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Climate change, urban development and the $832m natural disaster cost to Africa

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Africa doesn’t contribute much to global warming, but the continent is exposed to a greater risk of climate change. Africa accounts for less than 2 per cent of global greenhouse gas (GHG) emissions yet, faces the biggest threats of climate change.

According to a new report on how to finance Africa’s green cities titled ‘Financing Africa’s urban opportunity: The why, what and how of financing Africa’s green cities’, climate change is bringing Africa’s urban development deficit into sharper contrast.

“Africa accounts for less than 2 per cent of current GHG emissions, yet it is the most vulnerable to climate change. Much of the continent is already warming more quickly than the rest of the world. By 2050, mean atmospheric temperatures in Africa will almost certainly be at least 2°C above the long-term average,” the report said.

The report indicates that consequently, Africa’s urban development is likely to confront unprecedented biophysical risks. Low capacity to withstand the impacts of natural disasters costs Africa an estimated $832 million every year, with a growing share of this cost being borne by cities,” it added.

It notes that 79 of the fastest-growing African cities, including 15 African capitals and many of the continent’s key commercial hubs, are at ‘extreme risk’ from climate change.

Identifying three pillars that will be crucial for low-carbon, climate-resilient urban development, the report states compact urban growth, connected infrastructure and clean technologies.

“They can drive cost and resource efficiencies, create jobs through the benefits of economies of scale and agglomeration and foster resilience and productivity. When these pillars are delivered with emphasis on principles of resilience and inclusivity, they have the potential to create long-lasting change for all,” it says.

The report was prepared by the Coalition for Urban Transitions, a global initiative to support national governments accelerate economic development and tackle climate change by transforming towns and cities, in collaboration with Climate Policy Initiative (CPI) and Vivid Economics on behalf of FSD Africa.

According to the authors, it builds on extensive consultations with global and local organisations, namely the European Bank for Reconstruction and Development (EBRD), Global Development Incubator (GDI), African Development Bank (AfDB), African Centre for Cities (ACC), FSD Africa, Atlantic Council, World Resources Institute (WRI) and New Climate Economy (NCE).

The report further states that Africa’s future will depend on the success of its cities, noting that with an astounding increase in the continent’s urban population and the fastest urban growth rate in the world, the region is expected to see a two-and-a-half-fold increase in its urban population in the next 40 years.

“While this urbanisation holds great transformative potential for the continent’s development, Africa is struggling to secure its urban dividend. Fragmented, disconnected, polluted and costly: this business-as-usual pattern of urbanisation is imposing significant economic and social costs on African cities,” the report says.

It indicates further that the unprecedented scale of urban growth has made efficient and inclusive urban planning extremely difficult.

It points out that poorly planned cities are characterised by unmanaged sprawl, increased distance between residents and work opportunities, rapid growth of informal settlements on the urban periphery, increased cost of service delivery, severe congestion, local air pollution, inefficient energy use, high greenhouse gas (GHG) emissions and other negative spillovers.

“This has led to a lack of socially inclusive, compact cities serviced by public transport, potable water and clean energy, largely due to the relative low-income levels against which urbanisation is taking place and the resulting low level of resources that can potentially be mobilised for urban investments.

Power centralisation, inefficient taxation and the absence or low quality of land cadastre are other factors that have made sprawl the default urban form,” it says.

According to the report, across 35 major cities in Ethiopia, Kenya and South Africa, investment in more compact, clean and connected cities is expected to deliver total benefits equal to $1.1 trillion by 2050, supporting hundreds of thousands of additional jobs compared to conventional fossil fuel investment.

“By 2050, investment in urban climate interventions in major cities in Ethiopia, Kenya and South Africa could deliver $240 billion, $140 billion and $700 billion in benefits, respectively —equivalent to 250 per cent of annual GDP (2020) in Ethiopia, 150 per cent in Kenya and 200 per cent in South Africa. New investment in urban climate interventions is also expected to generate significant wider economic benefits, including additional employment compared to traditional fossil fuel energy consumption, resulting in an average of 210,000 net new jobs in Ethiopia, 98,000 in Kenya and 120,000 in South Africa to 2050,” it adds.

However, it indicates that for the 35 major cities in Ethiopia, Kenya and South Africa, delivering compact, connected and clean cities will require $280 billion of incremental investment by 2050—a significant level of investment when compared to forecasted spending to deliver national climate targets across the three countries. While a significant amount of investment is required to deliver compact, clean and connected cities in Africa, the case for investment rests on robust returns. Across all three countries, the net present value (NPV) or the extent to which benefits exceed costs over the period to 2050 yield very significant positive net returns. For major cities in Ethiopia, Kenya and South Africa, they are expected to be $90 billion, $52 billion and $190 billion, respectively.

It notes that over the past 60 years, economic activity across the African continent has shifted markedly from rural to urban areas.

“As of 2015, over half of the continent’s population lived in one of the 7,617 urban agglomerations. In absolute terms, the urban population has increased by 2000 per cent, from 27 million in 1950 to 567 million in 2015. Estimates suggest that 143 cities generate a combined $0.5 trillion in economic output, totalling 50 per cent of sub-Saharan Africa’s (SSA) GDP,” it says and adds that it is no surprise then that the African Union’s Agenda 2063 sees functioning urban sectors as “a major driving force in the continent’s transformation” through their contribution to economic growth, employment generation and poverty reduction.

By Emmanuel K. Dogbevi
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