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Is green growth the answer?

|May 16|magazine11 min read

“Business as usual is dead. Green growth is the answer to both our climate and economic problems,”said Danish Prime Minister, Anders Fogh Rasmussen, back in March last year. It seems this sentiment is one shared among many – and Africa is no different.

Not only can green business respond to the public’s rising concern for sustainability, but there are also enormous financial gains to be had, a chance to contribute to the continent’s green targets and an opportunity to have an overall positive impact on the environment.

GBASE 2010 & NAIROBI GREEN WEEK

It is clear, when looking across the rest of the world, that a strong environmental stance is good business practice. And it seems Africa too is coming up to speed with this realization. In fact, this year’s Green Business Africa Summit & Expo (GBASE) in Nairobi, Kenya is operating under the theme ‘Sustainable Business as Vehicle for Africa’s Economic Growth and Social Uplift’, demonstrating a real effort to transform sustainable business in Africa.

Once known as the ‘green city in the sun’, Nairobi hosts the global headquarters of the United Nations Environment Programme (UNEP) and, during May and June this year, will again be awash with green as GBASE and Nairobi Green Week (NGW) take place. In fact, Kenya is leading the way in green business, with Kenyan President Mwai Kibaki declaring 2010 to be “green year” for the country in his New Year’s message: “Let us make 2010 the green year for Kenya”.

NGW, a first for East Africa’s green business hub, will involve the Nairobi business community, government and quasi-government institutions working on a common public-private partnership. The country will set out to embrace green and sustainable business, while enhancing the global green economy.

Similarly,GBASE is Africa’s first event to bring issues surrounding sustainability in the business environment, as well as green corporate social responsibility, to the continent’s mainstream. By outlining the many current and future green African business opportunities, the summit will set out to provide an insight into developing and enhancing profitable and sustainable business enterprises and practices.
 
LAGGING BEHIND?

However, although Kenya and many other African countries are making real headway in the green business arena, some believe Africa is lagging behind the rest of the world. According to the United Nations Environment Programme (UNEP), renewable energy projects with initiatives aimed at producing green energy remain largely underexploited in Africa. 

The UNEP assessment, published this March, stated that the growth in Clean Development Mechanism (CDM) projects under the Kyoto Protocol is “uneven”, with Egypt and South Africa claiming the lion's share of the continent’s 120+ carbon market projects up and running or in the pipeline.

However, it did highlight Kenya and Uganda as exceptions, with the number of CDM projects underway in these countries climbing from just two in 2007, to 15 and 12 respectively. In comparison, many African countries, including Zambia, Madagascar, Cameroon and Mali, only have one or two CDM projects, while Equatorial Guinea is among several countries that have none.

The results, described as “modest” when compared with Africa’s massive potential, reveal a cause for concern, as highlighted by UNEP Executive Director, Achim Steiner: “The growth of the carbon markets in Africa are both cause for optimism, and cause for concern.

“In order to realize only a few percentage points more of the massive potential for wind, solar, biomass and waste into energy schemes, action across a range of challenges needs to be stepped up,” he said. Steiner drew attention to private and trans-national banks and individual governments as being partly responsible for this, saying that there is a great deal more they can do “to make clean energy investments more attractive through innovative loans and forward-looking policies and smart market mechanisms”.

John Kilani, of the UN Framework Convention on Climate Change secretariat on behalf of the organizers of the Africa Carbon Forum, said that the groundwork has been laid for Africa to increase its participation in the carbon market. “You are bound to do business [under the Kyoto Protocol’s CDM] when you bring all of the key market players together: the investors, buyers and sellers. This [Africa Carbon] Forum is therefore bound to boost the number of carbon offset projects in Africa,” he said.

If Africa’s reinvigorated efforts and optimism materialize, it is estimated that the number of CDM projects in Africa could total around 245 by the end of 2012. And with the price of carbon at just over $13 a ton, these could be worth over $475 million; leading Africa to the ‘green economy’ status it is aiming for.