Facilitating Green Growth in Africa

Perspectives from the African

Development Bank

Rio de Janeiro, June 14, 2012

______
Frank Sperling
Energy, Environment and Climate Change
Department
Green 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 biodiversity
Waste Accumulation
Pollution
Climate 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 Investment
Growing entrepreneurship
Environment:
A continent rich in natural resources…
Abundance of renewable and non-renewable
resources
Continent is still within the biocapacity of its
lands
Africa is low carbon: Average per capita and
aggregate emissions are low
Sources: AfDB et al. 2012, WWF and AfDB 2012
but:
Growth often driven by natural resources, low
employment elasticity
Poverty remains wide-spread,
(Over 60% of Africa’s population earn less than
US$ 2)
Among the largest wealth disparities in the
world
but:
Steep climatic and environmental gradients
across the continent
Progressive land degradation and environmental
pollution
Africa’s ecological footprint, the aggregate
demand on natural resources, increased by 240%
btw. 1961 and 2008
Disaster Risk and Climate Change
Consequence
Green Growth needs to be development
centered, relating to key development
challenges:
Overcoming the infrastructure deficit
Efficient Management of Natural
Resources
Natural Disasters and Climate Change
Food Security
Issue: Energy Access and Security

Development requires energy

Decisions taken today will lock-in Africa’s
energy infrastructure for decades
Issue: Land degradation Issue: Population Growth

Land degradation affects large

parts of Africa.
Issue: Climate Change Issue: Economic Risks

Figure. Most of Africa’s crops are likely to be adversely

affected by climate change: Projections for 2045-65
relative to 1961-2000. Figure. Changes in world price’s for key African agriculture
Source: Schlenker and Lobell 2009 exports during 2012.
Green Growth is a transformative, iterative process leading
towards greener economies
Ecological footprint

X1
GDP per capita
X2
Time
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
Growth
Green Growth is a iterative process. It is a about identifying
options that enable the transition towards sustainable
development pathways.
GREEN GROWTH FOCAL AREAS

III. Building Resilience of

I. Providing Sustainable II. Efficient/Sustainable
Livelihoods and Economic
Infrastructure Management of Natural Assets
Sectors

Access to
renewable/low-carbon Land (agriculture, forests
Physical/climate
energy and energy and other land-uses)
efficiency

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.