E-waste, electronic waste, e-scrap and end-of-life electronics are as per Geneva Environmental Network, terms often used to describe used electronics that are nearing the end of their useful life and are discarded, donated or given to a recycler. The UN defines e-waste as any discarded products with a battery or plug and features toxic and hazardous substances such as mercury, that can pose severe risk to human and environmental health. So why Global e-waste generation is to double by 2030, raising health alarms?
Global e-waste generation to double by 2030 raising health alarms
International organisations and climate advocates have been raising the red flag around e-waste issue forcing businesses and governments to set e-waste policies, standards and recommendations.
Electronic waste or e-waste is a global challenge threatening the health of people and the planet. International organisations and climate advocates have been raising the red flag around this issue forcing businesses and governments to set e-waste policies, standards and recommendations in an effort to improve the situation.
According to the UN, in 2021 each person on the planet will produce on average 7.6 kg of e-waste, meaning that a massive 57.4 million tons will be generated worldwide. As declared by ERI (Electronic Recyclers International), it is expected that worldwide e-waste generation will be at 67 million tons by 2030, which is almost double 2014’s waste.
In the Arab region, the Regional E-waste Monitor for the Arab States 2021 which is the first monitoring effort in the region in relation to e-waste statistics, legislation and e-waste management infrastructure, indicated that e-waste generation in the Arab region increased by 61 per cent from 1.8 Mt (4.9 kg/inh) in 2010 to 2.8 Mt (6.6 kg/inh) in 2019.
With the rise of global health issues and the aggravating challenges of climate change, and given the growth of e-waste generation, it has become urgent to find solutions to a growing problem that affects people’s health and their future on the planet. In fact, the International Telecommunication Union (ITU) has clearly affirmed that e-waste is one of the largest and most complex waste streams in the world. Today, it has become clear that addressing the environmental risks of e-waste is beyond pressing.
In particular, the Middle East and Africa region is facing deep challenges in e-waste management. In fact, the regional e-waste monitor for the Arab states 2021 has stated that “E-waste management in the Arab States region faces a myriad of challenges, prompted by a complete absence of e-waste-specific policies and legislation, which are key to the development of a proper system and an appropriate response.” Many solutions can improve the situation if tackled properly, such as preventing e-waste generation, adopting adequate legislations, raising awareness, improving collection and treatment of e-waste, among others.
As many businesses are already addressing the challenge part of their commitment to the United Nations Sustainable Development Goals (SDGs), Resource Group, a regional group of companies with diversified businesses covering the Middle East and Africa, is taking serious steps to tackle the e-waste problem starting by raising awareness among its teams to collect and recycle its e-waste.
The Group has recently signed an agreement with Verdetech, for the collection of all solid and e-waste generated by the Group. This initiative falls under Resource Group’s CSR initiatives in line with its objective to support the SDGs.
“The urgency to limit solid waste and particularly e-waste has been on the rise in the world. Therefore, it is important for us to adopt eco-friendly practices at our premises to limit our environmental footprint and specifically contribute to limiting the e-waste in Lebanon and the region”, said Hisham Itani, Chairman and CEO at Resource Group.
He added, “Corporate sustainability is one of our main priorities as we aim to tackle environmental challenges and promote environmental responsibility among our teams and the communities. By partnering with Verdetech, we trust that all our electrical and electronic equipment will be recycled through innovative waste management techniques.”
Stressing on the importance of creating awareness about waste management, Ramzi el Haddad, General Manager said, “Our aim is to support businesses in their efforts towards sustainability and more specifically waste management. In fact, solid and e-waste management is a serious issue that directly affects the environment and our ecosystem. Therefore, as companies play an important role in setting new standards and behaviours, we are putting all our efforts into partnering with businesses to encourage waste prevention and recycling behaviour.”
The programmable world from writing software codes to running machines to computing efficiently would be on the verge of programming the world. It would be a long-drawn effort, the contours and time unknown, but its direction is apparent. The typical elements of software will become a part of our day-to-day life, bringing control, customization and automation to the increasingly entangled world around us. The experiences would be under your control. How different would it be from the world we live in today?
The image above is Credit: Carloscastilla via Alamy Stock
Is Your Business Ready for the Programmable World?
The programmable world will be a turning point for businesses and society. Businesses that prepare first will be best positioned to succeed.
Imagine a world where the environment around you is as programmable as software: a world where control, customization, and automation are enmeshed in our surroundings. In this world, people can command their physical environment to meet their own needs, choosing what they see, interact with and experience. Meanwhile, businesses leverage this enhanced programmability to reinvent their operations, subsequently building and delivering new experiences for their customers.
The Accenture Technology Vision 2022 report explains that, increasingly, this “programmable world” is becoming a reality. It is being built on decades of innovation including cameras, smart speakers and microphones, natural language processing, computer vision, edge computing, programmable matter and 5G — to name just a few. Such technologies are amplifying the capabilities of devices and turning them into an ambient and persistent layer across our built environments.
Already, nearly 80% of executives surveyed believe that programming the physical environment will emerge as a competitive differentiation in their industry. An early example of what’s to come in this space is Amazon’s Sidewalk service. For years, Amazon deployed hundreds of millions of Echo, Ring and Tile products in neighborhoods worldwide. Sidewalk creates a Bluetooth network that can extend connectivity up to half a mile beyond Wi-Fi range and lets anyone with compatible devices connect. If your dog escapes, a Tile tracker on its collar could stay connected thanks to Sidewalk bridges from your neighbors’ homes. This approach of connecting existing IoT devices to create instant smart neighborhoods hints at the power that connecting other, even more sophisticated technologies will soon unleash.
Leading enterprises will be at the forefront of the programmable world, tackling everything from innovating the next generation of customizable products and services, to architecting the hyper-personalized and hyper-automated experiences that shape our future world. Organizations that ignore this trend, fatigued from the promise of IoT, will struggle as the world automates around them. This will delay building the infrastructure and technology necessary to tap into this rich opportunity, and many organizations may find themselves playing catchup in a world that has already taken the next step.
Preparing for the Programmable World
To begin building a new generation of products, services, and experiences in the physical world that meet our new expectations for digital conveniences, enterprises will need a deep understanding of three layers that comprise the programmable world:
1. The connected. The connected devices that enable seamless interaction with our surroundings: IoT and wearables today, ambient computing and low latency 5G-based devices tomorrow.
2. The experiential. Digital twins of the physical world that provide real-time insights into environments and operations and which transform peoples’ experiences within them.
3. The material. A new generation of smart, automated manufacturing alongside innovations like programmable matter and smart materials; programmable matter can — as the phrase suggests — be “programmed” to change its physical properties upon direct command or by sensing a predetermined trigger.
Becoming a leader in the programmable world requires wide-ranging experimentation and continuous development across these three layers. Companies that achieve “full stack” programmability will blaze a trail, so it’s important for this journey to start as soon as possible. We recommend that organizations begin addressing the following as a priority:
Level up the connected layer. 5G will be a game-changer in terms of speed and low latency, but rollouts are still in early days. This presents an opportunity for organizations to pilot new use cases that leverage 5G capabilities, so that they can hit the ground running when it’s more broadly available.
Get involved with industry-wide alliances. Industry alliances will shape the development of new technology standards for the programmable world. Businesses that take part in these alliances will help ensure that the world evolves in a way that benefits their customers. From an interoperability perspective, this could mean participating in ecosystem-wide efforts to set standards for how devices connect and communicate.
Bridge the digital and physical worlds. All businesses should now consider building digital twins. Even without the full maturity of the programmable world, these platforms provide significant operational and competitive advantages to companies today. Over time, digital twins will become the engine for every enterprise’s programmable world strategy, letting them invent products, design experiences, and run their businesses in ways that would once have been unimaginable.
Innovate in the right areas. Start by looking at where purely digital or purely physical experiences have yet to excel. For instance, apparel shopping comes with major pain points both in person and online (e.g., limited selections and wait times in store vs. difficulty finding the right size/style online). Virtual dressing rooms using AR filters and 3D avatars are a perfect solution, enabling online customers can try on items before they buy. Similarly, physical dressing rooms can be enhanced with improved lighting and interactive screens, so shoppers can get more out of trips to the store.
Explore future materials technologies. Partnerships with start-ups and universities are a good way to stay right at the forefront of real-world technology innovation. For instance, a team of researchers at MIT’s Center for Bits and Atoms published their work around four new material subunits called voxels. Researchers believe voxels could be programmed into certain combinations to create objects that change and respond to the environment around them – like airplane wings that shapeshift in response to different air conditions — and they believe tiny robots could be used to assemble, disassemble, and reassemble the voxels into a nearly limitless variety of objects.
The programmable world promises to be the most disruptive turning point for business and society in decades. Soon, we will live in environments that can physically transform on command and which can be customized and controlled to an unprecedented degree. With these environments, a new arena for innovation and business competition will be born. Businesses that prepare first, will be best positioned to succeed.
The COP27 delivered partial success in an agreement on a fund for those vulnerable countries; however, it still needs to provide an understanding of the most basic requirements for stopping the current climate breakdown. That is mainly to slash the burning of fossil fuels as promptly as possible. In the meantime, life carries on. Like in the story that follows, it is not building better with less at this conjecture and not about decarbonising all active ingredients but, like Azerbaijan sharing investment plans within the concept of ‘smart’ cities and villages.
Azerbaijan shares investment plans within concept of ‘smart’ cities, villages
BAKU, Azerbaijan, November 21. Azerbaijan cooperates with the world’s leading companies in the building of ‘smart’ cities and villages, Azerbaijani Minister of Digital Development and Transport Rashad Nabiyev said on November 21 during an international conference on ‘smart’ cities and villages, being held in Baku, Trend reports.
According to Nabiyev, the concepts of ‘smart’ cities and villages contribute to the efficient use of water and other natural resources.
“In the next five years, $2.5 trillion will be invested in these concepts. Azerbaijan has been working in this direction since 2020. Our ministry has studied the experience of leading countries when elaborating on the concepts. Within the framework of the ‘Online Azerbaijan’ concept, large-scale work is being carried out to integrate state systems, switch to ‘cloud’ technologies and other work,” the minister noted.
Besides, Nabiyev noted that the effectiveness of the concept of ‘smart’ cities and villages may differ depending on the region.
“When implementing these projects, we take into account the factor of development of local companies and their localization,” he said.
The minister pointed out that over the past two years, 472,000 households in Azerbaijan have been provided with fiber-optic communication, and by 2024 even the most remote villages will be provided with it.
Speaking about the development of these projects, Nabiyev said that more attention should be paid to ensuring the security of information systems.
“In the next three years, 932 highly qualified specialists in the field of cybersecurity will be trained in Azerbaijan,” he added.
Unfortunately, those Western governments with decision making power and resources to help vulnerable countries respond to the polycrisis are not inclined to use it, given domestic cost-of-living crises in G7 countries, the ongoing conflict in Ukraine, and limited domestic political appetite for international initiatives.
In October, the International Monetary Fund (IMF) published what is perhaps its most bleak economic outlook in a decade, forecasting that the world economy will grow by only 2.7 percent in 2023 and warning that “the worst is yet to come.” Not since the global financial crisis of 2007–2008 have we seen such pressure on vulnerable countries grappling with what Carnegie scholar Adam Tooze describes as “polycrisis.” Climate change, food and energy price inflation, debt distress, and an ongoing pandemic have created a dynamic where, in Tooze’s view, “the whole is even more dangerous than the sum of the parts.”
This constellation of crises demands that G20 leaders design a new global financial architecture that delivers urgent liquidity for vulnerable countries, a solution for countries facing debt distress, and long-term financing at an order of magnitude greater than currently available—all while giving those vulnerable countries a more meaningful voice in the design of that architecture.
This polycrisis comes to its most acute head within the twenty-five countries that, according to Bloomberg, are most vulnerable to debt distress. Home to 1.5 billion people, they range from middle-income countries like Pakistan and Egypt to low-income countries like Ethiopia. And while the UN’s Food Price Index has retreated from the all-time highs that appeared immediately in the wake of Russia’s invasion of Ukraine, food prices remain higher than they were during the crises in 2008 and 2010—the latter of which precipitated unrest in more than forty countries as well as contributing to the Arab Spring protests. This is happening against a backdrop of increasing extreme weather events—from historic drought in the Horn of Africa to devastating floods in Pakistan that displaced 33 million people. In the first half of this year, extreme weather events cost an estimated $65 billion in damages globally.
Such an unprecedented cocktail of volatility is systemic in nature and is, in part, created by the collective inability of the world’s most powerful governments to build a multilateral system more resilient to these shocks. At a minimum, it warrants an unprecedented response from the international community. Unfortunately, those Western governments with decisionmaking power and resources to help vulnerable countries respond to the polycrisis are not inclined to use it, given domestic cost-of-living crises in G7 countries, the ongoing conflict in Ukraine, and limited domestic political appetite for international initiatives.
A DANGEROUS MYOPIA ON THE PART OF WESTERN LEADERS
Taking a step back, if leaders from Europe and North America have thus far been reluctant to meet the current crisis moment, this is myopic for two reasons.
First, helping vulnerable countries avoid widespread hunger, mitigate debt distress, and build resilience to climate shocks is not charity but enlightened self-interest. It will contribute to stability in those nations and help avert the challenges created when large populations migrate to flee conflict and famine in search of economic opportunity. Europe’s so-called migration crisis in 2016, which helped fuel a wave of populism on the continent, was catalyzed in part by instability in Libya and Syria.
Second, Western countries are increasingly aware that their relationships with countries in the Global South are not what they assumed. A succession of UN General Assembly resolutions condemning Russia’s actions in Ukraine, most recently on October 12, 2022, saw many African countries abstain (see figure 1). While there are a number of reasons for such nonalignment, it is clear that some African countries want to be free to chart their own path and choose their own partnerships—and that the choice of partners depends in part on what the partner country can bring to the table.
In this regard, the West risks falling behind. Russia, the largest supplier of weapons to Africa, now provides 44 percent of major arms to the region. China committed about $160 billion in infrastructure financing in Africa between 2000 and 2020 in comparison with $153.4 billion in official development assistance from the United States1. In June, China announced a restructuring of some African countries’ debts amid concerns of debt sustainability and agreed to co-chair Zambia’s creditor committee to address the restructuring of the country’s debt.
In contrast, leaders from the Global South at UN General Assembly meetings both in public and private have disparaged European countries for stepping back from their role as custodians of the multilateral system, for their lack of support during the coronavirus pandemic, and for a litany of promises that remain unfulfilled. While they are more positive that the United States is in listening mode, as reflected in the recently published U.S. Strategy Toward Sub-Saharan Africa, they remain wary that U.S. domestic politics could see a shift of administration in two years’ time.
A study of developing countries’ attitudes compiled by Rosa Balfour, Lizza Bomassi, and Marta Martinelli at Carnegie Europe demonstrated the disconnect between how Europe thinks it is perceived and how it is actually perceived in key countries of the Global South. In many cases, the role of Europe’s development programming remains invisible to citizens of these countries, while steps to use the EU’s market access to enforce human rights and environmental standards, viewed at home as a positive impact of Europe in the world, are perceived elsewhere as simple market protectionism.
Likewise, a large-scale survey of African youth conducted by the Ichikowitz Family Foundation shows that in 2022, China overtook the United States as the geopolitical superpower viewed most favorably—in part because its actions on the continent are so visible. Analysis from Afrobarometer (see figure 2) presents a similar trend.
THE WEST’S CRISIS RESPONSE IS FUELING MISTRUST IN THE GLOBAL SOUTH
There is a growing perception among Africans that African countries are victims of crises created in and by other regions. This view is rooted in fact: the global financial crisis began in the U.S. housing market, the coronavirus pandemic began in China, and industrialized countries in the Global North caused the climate crisis (Africa has contributed just 4 percent to historical carbon emissions). In each case, Western countries’ policy responses to these crises further disadvantage African countries.
During the pandemic, Western countries have monopolized vaccine supply, and the current response to the climate crisis sees some Western governments seek to limit the ability of African countries to exploit natural gas to support economic and social development—while those Western countries continue to use natural gas themselves.
Not only is inflation greater in African countries, but it also has a more devastating impact on ordinary people. Analysis in a new data portal from the ONE Campaign, where the author is executive director for global policy, shows that, in comparison to higher-income countries, a larger proportion of Africans’ income is spent on food and other essential goods, leaving them more vulnerable to inflation (see figure 3).
Yet the current inflationary challenges illustrate the failure of global economic governance institutions to prevent macroeconomic policy decisions by major powers from spilling over to the wider world and harming vulnerable nations
The U.S. Federal Reserve’s steep interest rate hikes in recent months to quell inflation in the United States will greatly impact other countries, particularly those with heavy debt burdens. The U.S. dollar is the world’s reserve currency. About half of international trade is invoiced in dollars, about half of all international loans and global debt securities are denominated in dollars, and dollars are involved in 90 percent of foreign exchange transactions. As a result, increases in interest rates are hitting vulnerable countries in a number of ways.
But while African countries’ fortunes are shaped by these global events, they have limited agency over the response, thanks in part to an outmoded global economic architecture created after the Second World War—before most African countries gained independence.
The Bretton Woods institutions—the International Monetary Fund and the International Bank for Reconstruction and Development (now part of the World Bank Group)—were established in 1944 to safeguard the stability of the international financial system and finance postwar reconstruction. But their governance remains archaic.
Under a long-standing “gentleman’s agreement,” Europe gets to choose the managing director of the IMF and the United States chooses the World Bank president. The voting shares of these institutions are highly unequal, since they are pegged to the size of shareholders’ economies. As a result, the United States, with a population of 330 million people, controls roughly 16 percent of the voting power at the IMF and World Bank, while Africa’s fifty-four countries—accounting for 1.4 billion people—collectively have a voting share of roughly 7 percent. Per capita, an American’s vote is worth twenty times as much as a Nigerian’s at the IMF, and sixty-four times that of an Ethiopian. And even on its own terms, current quota shares disproportionately benefit wealthy countries—particularly Europe—at the expense of emerging economies.
Increasingly, countries in the Global South are demanding a meaningful seat at the table of international institutions. These calls were particularly prominent at this year’s UN General Assembly. Indian Minister for External Affairs Subrahmanyam Jaishankar described the current architecture as “anachronistic and ineffective.”
We need to reform a morally bankrupt global financial system. This system was created by rich countries to benefit rich countries. Practically no African country was sitting at the table of the Bretton Woods Agreement; and in many other parts of the world, decolonization had not yet taken place. It perpetuates poverty and inequalities. We need to balance the scales between developed and developing countries and create a new global financial system that benefits all.
These increasingly emphatic statements are no longer general calls for reform. Instead, leaders from the Global South have an agenda and are putting specific proposals on the table.
In April, following Russia’s invasion of Ukraine, members of the Africa High-Level Working Group on the Global Financial Architecture, coordinated by the UN Economic Commission for Africa, proposed a specific set of measures to create fiscal space to help them respond to the invasion, including the recycling of $100 billion in special drawing rights, a renewed debt service suspension initiative, and a liquidity and sustainability facility to reduce the cost of African borrowing on capital markets.
Since then, Barbados’s Prime Minister Mia Mottley has proposed the Bridgetown Initiative, which seeks to address immediate fiscal concerns and proposes a more structural set of reforms to help vulnerable countries become resilient to economic, climate, and pandemic shocks.
Yet debates about Bretton Woods reform risk becoming fragmented in a political environment in which achieving the necessary consensus for reform is challenging. Furthermore, in an era of great power competition, G20 countries are unlikely to voluntarily give up some of their power in these institutions.
AS A RESULT, A FOCUSED AGENDA IS MORE LIKELY TO GAIN TRACTION.
Firstly, G20 countries should urgently take steps to provide the necessary liquidity to help vulnerable countries weather the economic storm and build resilience for the future. They should reinstate the debt service suspension initiative, which helped free up fiscal space during the coronavirus pandemic, and make good on their promise, made in October 2021, to provide emergency liquidity in the form of $100 billion in special drawing rights. To date, $81 billion has been pledged (including $21bn from the US that is yet to be appropriated by Congress) to this target but very little has been disbursed. These funds should be urgently committed to the IMF’s Poverty Reduction and Growth Trust, the IMF’s newly established Resilience and Sustainability Trust, and multilateral development banks (MDBs), enabling vulnerable countries to draw down these resources.
Second, the polycrisis requires long-term resourcing that is an order of magnitude greater that what is currently on the table. There is hope on this front. In October, ahead of the IMF and World Bank annual meetings, U.S. Treasury Secretary Janet Yellen signaled U.S. government support for the reform of MDBs relating both to how they lend and to how much they lend. Australia, Canada, France, Germany, Italy, Japan, the Netherlands, Switzerland, the United Kingdom, and the United States then announced an “evolution roadmap” for the World Bank to address its investment in cross-border challenges such as pandemic preparedness and climate change (in addition to its current model of bilateral lending to countries), and support for more risk-taking to more effectively leverage the World Bank’s balance sheet.
According to a G20-commissioned expert group, MDBs (including the World Bank) could mobilize up to an additional $1 trillion without risking their AAA credit ratings. The boards of the MDBs (largely composed of G7 finance ministers) should lay out a roadmap for implementing these recommendations and increasing the speed and flexibility of lending to vulnerable countries.
Finally, there are increasing calls for Global South countries to have a meaningful seat at the decisionmaking table. Establishing a permanent African Union seat at the G20 would send an important signal, and the IMF’s 2023 quota review could provide an opportunity for the creation of a new African chair on the IMF’s board as well as an increase in quota or a change in quota distribution in favor of African countries.
These specific steps would signal that Western countries are listening to countries in the Global South, provide urgent finance at a scale needed to address the current challenges, and catalyze a broader debate about the kinds of international institutions needed in the twenty-first century.
All of this could be accomplished without significant investments of domestic budgets or political capital. In this respect the usual explanations for inaction do not stand.
1 Author’s calculations of statistics from the Development Assistance Committee of the Organisation for Economic Cooperation and Development. See Organisation for Economic Cooperation and Development, Query Wizard for International Development Statistics (accessed October 18, 2022), https://stats.oecd.org/qwids/.
In the lead up to COP27 in Egypt, all eyes are on the region. The acceleration of the global energy transition poses critical challenges for the Middle East and North Africa (MENA), with the transformation evolving into an all-encompassing economic, social, and political project for the region. Exacerbating this shift are two main factors: the over-dependence on hydrocarbons, coupled with ongoing diversification drives and ambitious reform programs aimed at widening the economic base. MENA is one of the most climate-vulnerable regions, facing extreme high temperatures, worsening droughts and floods and sea-level rise. Importantly, given that climate change is a threat multiplier impacting the region’s growth and development, a proper response would require a multi-pronged approach, including policy, regulatory frameworks and sizeable financing. This piece primarily will focus on financing and on the role of existing international financial institutions (IFIs) and international organizations addressing this.
The need for diverse financing
Over the latest decades, climate disasters in the region have adversely impacted growth, fiscal (government) space and the external sector (exports, imports, financial flows). This has disproportionally affected fragile and conflict states, including communities at risk, aggravating poverty and inequality, and contributing to social tensions, migration and conflict. Therefore, to help MENA countries boost climate resilience, measures to promote climate adaptation and mitigation are a priority. More specifically, financing is needed to help scale interventions, from domestic to external sources, including the public sector, private and international sources.
Domestically, fiscal budgets need to incorporate climate adaptation– and mitigation-related investments, including adequate buffers to react to climate shocks, while simultaneously preserving debt sustainability. Governments in the region have benefited from financial solutions to meet their need for sustainable investments. In September 2020 and in an emblematic transaction, Egypt issued its first-ever green sovereign bond in the region, valued at $750 million, with a tenor of 5 years and an interest rate of 5.25%. Proceeds were earmarked for financing clean transportation, renewable energy, pollution prevention and control, sustainable water and wastewater management, energy efficiency and climate change adaptation. On the heels of this investment, preliminary data in 2022 suggest that Egypt is on track to achieving its Vision 2030 goal of increasing the proportion of green projects in its investment budget, from 14% in 2020 to 30% in 2022.
However, climate initiatives also require the mobilisation of private capital as a critical complement to that of the public sector. While banking systems in the Gulf remain well-capitalised, those in other countries remain weak, as in Algeria, Iraq and other fragile countries. Financial institutions in the region are characterised by concentrated lending to sovereign or government-led projects, reflecting the outsized role of the state, including exposure to national oil companies, through syndicated bank loan financing, which will squeeze local liquidity.
Leveraging international financiers and multilaterals
One way the international community provides climate financing to MENA is through multilateral, predominantly non-concessional terms and debt instruments, and through bilateral finance, primarily on concessional terms. Key contributors include European countries, with France (through Agence Française de Développement [AFD]) and Germany (through KfW or the German Agency for International Cooperation [GIZ]) taking the lead on individual country and regional programs – and a host of other peer nations, including Japan, contributing through other channels such as the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and multilateral climate funds (notably, the Clean Technology Fund and the Green Climate Fund). The Islamic Development Bank also plays a role in climate change initiatives, co-financing projects with the EBRD and others.
Other forms of IFI financing include senior or mezzanine debt or equity and can take on hybrid forms, such as blended finance. This is when an IFI’s own account finance (from its balance sheet) and/or commercial finance from other investors is ‘blended’ with concessional finance from donors, or third parties, to develop private sector markets. Indeed, a climate project is not fully commercial on a standalone basis and needs a temporary subsidy to enable its high-impact, without which it would not otherwise materialise.
The largest contributions are from the Clean Technology Fund, one of the two multi-donor trust funds under the Climate Investment Funds framework, with an estimated pool of $5.4 billion in funds. More broadly, amongst the various climate funds, between 2003 and 2022 an estimated $1.6 billion of financing was approved for over 139 projects, whose scope was largely centred on mitigation efforts, despite pressing adaptation needs in the region, especially for water conservation and food security measures. Out of the total funding approved for the region, $560 million (approx. ~30%) has taken the form of grants. The two top recipients, Egypt and Morocco, have respectively received 29% and 19% of the total approved climate finance in the region.
The rising market of blue finance emerged in 2014. In the same way, the green space developed in response to increased carbon emissions, the premise of blue being centred on contributing to ocean protection and improved water management – an ever-growing challenge in water-poor MENA. In January 2022, IFC released its Guidelines for Blue Finance, which delineated how to structure, evaluate and monitor blue bonds and loans. This framework is supported by The International Capital Market Association (ICMA), which acts as a repository for promoting internationally accepted standards of practice.
For both green and blue assets, external second party opinion providers and third-party verification is becoming increasingly important, especially in bonds and capital markets, to address risks of ‘greenwashing’–that is, portraying an asset, investment or initiative as Environmental Social Governance-aligned where no real sustainability impacts exist–and similar risks resulting from ascertaining what qualifies as blue, to ensure the use of proceeds are being properly directed.
Given the region’s level of water stress means blue finance may provide an innovative financing solution in the region, to address not only more sustainable practices in wastewater and sanitation services, but also coastal resilience and interventions, especially in countries like Algeria, Egypt, Morocco and Tunisia, where erosion and increased flooding–together with overfishing in the Mediterranean–present a few challenges. The World Bank is currently engaged in the region through MENA Blue, whose program is designed to strengthen physical, social and economic resilience, through technical assistance and the mobilisation of climate finance.
Such developments, together with the growing trend of investors demanding more transparency and accountability, will ultimately dictate where capital goes, impacting financial flows and growth within these economies.
Galvanising regional momentum
As COP27 inches closer, in a part of the world where climate change is acutely felt, the MENA region is facing a tremendous opportunity to benefit from, and contribute to, the global energy transition. Despite the country-specific idiosyncrasies, the region has been able to innovate and experiment with new technologies and financial approaches, supported by the state, and regulatory frameworks.
Ultimately, as climate vulnerabilities continue in intensity and frequency, thereby increasing loss and damage, countries in the region need to obtain diverse sources of funding to tackle adaptation and mitigation, to determine how best to rebalance transition risk, while ensuring long-term economic viability moving forward.
Originally posted on HUMAN WRONGS WATCH: Human Wrongs Watch (UN News)* — Disinformation, hate speech and deadly attacks against journalists are threatening freedom of the press worldwide, UN Secretary-General António Guterres said on Tuesday [2 May 2023], calling for greater solidarity with the people who bring us the news. UN Photo/Mark Garten | File photo…
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