In a world where funding for fossil fuel investment is waning, a $1 trillion climate change fund from the International Finance Corporation (IFC), an arm of the World Bank Group can present a system of autarky for Nigeria’s fight against climate change.
Across the world, investors are now shifting attention from traditional funds to sustainable funds like ESG investing or strategies that consider a country’s environmental, social and governance ratings alongside traditional financial metrics.
According to Temilola Sonola, IFC’s EDGE and Green Building Market Transformation Programme Contact for Lagos, climate change was the biggest thing being considered at the moment at the World Bank because of the financial institution believes that the issue could help them to fulfill their mandate of getting people out of poverty.
“We also believe that it’s a good investment opportunity; so if you see climate change right now as not making money, you are wrong. The reason being that we recently did a report that said that in the world generally, the opportunity in terms of climate change is over $24.7 trillion,” She said at an industry event.
She added, “for Africa, that is over $1 trillion, and who do you think that the chunk of it is going to go to in Africa? Definitely in Nigeria; so Nigeria will probably get about seven per cent of that $1 trillion of investment opportunity”.
Nigeria ranks 158 out of 182 countries, ranked by Notre Global Adaptation Initiative (NGAI) using 45 indicators. This places the country as one of the most vulnerable to climate change imbalance, as it is the 53rd most vulnerable with a vulnerability score of 0.5.
Vulnerability score to climate change imbalance is measured across the performance in six life-supporting sectors, these are food, water, health, ecosystem service, human habitat, and infrastructure. This poor rating of the country placed it in the upper-left quadrant of readiness and vulnerability to climate change.
Data shows that the readiness level of Nigeria to tackle the challenges of climate change is poor, making it 179th most ready country for climate change adaptation, scoring 0.25.
A report by KPMG, a global network of auditing firm, said for countries to mobilise investments for sustainable infrastructure, they will need to focus on key parameters, such as increasing the supply of bankable and viable sustainable infrastructure projects, raising the attractiveness of local currency green bonds and structuring clear reporting standards for green investments.
The report noted that commitments from corporates and governments towards a net-zero carbon emissions roadmap should incentivise attraction towards sustainable finance.
In Asia, sustainable investments are already gaining ground. For instance, Japan is seeing a fast rise in sustainable investments with relevant assets managed growing from just $7 billion in 2014 to $474 billion in 2016 and quadrupling to $2.18 trillion in 2018, according to the Global Sustainable Investment Review.
Total sustainable investment assets now account for 18 percent of all professionally managed assets in Japan.
Nigeria scored low in all the life-support parameters, with each of them playing a defining role in climate change adaptation. Food score captures vulnerability in terms of food production, in which Nigeria scored 0.591, ranking 148th.
Water score shows adequate provision of fresh water from clean sources. Nigeria scored 0.488, ranking 145th, the country ranked 68th in the ecosystem segment with a score of 0.431. This segment defines the resources humans depend on for climate change adaptation.
In the health segment, Nigeria scored 0.595, ranking 138th. This projects the rate of communicable disease spread and health service provision to tackle them. The low living conditions which exposed citizens to climate extremes made Nigeria to score 0.621, ranking 159th in the habitat segment.
Also, the lack of coastal and energy infrastructure gave the country a score of 0.274, ranking 34th in the infrastructure segment.
Changes in weather affect agricultural activities, which poses a great threat to food security. It affects agricultural productivity because the climatic condition is one of the major determinants of the rate of farm productivity.
Increased rainfall has led to widespread effects of flooding across the southeast and northeastern parts of the country. Lack of an adequate drainage system has led to the flood waters washing off existing infrastructure and farmland. Moreso, this has washed off the topsoil, which has further consequences for agricultural productivity.
There are great consequences of changing climatic conditions in water sources in the country. Nigeria is exposed to the danger of water stress caused by the changing climate. This will affect the livelihoods of millions of households, worsening food security and livelihoods, and increasing the risk of violent conflict – farmer-herder crisis.
Change in the climate poses not only a threat to humans but also to the ecosystem (greenhouse gas emission). This will have an adverse effect on the economy, as the economy depends majorly on natural resources such as agricultural activities and crude oil.
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