African Development Bank - Advancing Climate Action and Green Growth in Africa

African Development Bank — Advancing Climate Change Action and Green Growth in Africa The African Development Bank’s contributions to enhancing Africa’s efforts to achieve low carbon, climate-resilient development

African Development Bank — Advancing Climate Change Action and Green Growth in Africa

FRONT COVER PICTURE: Agricultural entrepreneur, Antoine Mani Tonye, tending to young cocoa shoots in his nursery in Assanzoa. Improved seed nurseries encourage quality cocoa shoots for a quick and abundant harvest to benefit Cameroonian growers BACK COVER PICTURE: The African Development bank has funded an alternative learning and skills development project in Zanzibar where two thousand students are being taught the basics in reading, writing and mathematics so that they can join the workforce

African Development Bank — Advancing Climate Change Action and Green Growth in Africa The African Development Bank’s contributions to enhancing Africa’s efforts to achieve low carbon, climate-resilient development ISBN 978-1-9160325-4-5 Original title: African Development Bank — Advancing Climate Change Action and Green Growth in Africa Text © African Development Bank. All rights reserved. Published in 2022 by Human Development Forum, a division of Tudor Rose www.humandevelopmentforum.org www.tudor-rose.co.uk DISCLAIMER The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of Tudor Rose concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by Tudor Rose in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the authors and do not necessarily reflect the views or policies of the publisher. Human Development Forum

Programme for the improvement of food and nutritional security, Sahel, Baboulaye Valley, Diofior, Senegal

i AAAP Africa Adaptation Acceleration Program AAI Africa Adaptation Initiative ACCF Africa Climate Change Fund ACEF Africa Circular Economy Facility ACPC African Climate Policy Centre ACSA Africa Climate-Smart Agriculture ADB African Development Bank ADF African Development Fund ADRiFi Africa Disaster Risk Financing AFAC African Financial Alliance on Climate Change AfCFTA African Continental Free Trade Area AfDB African Development Bank Group AFOLU Agriculture, Forestry, and Other Land Use AFRI-RES Africa Climate Resilience Investment Facility ARC African Risk Capacity AREP Adaptation Review and Evaluation Procedures AUDA African Union Development Agency AWF Africa Water Facility CCAP Climate Change Action Plan CIF Climate Investment Fund CDSF ClimDev Special Fund [Africa] COVID-19 Coronavirus Disease of 2019 CRMA Climate Risk Management and Adaptation Strategy CSP Country Strategy Paper CSS Climate Safeguards System ESS Environmental and Social Safeguards GCA Global Centre on Adaptation GCF Green Climate Fund GDP Gross Domestic Product GEF Global Environment Facility GWL Global Warming Level ICT Information and Communications Technology IDFC International Development Finance Club IPCC Intergovernmental Panel on Climate Change IPPF Infrastructure Project Preparation Facility ITMO Internationally Transferred Mitigation Outcome KPI Key Performance Indicator LTS Long-Term Strategy LULUCF Land-Use, Land Use Change and Forestry MDB Multilateral Development Bank MERL Monitoring, Evaluation, Reporting, and Learning MSME Micro, Small, and Medium-Sized Enterprises NAP National Adaptation Plan NDC Nationally Determined Contributions NDF Nordic Development Fund NEPAD New Partnership for Africa’s Development PECG Climate Change and Green Growth Department REDD Reduced Emissions from Deforestation and Degradation RISP Regional Integration Strategy Paper RMC Regional Member Country RMF Results Measurement Framework SDG Sustainable Development Goal STEM Science, Technology, Engineering, and Mathematics TAAT Technologies for African Agricultural Transformation ToC Theory of Change TSF Transition Support Facility UNDP United Nations Development Programme UNECA United Nations Economic Commission for Africa UNFCCC United Nations Framework Convention on Climate Change Abbreviations and acronyms

ii African Development Bank — Advancing Climate Change Action and Green Growth in Africa Amina Saed Al Haddad, owner of a company specialized for trade in seeds from Kafr Khuzam, one of the transformative African Development Bank projects in Egypt

iii CLIMATE ADAPTATION: The process of adjustment to actual or expected climate and its effects. In human systems, adaptation seeks to moderate or avoid harm or exploit beneficial opportunities. In some natural systems, human intervention may facilitate adjustment to expected climate and its effects (IPCC, 2014). ADAPTIVE CAPACITY: The ability of systems, institutions, humans and other organisms to adjust to potential damage, to take advantage of opportunities, or to respond to consequences (IPCC, 2014). CLIMATE CHANGE: A change in the state of the climate that can be identified (for example, by using statistical tests) by changes in the mean and/or the variability of its properties and that persists for an extended period, typically for decades or longer. Climate change may be due to natural internal processes or external forcing such as modulations of the solar cycles, volcanic eruptions, and persistent anthropogenic changes in the composition of the atmosphere or in land use. The Framework Convention on Climate Change (UNFCCC), in its Article 1, defines climate change as: ‘a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.’ The UNFCCC thus makes a distinction between climate change attributable to human activities altering the atmospheric composition and climate variability attributable to natural causes (IPCC, 2014). CLIMATE FINANCE: Local, national or transnational financing — drawn from public, private and alternative sources of financing — that seeks to support mitigation and adaptation actions that will address climate change (UNFCCC). The financial resources paid to cover the costs of transitioning to a low-carbon global economy and to adapt to, or build resilience against, current and future climate change impacts (Falconer & Stadelmann) DECARBONISATION: The process by which countries or other entities aim to achieve a low-carbon economy, or by which individuals aim to reduce their consumption of carbon (IPCC, 2014). GREEN GROWTH: A socially inclusive economic growth and development path that is low-carbon, climate-resilient, and resource-efficient; and maintains and enhances biodiversity and ecosystems (AfDB, 2021). Green growth is the pursuit of economic development in an environmentally sustainable manner (GGKP, 2016). GREEN JOBS: Decent jobs that contribute to preserve or restore the environment, be they in traditional sectors, or in new, emerging green sectors (ILO, 2016). MITIGATION (OF CLIMATE CHANGE): A human intervention to reduce the sources or enhance the sinks of greenhouse gases (GHGs). The IPCC definition also considers human interventions to reduce the sources of other substances which may contribute directly or indirectly to limiting climate change, including, for example, the reduction of particulate matter emissions that can directly alter the radiation balance (e.g. black carbon) or measures that control emissions of carbon monoxide, nitrogen oxides, volatile organic compounds, and other pollutants that can alter the concentration of tropospheric ozone, which has an indirect effect on the climate (IPCC, 2014). NATURE-BASED SOLUTIONS: Actions to protect, sustainably manage, and restore natural and modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits (IUCN). RESILIENCE: The capacity of social, economic and environmental systems to cope with a hazardous event or trend or disturbance, responding or reorganizing in ways that maintain their essential function, identity and structure, while also maintaining the capacity for adaptation, learning and transformation (IPCC, 2014). RISK: The potential for consequences where something of value is at stake and where the outcome is uncertain, recognizing the diversity of values. Risk is often represented as probability or likelihood of occurrence of hazardous events or trends multiplied by the impacts, if these events or trends occur. The term ‘risk’ is often also used to refer to the potential, when the outcome is uncertain, for adverse consequences on lives, livelihoods, health, ecosystems and species, economic, social and cultural assets, services (including environmental services) and infrastructure (IPCC, 2014). SUSTAINABILITY: A dynamic process that guarantees the persistence of natural and human systems in an equitable manner (IPCC, 2014). SUSTAINABLE DEVELOPMENT: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs (IPCC, 2014). VULNERABILITY The propensity or predisposition to be adversely affected. Vulnerability encompasses a variety of concepts and elements including sensitivity or susceptibility to harm and lack of capacity to cope and adapt (IPCC, 2014). Glossary of key terms

iv African Development Bank — Advancing Climate Change Action and Green Growth in Africa Farmer in the Bugesera valley. The Bugesera Agriculture Development Support project helps improve living conditions for farmers in Rwanda. The irrigation project has encouraged rice cultivation

v GREEN GROWTH is a socially inclusive economic growth and development path that is low-carbon, climateresilient, and resource efficient; and maintains and enhances biodiversity and ecosystems

vi African Development Bank — Advancing Climate Change Action and Green Growth in Africa Abbreviations and acronyms. .......................................i Glossary of key terms................................................ iii Introduction............................................................1 Climate change and development context.................1 Atmospheric warming................................................1 Greenhouse gas emissions. ........................................1 Climate change-related risks to development. ..............1 Physical risks to development.....................................1 Transition risks to development...................................3 Climate change and other priorities.............................4 The case for green growth. ........................................5 Concepts and building blocks of green growth............. 10 Green growth for sustainable development in Africa. ....................................................................... 13 Rationale for the Bank’s Strategy: Climate change and Africa..................................................... 15 Our commitment to climate action and green growth....................................................................... 18 CLIMATE CHANGE — CORE TO THE AFRICAN DEVELOPMENT BANK’S STRATEGIC FRAMEWORK............................ 21 The major socioeconomic, climate vulnerability, and green growth indicators across Africa............................................................. 22 Demography, population and GDP growth................... 22 Poverty and human development............................... 23 Health and education. .............................................. 24 Access to drinking water and improved sanitation........ 25 Climate action and greenhouse gas emissions. ........... 26 Climate change vulnerability..................................... 26 Agricultural productivity........................................... 29 Natural ecosystems and biodiversity.......................... 29 Access to energy and sustainability of the energy mix... 31 Access to infrastructure. .......................................... 33 Women’s empowerment........................................... 35 Financing and budgeting readiness.............. 37 Leveraging climate finance and mobilizing public and private sector resources for climate action and green growth. ............................ 39 Commitments under the new strategic framework:. .... 39 Resource mobilization, spending, and targets. ....... 40 Investment portfolio and pipelines. ......................... 41 Creating enabling environments for climate actions and green investments................................ 44 Commitments under the new strategic framework. ..... 44 Barriers to financing the blue economy. ................. 45 THE ROAD TO PARIS ALIGNMENT IN AFRICA............................................................ 51 Commitments under the new strategic framework. ..... 54 To give effect to its commitment to alignment with the Paris Agreement, the Bank will..................... 55 To accelerate the development of Paris-aligned investments, and investments consistent with the African Development Bank’s Climate Change and Green Growth Policy, the Bank will. ........................... 55 GREEN GROWTH IN AFRICA — CURRENT INITIATIVES AND FUTURE DEVELOPMENTS............................ 61 Introduction to the Second Climate Change Action Plan. .............................................................. 67 Introduction............................................................ 67 Vision and areas of activity under CCAP2. ................... 69 Scope of evaluation.................................................. 69 Outline of evaluation. ............................................... 69 Adaptation and climate resilient development........ 69 Introduction............................................................ 69 Adaptation and resilience across Africa. ..................... 71 Vulnerable sectors................................................... 71 Feed Africa. ............................................................ 72 Improving the quality of life of Africans....................... 73

vii Water resilience. ..................................................... 73 Adaptation actions................................................... 73 Adaptation challenges and needs............................... 73 Mitigation and low-carbon development. ................ 73 Introduction............................................................ 73 GHG emissions and development............................... 74 Nationally Determined Contributions (NDCs)............... 74 Lighting up and powering Africa. ............................... 77 Integrating Africa..................................................... 77 Climate finance. ....................................................... 77 Introduction............................................................ 77 The Bank’s funds..................................................... 78 The Bank’s climate finance. ...................................... 78 Finance needed....................................................... 78 Sources of finance. .................................................. 78 Enabling environment.............................................. 78 Introduction............................................................ 78 Mainstreaming climate change at the Bank................. 79 The Bank’s capacity. ................................................ 79 RMC capacity. ......................................................... 81 Partnerships and governance.................................... 81 Processes............................................................... 81 Monitoring, Evaluation, Reporting and Learning. ......... 83 Knowledge services................................................. 85 Knowledge generation.............................................. 85 Communication....................................................... 85 NDCs..................................................................... 85 Strategic areas of special emphasis........................ 87 Transition to green growth........................................ 87 Gender, youth and social inclusion............................. 89 Private sector development and participation.............. 89 Robust and resilient recovery.................................... 91 Convening power, partnerships, and activation of key actors..................................... 91 Institutional and RMC capacity enhancement. ...................................................... 95 KEY LESSONS AND RECOMMENDATIONS. ...................................105 Current situation....................................................107 Pillar 1 on adaptation and climate-resilient development..........................................................107 Pillar 2 on mitigation and low carbon development. ....108 Pillar 3 on mobilising climate finance........................109 Pillar 4 on creating an enabling environment. ............110 Other challenges and lessons...................................113 Recommendations. .................................................115 Climate change pillars. ...........................................115 Evidence-driven policies, strategies, and plans...........115 Atmospheric CO2 removals......................................115 RMF levels addressed by action plans and strategies. .115 Consider new financial approaches and models..........115 Support early-stage activities...................................117 Guidance and tools. ................................................117 Monitoring, evaluation, and reporting........................117 Reports.................................................................117 Internal capacity.....................................................117 External capacity....................................................117 Knowledge generation and sharing...........................119 Communication......................................................119 Limit climate change and related physical risks. ........119 Limit transition risks and the possibility of “stranded assets”...................................................119 Increased focus on sustainable development?............119 Lessons learned during the implementation period of the Second Climate Change Action Plan.119 Transition to green growth.......................................119 Gender, youth and social inclusion............................119 Private sector development and participation.............121 Robust and resilient recovery...................................121 Conclusion. ........................................................123

viii African Development Bank — Advancing Climate Change Action and Green Growth in Africa

ix Africa accounts for only 3% of global climate finance, amounting to about $20 billion in 2020. Yet, according to the African Development Bank’s 2022 Africa Economic Outlook, based on an aggregation of its NDCs, Africa’s needs are estimated at an average of $127 billion per year through to 2030. The Bank therefore seeks to increase Africa’s access to global climate finance from the current 3% to 10%

x African Development Bank — Advancing Climate Change Action and Green Growth in Africa

xi To bridge the climate finance gap, in 2021 the African Development Bank allocated 41% of its investments as climate finance, of which 67% was adaptation finance, against targets of 40% and 50% respectively. As such, the Bank was the first multilateral development bank to exceed 50:50 parity between adaptation and mitigation finance

xii African Development Bank — Advancing Climate Change Action and Green Growth in Africa

xiii The African Development Bank has committed to mobilizing $25 billion as climate finance by 2025. In 2021, the Bank and the Global Centre of Adaptation established the Africa Adaptation Acceleration Program to mobilize $25 billion for adaptation action on the continent, to which the Bank will contribute half of the amount

xiv African Development Bank — Advancing Climate Change Action and Green Growth in Africa

xv The African Development Bank released a new Climate Change and Green Growth Strategic Framework. In it, the Bank committed to aligning all new operations and financing flows with the Paris Agreement by end of 2023. The Bank also committed to align its support to the NDCs’ revision, long-term strategies for African countries, as well as aligning all its internal activities and reporting by 2025

xvi African Development Bank — Advancing Climate Change Action and Green Growth in Africa The African Development Bank foresees a climate-resilient, low-carbon, green, inclusive, integrated and prosperous Africa, strongly positioned to meet the challenges posed and harness the opportunities offered by climate change and green growth and justly transformed for the benefit of all Africans Family group, part of the Sao Tome and Principe infrastructure Rehabilitation For Food Security

1 Introduction Africa is the second-largest continent in the world, consisting of 54 independent nations with hugely diverse climates and ecosystems, human geographies, and economies. Spanning more than 30 million km2, Africa is approximately the same size as the USA, China, India, Japan, and Europe combined. The continent comprises five subregions with different climatic conditions, ranging from a Mediterranean climate in the far north and south to an equatorial/ tropical climate in the central and south-western regions, and arid conditions in the north, west, and south. East Africa, nearby islands and large parts of southern Africa have a subtropical climate. Due to these vast geographical and climatic variations, the continent has a unique and wideranging biodiversity that is crucial for supporting the livelihoods of its 1.25 billion inhabitants, and to sustain the planet’s life-supporting systems. Climate change and development context The evaluation of climate change and development context in Africa starts with the level of atmospheric warming over the continent. The second indicator addresses the global emissions gap between the path we are on and the path we need to follow. The worse the gap, the greater the likelihood that climate change will be a hazard to regional member countries (RMCs). With regards to climate change being a hazard, it is also important to have indicators of risk. Intergovernmental Panel on Climate Change (IPCC) assessments include maps of physical impacts and maps of physical risks, and an analysis of the “risk of future impacts” at different levels of global warming. In addition to physical risks, there are also transition risks. Physical and transition risks are increasingly being reported in climate-related financial disclosures. For transition risks, a key concern includes the potential for stranded assets. This includes fossil fuel reserves and related infrastructure as well as technologies that use fossil fuels to generate electricity. Atmospheric warming The Paris Agreement includes the aim of limiting global warming to “well below” 2°C while “pursuing efforts” to limit global warming to 1.5°C from pre-industrial times (UNFCCC 2015). Currently we have approximately 1°C of global warming. Meanwhile, in Africa we have had over 1°C of warming since the 1800s. Even though there are temperature variations over time, there is a clear trend towards warming. It is important to be aware that levels of atmospheric warming and other climatic changes differ across Africa and across seasons. This has implications for the distribution of impacts. Concerns related to climate change go beyond warming of the atmosphere and include impacts on the physical systems, biological systems, as well as human and managed systems (i.e. people, property, and livelihoods). The IPCC has made assessments of climate change impacts, and found Africa is already being impacted. Climatic changes have been observed in terms of warming, precipitation, and the frequency of hot, cold, and wet events. Due to these changes, there are impacts on physical and biological systems, as well as human and managed systems. This includes anything from South African farmers adapting to these changes to impacts on Sahel fruit trees. Climate change is also considered to have had a minor role impacting Great Lakes fisheries and Kenyan highland malaria occurrences. It should be noted here that it takes a great deal of research and data to attribute climate change impacts. There are likely to be more impacts, but data may be lacking or research has not yet been undertaken. Greenhouse gas emissions With regards to current global greenhouse gas (GHG) emissions trends, the UNEP Emissions Gap Report (2020) shows current pledges by countries in the form of NDCs are inadequate to limit global warming to well below 2°C from pre-industrial times. Hence, overshoot scenarios are a real possibility, meaning the accumulation of GHG emissions in the atmosphere driving global warming higher than 2°C. Furthermore, most GHG emissions scenarios that limit climate change to well below 2°C of warming include removing carbon dioxide directly from the atmosphere, and likewise, the IPCC identified atmospheric carbon dioxide removals by 2050 as being a key characteristic of 1.5°C pathways. Given the risk of there being global warming overshoot, this raises a question: How much physical risk is there to African development at 1.5°C and 2°C of global warming? Climate change-related risks to development Climate change–related risks include physical risks and transition risks.6 Physical risks regard potential physical impacts of climate change while transition risks regard potential disruption due to adjustments towards a climate-resilient low-GHG emissions economy. Physical risks to development The IPCC highlighted five overarching “reasons for concern” when it comes to climate change, and estimated the risk of impacts on natural, managed, or human systems according to the level Introduction

2 African Development Bank — Advancing Climate Change Action and Green Growth in Africa of global warming. Globally, we already have around 1°C of global warming. However, with 1.5°C of global warming the risk of impacts are generally moderate to high, and at 2°C the risk of impacts are moderate to very high. The IPCC (2014) also included an assessment of physical risks within Africa in its Fifth Assessment Report. The IPCC found nine key physical risks within Africa, consisting of: shifts in biome distribution; compound stress on water resources; degradation of coral reefs; reduced crop productivity; adverse effects on livestock; changes in incidence and geographic range of diseases; undernutrition; increased migration; and sea level rise and extreme events. For each of these physical risks, the IPCC highlighted related adaptation issues and prospects, climatic drivers, timeframes, risk levels; and the potential for adaptation. These are areas that could form a focus for the Bank’s future climate policy, strategy, and action plans. With regards to the Bank’s priorities and the High 5s, there is a challenge feeding Africa while also addressing compound water stress, reduced crop productivity, adverse effects on livestock, and the potential for undernutrition. Improving the quality of life for Africans also faces challenges related to changes in Areas most at risk from climate change in Africa Senegal Nigeria Angola Zambia Botswana Zimbabwe Mozambique Tanzania Kenya Ethiopia South Sudan Sudan Chad Niger Mali Sahara Desert Humid Moist subhumid Dry subhumid Hyper-arid Arid Semi-arid Areas most at risk from climate change

3 the incidence and geographic range of vector and waterborne diseases. The Bank’s support for development goals can help in this regard, for example, in relation to Water Sanitation and Health (WASH). Integrate Africa may face challenges associated with sea level rise and regional infrastructure passing through coastal areas. With regard to improving the quality of life for Africans, climate-related migration may also create challenges in addition to sea level rise disrupting coastal communities. Further, adaptation measures only reduce impacts, rather than eliminating them. Transition risks to development A key concern driving the reporting of transition risks is the potential for stranded assets.7 This includes fossil fuel reserves and related infrastructure as well as technologies that use fossil fuels to generate electricity. Quantities of gas, oil, and coal reserves could become stranded as restrictions, market conditions, and technologies (i.e., the transition) makes these resources non-viable to extract for the purposes of combustion. Africa has large natural gas reserves, along with oil and coal reserves. There is a risk that infrastructure put in place to extract and refine these resources may also become stranded, including oil refineries. Introduction Regional warming for the 2008–2015 decade relative to 1850–1900 Source: IPCC 2018 Annual mean Average for December–January–February Average for June–July–August 3.0 2.25 1.5 0.75 0.0 -0.75 -1.5 -2.25 -3.0 Estimated warming relative to 1850–1900 (°C)

4 African Development Bank — Advancing Climate Change Action and Green Growth in Africa Renewable energy makes up only a small part of Africa’s installed energy capacity whilst the combustion-based electricity generation capacity has grown creating the risk of stranded assets. The need for energy to light and power Africa is indisputable, but not enough of this energy is coming from renewable energy sources, hence the growing transition risk. Eventually the generation of electricity from combustible fuels will need to be replaced by low- and zero-carbon energy sources, in particular renewable energy generation capacity. Climate change and other priorities AidData (2018) noted that globally “leaders emphasize education, jobs, and strong institutions, but turn a deaf ear to climate change and other environmental goals.” This also applies to Africa with climate change only appearing in the top six ranked SDGs for 23.6% of leaders surveyed from Sub-Saharan Africa (SSH) and 11.1% of leaders surveyed from the Middle East and North Africa (MENA) region. Importantly, it is not just leaders that have climate change listed near the bottom of their priorities. SSH and MENA citizens surveyed as part of the UN’s MY World Survey (UNDG, 2013) also ranked climate change low on their list of priorities. Importantly, SDGs 4 (quality education), 16 (peace and justice), and 8 (decent work and economic growth) feature at the top of leaders’ priorities. Moreover, peace and justice, education, and health all featured highly in the priorities of citizens and leaders. AidData (2018), in their analysis, noted: “Comparatively, leaders turn a deaf ear towards climate change and other environmental goals. Despite considerable international attention in recent years, individual environmental issues related to climate action (SDG13), life on land (SDG15), life below water (SDG14), and responsible consumption and production (SDG12) fall to the bottom of most leaders’ development priorities. One possible explanation: leaders are loath to tackle issues that require large upfront costs in exchange for uncertain future benefits.” warming to well below 2°C from preindustrial times. Hence, overshoot scenarios are a real possibility, meaning the accumulation of GHG emissions in the atmosphere driving global warming higher than 2°C. Furthermore, most GHG emissions scenarios that li it climate change to well b low 2°C of w rming include removing carbon di xide directly from the atmosphere, and likewise, the IPCC identified atmosph ric carbon dioxide removals by 2050 as being a k y characteristic of 1.5°C pathways. Given the risk of there being global warming overshoot, this rais s a question: How mu h physical risk is th e to African dev lopment at 1.5°C and 2°C of global warming? Clim t change-related risks to development Climate change–related risks include physical risks and transition risks.6 Physical risks regard potential physical impacts of climate change while transition risks regard potential disruption due to adjustments towards a climate-resilient low-GHG emissions economy. 6 Physical and transition risks are increasingly being reported in climate-related financial disclosures, for example, following the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD). Physical risks to development The IPCC highlighted five overarching “reasons for concern” when it comes to climate change, and estimated the risk of impacts on natural, managed, or human systems according to the level f global warmi g. Globally, we already have around 1°C of global warming. However, with 1.5°C of global warming the risk of impacts are generally mo rate to high, and at 2°C the risk of impacts re moderate to very high. The IPCC (2014) also included an assessment of physical r sks within Africa in its Fifth Assessment Report (Figure 50). The IPCC found nin key physic risks within Africa, consis ng of: shifts in biome distribution; compound stress on water resources; d gradation of coral reefs; reduced crop productivity; adverse effec s on livestock; chang s in incidence and geographic range of diseases; undernutrition; increased migration; an sea level rise and extreme events. For each of these physical risks, the IPCC highlighted related adaptation issues d prospects, climatic rivers, timeframes, ris l vels; and th potential for adaptation. These are areas that could f rm a foc s for future AfDB climate policy, strategy, and action plans. Figure 49: Observed climate changes and impacts across Africa Source: Niang et al. 2014 A Observed climate change B Observed impacts AMU EAC/IGAD/ EGYPT ECOWAS ECCAS SADC 7 6 10 11 1 3 4 2 8 5 12 9 7 Regions used for the precipitation and temperature trends Regions used for the temperature trend only AMU SADC ECOWAS EAC/IGAD/Egypt ECCAS Unaffiliated Regional-scale Continental-scale Warming More frequent hot events/less frequent cold events Precipitation changes Change in wet events Physical systems Biological systems Human and managed systems Glacier retreat Southern species range Adapting South African farmers Great Lakes warming Mt. Kilimanjaro wildfires Great Lakes fisheries West African river discharge Western Sahel tree density Kenyan highlands malaria Sahel drought Coral reefs in tropical waters Sahel fruit trees Attribution of major role Attribution of minor role Very low Low Medium Confidence in detection Confidence in attribution High Very high Very low Low Medium High Very high Very low Low Medium Confidence in detection Confidence in attribution High Very high Very low Low Medium High Very high A B ANNEx 2: CLIMATE CHANGE AND DEvELOPMENT CONTExT 65 warm o well below 2°C from preindu trial times. Hence, ov rshoot scenarios re a real possibility, meaning th accumulation of GHG emission in the atmospher driving global warming higher than 2°C. Furthermore, most GHG emissions s ena ios that limit climate change to well below 2° of warming include r moving carb n ioxi e directl from the atmosphere, nd likewise, t e IPCC identified atmo pheric car o ioxide removals by 2050 as being key characteristic of 1.5°C p thways. Given he risk of ther b ing global warming oversho t, this raises a questio : How much physical risk is there to Afric n development at 1.5°C and 2°C of global warming? Climate cha ge-related risks to development Climate chang –related risks include physical isks and t ansition risks.6 P ysical risks regar po ntial physical i acts of clima e change while tra sition risks regard potential disruption due to adjustments towards a climate-resilient low-GHG emissions economy. Physical risks o devel pmen The IPCC highl ghted five overarching “reasons for concern” when it comes to climate change, and esti ated the risk of impacts on natural, managed, or human systems according to the level of glob l warming. Glob lly, we already have around 1°C of global warming. However, with 1.5°C of global warming the risk of i pacts are generally moderate t high, and at 2°C the risk of impacts are moderat to v ry high. The IPCC (2014) also included an assessment of phy ical isks within Africa in its Fifth Assessm nt Report (Figure 50). The IPCC f und nin k y phy ical risks withi Afri a, consisting of: shifts in biom distribution; ompound stress on water resources; degradation of coral reefs; reduced rop productivity; adv rs effects on livestock; changes in incidenc and geographi range of diseas s; und rnutrition; increased migration; a d sea level rise and extreme even s. For ach of these phy ical ri ks, e IPCC highlighted related adaptation is ues and prospects, cli atic drivers, timeframes, risk levels; and the potential for adaptation. These are areas that could form a focus for future AfDB climate policy, strategy, and action plans. Figure 49: Observed climate changes and impacts across Africa Source: Niang et al. 2014 A Observed climate change B Observed impacts AMU EAC/IGAD/ EGYPT ECOWAS ECCAS SADC 7 6 10 11 1 3 4 2 8 5 12 9 7 Regions used for the precipitation and temperature trends Regions used for the temperature trend only AMU SADC ECOWAS EAC/IGAD/Egypt ECCAS Unaffiliated Regional-scale Continental-scale Warming More frequen hot events/less frequent cold events Precipitation changes Change in wet events Physical systems Biological systems Human nd managed systems Glacier retreat Southern species range Adapting South African farmers Great Lakes warming Mt. Kilimanjaro wildfires Great Lakes fisheries West African river discharge Western Sahel tree density Kenyan highlands malaria Sahel dr ught Co al reefs in tropical waters Sahel fruit trees Attribution of major role Attribution of minor role Very low Low Medium Confidence in detection Confidence in attribution High Very high Very low Low Medium High Very high Very low Low Medium Confidence in detection Confidence in attribution High Very high Very low Low Medium High Very high A B ANNEx 2: CLIMATE CHANGE AND DEvELOPMENT CONTExT 65 Observed climate changes and impacts across Africa Source: Niang et al. 2014

5 The case for green growth It is widely accepted that sustained economic growth is a major driver of poverty reduction and human development, especially in developing countries. Evidence shows that rapid economic growth could pull more than 600 million people out of poverty and dramatically improve human development in regions across the world. However, it is also clear that the incumbent model of growth, which depends on an ever-increasing consumption of natural resources, is unsustainable and leads to a range of environmental problems, from rapid biodiversity loss and climate change to air pollution and the depletion of freshwater resources. This growth model ultimately results in a reduction of quality of life and will, in the long run, be ruinous to economies, human societies, and biodiversity. Introduction Rationale for the Strategy: Climate change and Africa The African continent is a minor contributor to global greenhouse gas emissions but is highly vulnerable to the adverse impacts of climate change, which threaten its economic development. Yet, the continent also has enormous opportunities to build resilience to climate change as well as transition towards low-carbon development. The Bank shares the commitments made by African countries to global climate change and green growth goals. The decade 2021 through 2030 is often r garded as the Decade of Action, due to many countries developing nationally determined contributions (NDCs) with targets for 2030 (updated every five years), and the critical milestones of the UN’s Agenda 2030 and the Sustain ble Development Goals (SDGs) – as well as the fundamental underlyi g fact that actions are required as soon as possible to prevent the worst potential future climate change impacts (IPCC, 2021). This decade will, therefore, be definitive in the global response to climate change. The global scientific community is in agreement that human influence on the earth’s climate is unequivocal, and that recent changes have had a widespread and unprecedented impact on humans and natural systems (IPCC, 2021). The Intergovernmental Panel on Climate Change (IPCC), the international standardbearer for climate science, has emphasized that future warming will cause further and “long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive, and irreversible impacts for people and ecosystems” (IPCC, 2014). The IPCC is also unequivocal that “limiting clima e chang would require substantial and sustained eductions in greenhouse gas emis ions, which – together with adaptation – can limit climate change risks” (IPCC, 2014). The earth has already warmed by more than 1°C above pre-industrial levels, and the most recent Figure 1: IPCC modelling of three temperature scenarios (top: 1.5°C of warming; centre: 2 °C; bottom: 4°C) and the corresponding effects on annual temperatures (left) and total precipitation (right) (IPCC, 2021) Annual maximum temperatures (TXx) 1.5°C global warming 2°C global warming 4°C global warming Annual minimum temperatures (TNn) Annual total precipitation Annual maximum daily precipitation (Rx1 day) Change (°C) 0 1 2 3 4 5 6 Change (%) -40 -20 0 20 40 IPCC modelling of three temperature scenarios (top: 1.5°C of warming; centre: 2°C; bottom: 4°C) and the corresponding effects on annual temperatures (left) and total precipitation (right) Source: IPCC 2021 Annual maxi um temperatures (TXx) 1.5°C glob l ing 2°C l arming al warming Annual mini um temperatures (TNn) Annual total precipitation Change (°C) Change (%) Annual maxi daily precipitatio ( x1 day)

6 African Development Bank — Advancing Climate Change Action and Green Growth in Africa Figure 2: The IPCC Sixth Assessment Report: Regional Fact Sheet – Africa highlights the different impacts of climate change across the continent by 2050 in a scenario with warming of at least two degrees (IPCC, 2021) Mediterranean (North Africa) • Projected decreases in mean precipitation, increases in fire weather conditions and decreases in mean wind speed; • Observed and projected increases in aridity, meteorological, hydrological and agricultural and ecological droughts. West Africa (WAF) • Observed increase in river flooding; • Observed increase in drying and agricultural and ecological droughts; • Projected increase in meteorological droughts at GWL 4°, mostly in seasonal timescales; • Projected increases in mean wind speed; increase in heavy precipitation and pluvial flooding. Central Africa (CAF) • Observed decreases in mean precipitation; • Observed decrease in standardized precipitation index (i.e deficit of precipitation); • Observed increase in agricultural and ecological droughts; • Projected increases in heavy precipitation and pluvial flooding; • Increases in river flooding. West Southern Africa (WSAF) • Observed decrease in mean precipitation; • Observed increase in heavy precipitation and pluvial flooding; • Observed and projected increase in aridity, agricultural and ecological droughts; • Projected increase in dryness from 1.5°C, higher confidence with increasing global warming; • Projected increases in mean wind speed; increases in fire weather conditions. Sahara including parts of the Sahel (SAH) • Projected increases in heavy precipitation and pluvial flooding. East Southern Africa (ESAF) • Observed decreases in mean precipitation; • Observed and projected increases in heavy precipitation and pluvial flooding; • Observed and projected increase in aridity, agricultural and ecological droughts; • Observed increase in meteorological drought, projected increase in meteorological droughts from 1.5°C, higher confidence at higher GWLs; • Projected increases in fire weather conditions; increases in mean wind speed; increase of average tropical cyclone wind speeds and associated heavy precipitation and of the proportion of category 4–5 tropical cyclones. Madagascar (MDG) • Observed increases in aridity; • Projected increase in meteorological droughts from 1.5°C, higher confidence at higher GWLs; increases in agricultural and ecological droughts types particularly at higher warming levels; • Projected increases in heavy precipitation and pluvial flooding; • Projected increase of average tropical cyclone wind speeds and associated heavy precipitation and of the proportion of Category 4-5 tropical cyclones. North Eastern Africa (NEAF) • Observed decreases in mean precipitation; • Observed and projected decreases in snow and glaciers; • Projected increases in heavy precipitation and pluvial flooding; • Projected decrease in meteorological drought at 4°C global warming. South Eastern Africa (SEAF) • Projected increases in frequency and/or the intensity of heavy precipitation and pluvial flooding; • Observed and projected decreases in snow and glaciers; • Projected increase of average tropical cyclone wind speeds and associated heavy precipitation and of the proportion of category 4–5 tropical cyclones. MED SAH WAF CAF NEAF SEAF ESAF WSAF MDG Monsoon region The IPCC Sixth Assessment Report: Regional Fact Sheet — Africa highlights the different impacts of climate change across the continent by 2050 in a scenario with warming of at least two degrees Source: IPCC 2021

7 The negative consequences of the incumbent fossil fuel- and natural resources-driven growth model have become apparent less than two centuries after it became dominant. Human activities have contributed to the warming of the planet by 1°C above pre-industrial levels (IPCC, 2018). Even if the current emissions reduction plans submitted by countries in INDCs, NDCs, and LT-LEDS (Long-term Low Emissions and Development Strategies) under the Paris Agreement are implemented in full, the planet will still see a temperature rise of 3.3°C by the end of the century (Climate Interactive, 2018). Unless countries reduce their production and consumption to sustainable levels, communities, economies and the natural ecosystems that support them will be seriously affected. Current production and consumption practices are leading to rapid biodiversity loss due not just to climate disruption, but also loss of habitat, overexploitation, invasive organisms, and pollution, as well as the interactions among these factors. The planet is already in the midst of a sixth mass extinction that will impact the history of life on earth and the supply of ecosystem services (Ceballos et al, 2017). According to WEF (2016), more than 30% of plastics used for packaging in modern economies end up in natural ecosystems, and the total volume of ocean plastics will grow with increasing consumption. If plastic use continues unchanged, there will be more plastics than fish in the oceans by 2050. The elevated concentration of CO2 in the atmosphere resulting from human actions is leading to increasing acidification of oceans, the ‘evil twin of climate change’. Scientists believe that in the past 200 years, the oceans have become 30% more acidic, a more rapid change than any other known to have occurred in the past 50 billion years (Smithsonian Ocean, 2018). Acidification affects marine ecosystems and thus threatens the food and nutrition security of millions of people, as well as livelihoods linked to tourism and the blue economy. In summary, as population growth and urbanisation continue, it is clear that pursuing high levels of economic growth and a good quality of life under the current growth model is not only unsustainable but will be disastrous for both economies and the planet. Evidence also suggests that economic growth in the past century has not benefited everyone. The gap between the rich and the poor continues to grow, and this unequal distribution of wealth has been found to be causing social and economic instability (Piketty, 2015). Alternative growth models must also address this inequality. The green growth model aims to turn these challenges into opportunities and simultaneously balance the economic, social, and environmental pillars of sustainable development. In other words, green growth offers a new approach to development that seeks to deliver economic growth that is both environmentally sustainable and socially inclusive. It places equal emphasis on the quality and sustenance of economic growth and the means for and pathway to sustainable development. Introduction point of no return in terms of risks and has therefore committed to taking country-level actions that would prevent a further rise to 2°C and beyond (UNFCCC, 2015). However, on the current trajectory, the world is heading towards a temperature rise exceeding 3°C from pre-industrial times by the end of this century (UNEP, 2020), and therefore towards myriad disruptions in planetary climate systems. Africa is already witnessing climate change, and is amongst the region that will experience the most devas ating consequences of projected climat trends. Ma y parts of our continent ar warming at a faster rat than e global average and facing an above-av r g sea-level rise (IPCC, 2021). Furthermor , our c tinen contains some f the world’s most si nificant climate change ‘hotspots’ (IPCC, 2019). Further sea-l vel rises caused by addition l global warming will contribute to i creases in the frequency and severity of coastal flooding in low-lying areas and along most sandy coasts, and in coastal erosion. Climate change will also amplify existing stress on water availability in Africa. The IPCC underscores that climate change will be superimposed onto several already waterstressed catchments and river basins. Water resources on the continent are subjected to high hydro-climatic variability over space and time, and are a key constraint on our continued economic development (IPCC, 2014). Recent IPCC model projections for future rainfall in Africa under three temperature scenarios (see Figure 1) demonstrate that the intensity of heavy precipitation events and pluvial flooding is expected to increase across East, West and Central Africa, while a likely reduction in total rainfall over northern Africa and southwestern Africa will increase drying and agricultural and ecological droughts. African countries, thus, have to prepare themselves for significant shifts in their ecosystems and biodiversity. ecosystems and natural resources. Additional complexity is derived from the fact that different regions of our continent will not face the same climate threats and stresses; and are also differently equipped to manage them. One of the biggest threats to Africa’s people and their way of life, as emphasized by the IPCC, is how climate change will interact with non-climate drivers and stressors to exacerbate the vulnerability of agricultural systems, particularly in the semi-arid are s and lands. Increa ing temperatures and changes in preci itation are very likely to re uce cereal crop produc ivity (incl ding maize and wheat), with strong adverse effects o fo d security. The IPCC also makes n te of emer ing evidence that high-value peren ial crops could lso b adversely affect d by a temperature rise. At a global mean temperatu e increase of 4°C, risks for Africa’s food s curit are assessed as v ry high, with limited potential for risk reductio t roug daptation (IPCC, 2014). Climate change is expected to i crease the challenges of pests, weeds, and diseases that affect crops and livestock (IPCC, 2021). Thus, climate change threatens to undo or weaken the progress fricans have achieved thus far on managing risks to food production from current climate variability and observed climate change. Figure 3 indicates projected crop yields for major cereals in three major regions of the continent through to mid-century (WMO, 2020). These declines will have significant ramifications for food security and nutrition. In terms of human health, climate change may increase the burden of a range of climate-relevant health outcomes through its impact on climatesensitive diseases (such as malaria and meningococcal meningitis) and health conditions (such as waterborne illnesses including cholera). Climate change is a multiplier of existing health vulnerabilities including insufficient access to safe water and improved sanitation, food insecurity, and limited access to health care and education – challenges Figure 3: Projected crop yield changes in percentages (%) for West and Central Africa, North Africa, and East and southern Africa under a high-emissions scenario (RCP 8.5) by the year 2050 (WMO, 2020, based on IFAD data) North Africa West and Central Africa East and Southern Africa 2020 2025 2030 2035 2040 2045 2050 10% 5% 0% -5% -10% -15% -20% -25% -30% Yield change (%) Year 2020 2025 2030 2035 2040 2045 2050 10% 5% 0% -5% -10% -15% -20% -25% -30% Yield change (%) Year 2020 2025 2030 2035 2040 2045 2050 10% 5% 0% -5% -10% -15% -20% -25% -30% Yield change (%) Year Sorghum Wheat Rice Millet Maize Projected crop yield changes in percentages (%) for West and Central Africa, North Africa, and East and southern Africa under a high-emissions scenario (RCP 8.5) by the year 2050 Year Year Year Yield change (%) Yield change (%) Yield change (%) West l frica East a r frica Source: WMO, 2020, based on IFAD data Maize Millet Rice Wheat Sorghum

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