COP29: AFDB wants African countries’ GDP calculation to reflect “green wealth”

As the world’s largest annual climate conference opens in Baku, Azerbaijan, this week, the African Development Bank (AfDB) says it is aiming to mobilize additional resources for climate action in Africa, and to launch a bold new approach for assessing African economies by including their “green wealth.”

Organized by the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat, COP29 follows last year’s COP28 at which countries established a Loss and Damage Fund. This year’s summit, dubbed the “Finance COP,” will see countries negotiate fresh climate finance targets.

Africa, with its vast carbon-sequestering forests and resources ripe for green growth, holds massive potential to drive clean energy access for millions. Yet, the continent receives only 3-4% of global climate finance despite accounting for nine of the world’s 10 most vulnerable countries to climate change.

“There is no reason why Africa should be greenly poor. Africa should be greenly wealthy by proper valuation of its vast contributions to global environmental services,” African Development Bank Group President Akinwumi Adesina said during a meeting of African Ministers of finance, economy, foreign affairs, climate change, and environment in the run-up to COP29.

To achieve the wealth, Mr Adesina is advocating for recalibrating the GDP of African countries to reflect natural assets like forests and carbon sinks. This recalibration could reveal a significantly higher GDP, better reflecting Africa’s environmental contributions.

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The COP29 summit will provide a platform for African leaders to introduce “Measuring the Green Wealth of Africa,” an initiative that could redefine African economies.

According to the African Development Bank’s preliminary estimates, adjusting for carbon sequestration alone could have boosted Africa’s nominal GDP in 2022 by $66.1 billion—a 2.2% increase. Six Congo Basin countries (Cameroon, Central African Republic, Democratic Republic of Congo, Republic of Congo, Equatorial Guinea, and Gabon) accounted for nearly 64% of this increase.

“That means that the countries can have larger headroom to take on more financing and invest them for the greening of their economies. Therefore, such a move is important for re-computing Africa’s debt sustainability,” Mr Adesina said.

Events

The African Development Fund’s Climate Action Window will, on Wednesday, host a session to discuss how to unlock climate finance for Africa’s vulnerable communities via this critical arm of the Bank Group.  The Climate Action Window was established under its 16th replenishment cycle to help fill Africa’s significant climate finance gap.

Other high-level events include Wednesday’s Measuring the Green Wealth of African Nations, which will be attended by heads of state and government. It will be followed by the launch of a report about Green Wealth. The Bank will host an event to rally support for Mission 300(link is external), a joint undertaking with the World Bank Group and partners to connect 300 million people in Africa to electricity by 2030.