The behemoth called climate change has an array of boom and boon, or profits and losses, that are economically quantifiable. Climate financing is one of the pragmatic harvests to the impuissant nations. It strives to address climate change mitigation and adaptation.
The Kyoto Protocol of 1997 and Paris agreement (2016) require rich countries to finance developing and vulnerable nations’ efforts to combat climate change and implement the objective of the UN Framework Convention on Climate Change (UNFCCC) of large-scale investments to reduce emissions.
The two major climate finance funds are the Special Climate Change Fund (SCCF) and the Least-Developed Countries Fund (LDCF), both managed by the Global Environment Facility (GEF), the operating entity of the Kyoto Protocol and the Paris agreement. Climate finances can also be in the form of a debt, aid or equity and bilateral or multilateral.
Climate change mitigation and adaptation is an immoderate venture that can inundate a lot of resources. With the rising incalculable climate change catastrophes, climate finances are never enough and nations must seek homegrown solutions like improved human-environment relationships.
Another is carbon trading. The nascent merchandising, the selling and buying of carbon credits, is a profitable pursuit. One tradeable carbon credit is equal to a tonne (1,000kg) of carbon dioxide (CO2) or an equivalent Greenhouse Gas (GHG) reduced, sequestered or avoided.
Six mature trees are required to sink a tonne of CO2; one can store about 167kg of CO2 per year. This calls for massive afforestation to provide sufficient carbon sinks. Carbon trading is transboundary, just as the gas itself is, in both the compliance and voluntary carbon markets.
That way, polluters pay a price for their emissions and can feel the nip, with the hope that their emissions are analogous to the available decarbonising facilities. One carbon credit (one tonne of CO2) costs $40 to $80 in the carbon market. If Kenyans embrace carbon trading, they will not only make easy money but also help the government to deliver on its Nationally Determined Contribution (NDC) towards emission reduction and climate change adaptation.
The losses that accrue from climate change are countless and discomposing. Every year, climate change-related quandaries ravish people and their sources of wealth. Floods and wild fires destroy life and properties. Climate disasters are believed to cause about $1.3 trillion worth of damage by 2030.
Climate change also causes the collapse of agricultural systems, increase in debts, economic inequalities, disruption of transport and communication, financial instability, diseases and death, insecurity and social unrest-among a plethora of other irritants. Swiss Re (insurer) says climate change can cut the world’s economy by $23 trillion by 2050.
Every nation, Kenya included and as a member of the Organisation for Economic Co-operation and Development (OECD), must come up with multipronged financial policies and strategies that will handle the financial risks of climate change and enhance economic buoyancy today and tomorrow.
With climate change, humanity has no choice but to mitigate, adapt as a necessity and watch out for the unpredictable climate change upheavals.
- Dr Kipkiror, PhD, an environmental consultant and lead expert/auditor in environmental/social impact assessment, is a member of the National Environment Management Authority (Nema) Board of Directors. [email protected].