Facilitating Green Growth in AfricaPerspectives from the African

Development Bank

Rio de Janeiro, June 14, 2012

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Frank SperlingEnergy, Environment and Climate Change

DepartmentGreen Growth Team

African Development Bank

Part 1: Rationale for Green Growth in Africa

Green Growth represents a transformative development model for enabling sustainable growth and creating prosperity in Africa by taking a holistic approach to development, which:values human, social and natural capital, efficiently and sustainably uses ecosystem goods and services, and: builds resilience in a changing and increasingly inter-connected world

The Global Perspective on Green Growth

On a global scale the rationale for green growth is clear. Humanity has become the dominating force shaping the surface of the planet, altering major biophysical processes from local to global scales. Renewable resources are being utilized at faster rates than they can be replenished. Consequences:Overexploitation of natural resources, loss of biodiversityWaste AccumulationPollutionClimate Change etc. In light of population growth, continuing with BAU is not an option. Need to adjust our economic model in recognition of the physical boundaries of the planet and social justice.

Sources: Crutzen 2002, MEA 2005, IPCC 2007, Zalasiewicz et al 2008, WWF 2010, Raworth 2012

Green Growth in the African Context

Development:A continent on the move:Rapid economic growth (GDP growth rates of 5% and more) Increasing Foreign Direct InvestmentGrowing entrepreneurship

but:Growth often driven by natural resources, low employment elasticityPoverty remains wide-spread, (Over 60% of Africa’s population earn less than US$ 2)Among the largest wealth disparities in the world

Environment:A continent rich in natural resources…Abundance of renewable and non-renewable resourcesContinent is still within the biocapacity of its landsAfrica is low carbon: Average per capita and aggregate emissions are low

 but: Steep climatic and environmental gradients across the continentProgressive land degradation and environmental pollutionAfrica’s ecological footprint, the aggregate demand on natural resources, increased by 240% btw. 1961 and 2008Disaster Risk and Climate Change   

Sources: AfDB et al. 2012, WWF and AfDB 2012

Consequence

Green Growth needs to be development centered, relating to key development challenges:Overcoming the infrastructure deficitEfficient Management of Natural ResourcesNatural Disasters and Climate ChangeFood Security

Issue: Energy Access and Security

Development requires energyDecisions taken today will lock-in Africa’s energy infrastructure for decades

Land degradation affects large parts of Africa.

Issue: Land degradation Issue: Population Growth

Issue: Climate Change

Figure. Most of Africa’s crops are likely to be adversely affected by climate change: Projections for 2045-65 relative to 1961-2000. Source: Schlenker and Lobell 2009

Issue: Economic Risks

Figure. Changes in world price’s for key African agriculture exports during 2012.

Time

GDP per capita

Ecol

ogic

al fo

otpr

int

X1

X2

Green Growth is a transformative, iterative process leading towards greener economies

Green Growth: It is about adapting to changing realities for development, but also about seizing new opportunities:

Leap-frog to efficient technologies when addressing Africa’s infrastructure deficit

Manage Africa’s new asset – carbon, recognizing the growing importance of Africa’s natural wealth to the world

Harness the demographic dividend through education and skills development

Leverage growing private-sector development through clear regulations and incentives

Part 2: Transitioning to Green GrowthGreen Growth is a iterative process. It is a about identifying options that enable the transition towards sustainable development pathways.

GREEN GROWTH FOCAL AREAS

I. Providing Sustainable Infrastructure

II. Efficient/Sustainable Management of Natural Assets

III. Building Resilience of Livelihoods and Economic Sectors

Access to renewable/low-carbon energy and energy efficiency

Land (agriculture, forests and other land-uses)

Physical/climate

Sustainable transport Water (freshwater, marine) Economic

Sustainable cities Minerals Social

Steps (1)

Vision/Buy-In: Strong political leadership at highest level, cross-sectoral focus, early stakeholder engagement

Valuing What Matters: Focus on quality of growth, national accounting of economic, social and natural capital

Planning for the Future: Avoiding lock-in of unsustainable development pathways

Steps (2)

Sending the right signals: Engagement of private sector is crucial; requires clear regulatory environment, policy incentives

Financing: Many interventions result in cost savings over project life time, increasing efficiency and productivity, but upfront investment costs may present obstacles for transition. For green growth options with global benefits appropriate contributions from international community are needed.

Part 3: Building on Experience

AfDB and other development organizations can build on existing policy, operational and financing experience that can function as building blocks for green growth development pathways.

Project Examples: Alternative Pathways to Energy Security (1)

In Kenya, where only 5 percent of the rural population has access to electricity, the Menengai geothermal energy project will enable a 26 percent increase in production capacity by 2018. This additional reliable, clean and inexpensive electricity will meet the needs of 500,000 new households and 300,000 small businesses and will provide 1,000GWh to industries.

AfDB’s support for South Africa’s national electricity utility, Eskom, in implementing a $1.3 billion renewable energy project is introducing concentrated solar power to sub-Saharan Africa and the first utility-scale wind power plant to South Africa (100MW each).

Source: AfDB Staff

Project Examples 2: Strengthening productivity and food security through sustainable land and water management

Drier agro-ecological conditions in the Gambia have led to declining productivity in arable areas where major food crops are grown. By investing in a system for improved soil and water management (PIWAMP), the AfDB has contributed to a six-fold increase in total crop production in the project area—from 4,000 to 25,000 metric tons a year between 2006-2010.

Source: AfDB Staff

Concluding Remarks Green growth is not a departure from sustainable

development, but reinforces the need to address the social, economic and environmental dimensions of development;

Green growth places further emphasis on growth as a central driver of development, while focusing on the most environmentally sustainable options;

It requires sustained political commitment, better valuation of natural and social assets in decision-making processes, and removing market distortions;

Concluding Remarks (2) Green Growth strategies need to be tailored

to the development context of a country; While not every puzzle piece in a country’s

economic picture can be green, over time the pieces can come together to create a green picture;

AfDB stands ready to assist its Regional Member Countries in developing Green Growth Strategies, securing financing and technical assistance.

Thank you. Merci.The AfDB’s strategic work on Green Growth is carried out by a cross-sectoral team. Co-chairs are:•Mr. Aly Abou-Sabaa, Director and Chair of the Climate Change Coordination Committee•Mrs. Hela Cheikhrouhou, Director of the Energy, Environment and Climate Change Department

For further information and feed-back, please contact:Frank Sperling, Green Growth Team Leader, f.sperling@afdb.org

The views expressed in this presentation do not necessarily reflect the views and policies of the African Development Bank(AfDB) or its Board of Governors or its Board of Directors or the governments they represent.