastern Rwanda. Soon after, the number of hives increased to 15 and later to 25.

Mwiseneza told IPS that there had been plenty of opportunity for honey production in Rwanda with the possibility to generate various products across the value chain without intermediaries.

Currently, Mwiseneza’s company is producing soaps, candles, and glass containers made from raw beeswax with a target to make appropriate use of IP rights in the stage of this innovation process.

“We are looking to apply for a valid invention patent, and we are confident to get substantial profits from these innovations in the near future,” she told IPS.

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