CASABLANCA, MOROCCO - The UN Climate Change Conference, or"Cop22", is currently unfolding in Marrakesh. Analysts, politicians and other stakeholders will discuss for ten days how to best achieve the targets set in last year's landmark conference in Paris.
A few days before, in Casablanca, another Cop22 labeled gathering took place: Climate Finance Day (CFD), a high-level meeting of experts in the green finance space, hosted by Casablanca Finance City. While a side event, it dealt with no minor issue: keeping the planet from warming more than 2 degrees Celsius by 2100 will require huge investments and markets, so far, seem slow to live up to the challenge.
"Investors are starting to allocate money in green projects, but often because it is 'the nice thing to do', rather than because they see them as a real opportunity," Anthony Hobley, CEO of the Carbon Tracker Initiative think-tank said. "We must make them understand that clean energies are often already more cost-competitive and financially rewarding than traditional ones."
Over the next 15 years the world is expected to invest around US$90 trillion to replace ageing infrastructure in advanced economies and to accommodate higher growth in emerging market and developing countries. If sustainable development goals are to be respected, this money will have to be spent on low-carbon, energy-efficient projects.
To foster the trend, banks, corporations and governments have started to offer so-called green bonds debt instruments whose proceeds will be earmarked towards financing green projects. During the CFD conference Morocco, for instance, announced a $118 million issue, to fund the construction of three solar plants in the South of the country.
Yet, while while total green-bond issuances increased from US$3 billion in 2012 to about US$42 billion in 2015, that's still a tiny fraction of what is needed.
"There's a huge need for green infrastructure in Africa. Casablanca, for instance, has just a railway line and is subject to frequent gridlocks causing CO2 emissions and pollutions. Why is the capital of banks and institutional investors still going to negative-yield bonds, issued by the European States, and not to these kind of projects?" the founder of the Climate Bonds Initiative, Sean Kidney, rhetorically asked the audience.
As Kidney mentioned, stakes are high especially in those parts of the planet, like Africa, that are often lacking basic infrastructure, while at the same time being particularly vulnerable to the effects of climate change. Now home to 1.2 billion, by the year 2050 the total population will have doubled to 2.4 billion people, according to the UN.
All of them will want to have access to basic commodities like electricity and, as the director general for Nigeria’s national pension commission Chinelo Anohu-Amazu said, "they really won't care if that comes from sustainable energy or not, as long as they have it."
Not less problematic, in a continent where the majority of the populations is made of farmers, is the issue of desertification. When discussing climate change, the focus is often on sea level rise, but water scarcity is just as important.
"We need to invest $300 billion per year, globally, to achieve land degradation neutrality and compensate the two billion hectares of degraded land and 500 million hectares of abandoned land," Moroccan born secretary of the United Nations Convention to Combat Desertification (UNCCD), Monique Barbut said.
Sustainable agricultural methods will be needed to foster resilience to the effects of climate change, and Africa is trying to address the challenge by creating 25 million climate smart farmers by 2025.
It may look like a hard fight, but the rest of the world might as well want to lend a hand. For one key point clearly emerged from the conference: if Africa thrives, and does it in a sustainable way, the whole planet will thrive. Otherwise, the fight for a more sustainable future could be lost from the start.
