Feature: Climate change financing a tall order for Zim

By The NewsDay | Apr. 5, 2022 | 5 Min read

Zimbabwe has been making strides in increasing food production though various programmes such as command agriculture and climate-proof farming method, Pfumvudza, which have assisted farmers with inputs for farming.

BY Melody Chikono Increasing agricultural production over the years has been Zimbabwe’s direct course to food security as most households rely on subsistence farming for livelihoods.

The revolution of agriculture involves developing a robust sector that has mechanisms of reducing vulnerability and increasing the resilience of farmers and farming systems to negative climate change impacts.

The Pfumvudza programme is based on conservation agriculture (CA) principles and it helps to climate-proof production to a certain extent.

While these are commendable interventions, the produce has, however, also been victim to climate change effects which has ravaged the globe.

Smallholder farmers in Zimbabwe are increasingly exposed to climate change risks such as droughts, dry spells, delayed seasons, floods, hailstorms, pests, diseases and many more, raising the need for climate change financing.

Zimbabwe’s national climate change policy seeks to create a pathway towards a climate resilient and low carbon development economy in which the people have enough adaptive capacity and continue to develop in harmony with the environment.

This is buttressed by the national climate change response strategy, national adaptation plan, the low carbon development strategy, national environmental policy and strategic document plus other strategic development policies, including the Ramsar Convention.

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The country’s National Development Strategy 1 (NDS 1) has prioritised climate action with specific strategies through mainstreaming of climate change and related financing in all national programmes, including strengthening early warning systems, promoting climate smart innovations and technology transfer.

It also seeks to strengthen capacity building and awareness on climate change adaptation and mitigation and upgrading meteorological radar seismology and weather station network, among other measures.

Zimbabwe is vulnerable to climate change due to its geographical location in the tropics to an extent that if the agricultural sector sneezes, the economy catches a cold because of the strong vertical and backward linkages.

As a developing country, Zimbabwe, therefore, suffers from the effects of climate change induced by industrialisation.

Government spending in mitigation is low, and as is the case with many least developed countries, is lopsided towards debt servicing, downplaying climate financing.

A study by the journal Cogent Social Sciences on understanding climate smart agriculture and the resilience of smallholder farmers in Umguza district, showed that climate smart agriculture (CSA) practices were beset by challenges pointing to the fact that government lacks a clear and coordinated policy and financing for CSA.

Deliberations at the recent Zimbabwe debt indaba exposed the gap that existed in climate financing and agricultural efforts, with experts calling for climate change financing as pivotal in fighting and mitigating climate change effects.

However, for developing countries like Zimbabwe, it has been a tall order.

While there were many options available for climate change financing, challenges like debt financing have been a stumbling block for Zimbabwe.

Climate Change and Energy Governance lead Byron Zamasiya this week said developing countries were spending five times more on debt servicing than on climate action and this was expected to rise to seven times, creating more loans, interest charges and exacerbating the debt burden for developing countries.

Zamasiya was presenting on climate justice and debt sustainability: leveraging debt sustainability to strengthen Zimbabwe’s climate change response at the just-ended Zimbabwe Debt Indaba in the capital.

“Developed countries are pushing for more funds for mitigation, while developing countries are pushing for more funds for adaptation. But African only emits 7% of the green house gases (GHGs). Does mitigation make sense?” he asked.

“Developing countries should push for unconditional access to climate finance from bilateral and multilateral financial institutions (preference should be grants and not loans). The United Nations Framework Convention on Climate Change should promote debt swaps for developing countries, especially when they meet commitments in the nationally determined contributions (NDCs).

“Developing countries endowed with transition minerals (such as lithium, copper, nickel and cobalt) should promote local value addition.”

Developed countries had a target of raising US$100 billion for climate finance in the 2016-2020 period and priority was on mitigation at a time financiers preferred loans and not grants.

They were then supposed to write proposals and access this money for adaptation and mitigation.

For Zimbabwe, these projects are outlined in NDCs, NDS 1 and Low Emissions Development Strategy.

Zamasiya said generally, there was an increase in loans from bilateral and multilateral financiers, but since the money is accessed as loans, it was difficult for developing countries like Zimbabwe to access it due to the poor macroeconomic environment and high debt risk given that Paris Club members also influence access to such finances.

However, there is a consensus that despite these challenges, developing countries need to access climate finance for climate action.

Also speaking at the same climate change response indaba, United Nations Development Programme senior economist Ojijo Odhlambo said Zimbabwe should consider green climate sustainability bonds which were conventional bonds raised in the domestic or international capital markets, the proceeds of which are used for projects that generate environmental benefits.

These, he said, were increasingly becoming an important source of green finance due growing demand as investors gradually commit to make responsible investments.

“There are also catastrophe bonds.

“These refer to high-yield debt instruments designed to raise money for companies in the insurance industry in the event of a natural disaster, that is, the issuer receives funding from the bond only if specific conditions, such as an earthquakes or tornadoes, occur,” Odhlambo said.

“On the other hand, climate risk insurance is designed to help protect individuals, small businesses or entire countries from permanent damage caused by the impact of extreme weather events. Such a scheme strengthens financial resilience in the short-term due quick disbursement of payments in case of emergency, and in the long-term can contribute to disaster risk reduction.”

Zimbabwe is responsible for 0,07% of global GHG emissions and as an agro-based economy, it relies on climate sensitive services for food income and economic growth.

But securing financing to help mitigate the effects of climate change will help the southern African nation fight the adverse effects and ensure food sustainability in the long term.