By Edward Mungai
Sub-Saharan African (SSA)
countries urgently require new economic models that integrate green growth in decision-making
and development planning. This is because the region is among the most vulnerable
to negative impacts of climate change and has limited adaption capacity because
of resource constraints and over reliance on natural resources.
The media is always awash
with stories of how SSA countries are being affected by intense weather related
natural disasters such as droughts, floods, and storms.
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| Hydroponic system of agriculture. TRF/Climate Innovation Centre |
These events have wide
ranging consequences, often directly destroying, or limiting the gains from economic
growth. Infrastructure is damaged, crops are destroyed, yields are reduced, homes
destroyed and sometimes communities are displaced.
Green economy provides an
economic case for addressing climate change through promotion of green
innovations. The transition to a Green Economy is unlikely to be straightforward.
It requires strong leadership particularly from the government and a
collaboration of all stakeholders and more so the private sector.
The government will need
to take the lead in creating the right enabling environment to support the
up-take and diffusion of green technologies. The investment and innovative
capabilities of the private sector are crucial for the transition to a green economy.
With climate change as a
reality, it poses a threat to resource availability; an innovative private
sector that can develop disruptive products, services and technologies to adapt
to climate change is required.
Unlike mitigation technologies,
which are concentrated in a few sectors such as energy, industry, and transport,
adaptation technologies are dispersed across all socio-economic sectors
including water, health, agriculture, and infrastructure. In addition, they should
be more adaptable to local circumstances, which mean that in addition to being
socially acceptable they can be made less capital intensive compared to
mitigation technologies.
This makes them more amenable
to small-scale interventions and can therefore be easily promoted by small and
medium enterprises (SMEs). Some of the green innovations required for
adaptation range from water efficient irrigation systems; water recycling and
purification; resilient building technologies; water management systems;
drought-resilient crops; insurance tools and early warning systems.
The role of SMEs in
promoting green innovations for climate change cannot be ignored. In Kenya for
instance, SMEs employ up to 80 per cent of the population and accounts for
about 45 per cent of the GDP.
This is a common trend in
other countries in Africa and hence the SME sector is very important to the
economic development. SMEs are closely integrated into their communities allowing
them to get products and services to hard-to-reach populations, they have local
knowledge of consumer demand and supply, and they can easily upgrade their current
products to adapt to their customers’ need and changing climate unlike large
corporations.
However, they face
multiple challenges when trying to grow their operations including difficulties
in accessing finance, lack of specialist knowledge and excessive regulatory burdens.
Incubation centers like the Climate Innovation Centres (CICs) have been set up
to specifically support entrepreneurs circumvent these challenges.
The CICs, supports enterprises
that are developing green innovations to address local climate change challenges.
The centers offer a suite of services key among them being access to financing
through various stages of the technology growth cycle.
At the early stage, CIC provides
proof of concept grants aimed at establishing technical and commercial viability
of the idea or business models through moving the technologies and products
across the stages with high risk of failure.
After the Proof of
Concept the enterprises are assisted to access other forms of financing as the
business requires chief among these being seed financing. This is aimed at
supporting companies in the next stage of their development where they require financing
for further market testing and business model validation, leading to a full market
rollout.
The other services that
CICs provides SMEs include business advisory services and training; access to technical
and office facilities; access to information and policy advice and advocacy.
The Kenya CIC for
instance was the first of the CICs to be established and is an initiative
supported by the World Bank’s infoDev and funded by Danida and UKaid. It is one
of the CICs being launched by infoDev’s Climate Technology Program (CTP). The
other CICs are in Ethiopia, Ghana, South Africa, Morocco, Vietnam, and the
Caribbean.
The role of developing
partners in supporting the development and deployment of green technologies is of
utmost importance.
Development agencies can
best support countries to make a transition to green economy effectively through
supporting SMEs, providing policy advice to design and implement effective green
growth policies; building human and institutional capacity; establishing
international and regional cooperation; facilitating stakeholder involvement;
and, communication to support green economy measures and encourage behavior
change; and technical support.
Innovation is key to green
growth. It helps separate growth from natural capital depletion and contributes
to economic growth and job creation. Business is the driver of innovation, but
governments should provide clear and stable market signals, for example through
carbon pricing, better standards for green growth as well as providing
mechanism for information the citizenry on the various options available to
green their consumption and production.
Edward Mungai is the Chief Executive Officer Kenya Climate
Innovation Centre (CIC). His E-mail address is emungai@kenyacic.org
Article available in Joto Afrika edition 17. Download a copy
of the newsletter here
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