Leaders call for tax on fossil fuels to fund climate action

African Heads of State and Government have concluded an intense three-day climate discussion in Nairobi with a range of demands they expect their wealthy developed counterparts will meet as the world bids to escape climate change-related setbacks.

Top on the agenda is a call on the global community to act with urgency in reducing emissions, fulfilling its obligations, keep past promises and supporting the continent in addressing climate change effects.

“We demand a fair playing ground for our countries to access the investments needed to unlock the potential and translate it into opportunities.

“We further demand a just multilateral development finance architecture, to liberate our economies from odious debt and onerous barriers to necessary financial resources,” said the leaders in a final statement dubbed: The Nairobi Declaration read by President William Ruto at Kenyatta International Convention Centre (KICC).

Specifically, the leaders, in a common position ahead of the 28th Conference of Parties (COP 28) later this year in Dubai, they want accelerated efforts towards emissions reduction to align with goals set forth in the Paris Agreement. “Honor the commitment to provide Sh14.6 trillion ($100 billion) in annual climate finance, as promised 14 years ago at the Copenhagen conference,” demanded the leaders.

On Tuesday, the COP 28 presidency demanded that the pledges should move beyond the billions of dollars to trillions, arguing it’s meaningless to keep promising to give a paltry that never comes.

The leaders also demanded that the global community commit to uphold commitments to a fair and accelerated process of phasing down coal and abolishment of all fossil fuel subsidies.

“Swiftly operationalise the Loss and Damage facility agreed at COP27,” the Heads of State and government from the continent also demanded.

Unfortunately, this came a few hours after United States Special Presidential Envoy for Climate John Kerry laughed off the matter during a meeting with journalists at the Summit venue, stating that the US ‘will be damned’ if it pays any form of climate reparations to developing countries. And this must be noted that the US is one of the biggest polluters, emitting tonness of volumes of Green House Gases (GHG) to the atmosphere.

“Since 1988, the US and other countries have taken enormous steps to respond to this reality. Mother Nature doesn’t choose between the emissions of one country and those of another. What affect Mother Nature are the total emissions that go into the atmosphere,” Kerry said in reference to this consistent by African states, who feel that they are paying too much for damages caused by countries outside the continent.

Climate-positive investments

However, this did not deter the leaders not to continue making more related demands. They called for climate-positive investments that catalyse a growth trajectory, anchored in the industries poised to transform the planet and enabling African countries to achieve stable middle-income status by 2050.

“We urge global leaders to join us in seizing this unprecedented opportunity to accelerate global decarbonization, while pursuing equality and shared prosperity; for collective global action to unlock the necessary capital for both development and climate action,” they stated.

The leaders emphasised this was in line with the announcement of the Paris Summit in June this year, for a New Global Financing Pact that no country should ever have to choose between development aspirations and climate action.

At the talks, African countries complained that they are forced to pay borrowing costs that are five to eight times higher than wealthy countries, leading to recurrent debt crises and preventing them from spending more to respond to climate change.

In the declaration, the leaders advocated for reforms to the multilateral financial system and the development of a new Global Climate Finance Charter by 2025.

“And to achieve the necessary levels of urgency, scale and inclusivity, we are also demanding for concrete actions on the proposals to reform the multilateral financial system currently under discussion,” they said, arguing this will enable African countries build resilience to climate shocks, including better deployment of the Special Drawing Right (SDR) liquidity mechanism and disaster suspension clauses.

It’s important here, to note that the SDR allocation is not a loan from the IMF, and therefore, the leaders called on multilateral development banks to increase concessional lending to poorer countries and better deployment of the IMF’s SDR mechanism.

“It’s noteworthy to understand that better leveraging of the balance sheets of Multilateral Development Banks (MDBs) to scale up concessional finance, and addressing the undue disparities emerging and advanced economies cost of financing from the capital markets,” the presidents further adopted this tough decision, only two months to the global climate talks.

During the Covid-19 pandemicm IMF issued Sh95 trillion ($650 billion) as part of its response to the disease that has led to 5, 689 fatalities and 343,918 Kenyans testing positive by yesterday. The Ministry of Health reported that Covid-19, largely a climate-related disease,  saw 337,309 recovering.

Ruto has been on record since the June Paris Climate Summit criticising the wealth nations of influencing an unjust configuration of multilateral institutional frameworks that have endlessly exposed African countries to costly financing. He repeated these remarks yesterday as he read the concluding remarks.

However, on a positive note,  he applauded the summit, the first one on the African soil to discuss climate.

“This is a great success for the continent,” he said in his opening remarks, where he noted it had achieved a lot by committing Sh3.4 trillion ($23 billion).

The meeting brought together a multi-sectoral community of government representatives, development banks, private investors and philanthropists.

The Nairobi declaration target was announced among several other commitments from world leaders to appreciate that decarbonizing the global economy is also an opportunity to contribute to equality and shared prosperity.

“Increasing Africa’s renewable generation capacity from 56 GW in 2022 to at least 300 GW by 2030, both to address energy poverty and to bolster the global supply of cost-effective clean energy for industry,” the declaration document states in part. The aim of the summit was to address the increasing exposure to climate change and its associated costs, both globally and particularly in Africa.

Green growth

African countries will take the proposals in the Nairobi Declaration to a UN climate conference later this month and the COP28 summit which begins in the United Arab Emirates in late November.

“As a continent, we have developed our common position which encapsulates our ambitions for socioeconomic transformation and our climate action agenda,” the leaders said, noting that the position is anchored on the potential that Africa holds to decarbonize the global economy and sets the stage for green industrialisation throughout the world.

However, the leaders also committed to promote investments in urban infrastructure including through upgrading; developing and implementing policies, regulations and incentives aimed at attracting local, regional and global investment in green growth and inclusive economies among others.

They also pledged to propel Africa’s economic growth and job creation in a manner that not only limits its own emissions but also aids global decarbonization efforts, by leapfroggin traditional industrial development and fostering green production and supply chains on a global scale.

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