Climate finance is crucial to meeting the challenges of global climate change and promoting the sustainable development of the Cabo Verdean economy. The mobilisation of adequate financial resources, with a focus on climate issues, is essential to support mitigation and adaptation measures and build resilience in the implementation of PEDS II programmes, especially in an economy that is extremely vulnerable to climate impacts.

“According to the Intergovernmental Panel on Climate Change (IPCC, 2021), with an increase in the average global temperature of 1.5ºC by the end of the century, with a high degree of certainty, the average annual temperature in Cabo Verde could increase by between 0.5ºC and 1.5ºC and rainfall would decrease by between 5% and 10%. If the increase in average global temperature by the end of the century is 2.0ºC, we could see an increase in average annual temperature of between 1.0ºC and 2.0ºC and a decrease in rainfall of up to 20%. It is clear that these scenarios are not favourable to Cabo Verde and, as a result, there will be a rise in sea level, causing coastal erosion and saltwater intrusion into agricultural land; worsening drought and hydro-meteorological risks (floods and inundations), resulting in possible landslides, impacting people and infrastructure; increased air temperatures, causing heat stress to habitats, biodiversity and people; increased coral bleaching events, subsequently degrading coral habitat for reef fish, affecting fish catch through artisanal fisheries” (PEDS II, page 106). 106).

The previous paragraph shows that climate change can affect Cabo Verde’s entire planning and sustainable development process, with an impact on the development of sustainable tourism, the promotion of a dynamic industry, the utilisation of the agricultural and fishing value chain, as well as the promotion of the blue economy, the digital economy and investments in resilient and sustainable infrastructures.

As Cabo Verde is a SIDS economy, with a low level of contribution to climate change and, in turn, strongly impacted, in order to guarantee its sustainability it must include climate change at the heart of the implementation of the reforms and programmes in its strategic plan. This has been the case. Such is the fact that PEDS II includes a new pillar focussing on the environment and climate change. A new approach to climate governance has been instituted, led by the Head of Government; a secretariat for climate change has been created; and all of the government’s decisions on structural reforms now include issues of climate risk and change, such as the new PPP law, the Public Enterprise Sector Law, the proposal for the National Investment System decree-law, the proposal for the Monitoring and Evaluation System decree-law, the institution of Climate Markers in the State Budget, etc.

Climate finance is therefore crucial to meeting the challenges of global climate change and promoting the sustainable development of the Cabo Verdean economy. The mobilisation of adequate financial resources, with a focus on climate issues, is essential to support mitigation and adaptation measures and build resilience in the implementation of PEDS II programmes, especially in an economy that is extremely vulnerable to climate impacts.

This article explores strategies for increasing climate finance, highlighting the importance of a collaborative approach between governments, the private sector and international financial institutions, with a focus on Cabo Verde’s participation in the next Conference of the Parties (COP).

The COP is an annual meeting where signatory countries to the United Nations Framework Convention on Climate Change (UNFCCC) meet to discuss and negotiate global actions against climate change. COP29, which will take place this year in Azerbaijan, will be a crucial event for mobilising climate finance, especially for vulnerable countries like Cabo Verde.

Although there is still some discussion and alignment around climate, there is a firm commitment at international level to mobilise funding for climate policies. There is clear convergence that climate change is a global challenge that requires a significant financial effort for both mitigation and adaptation. It is in this spirit that Cabo Verde must be inserted to finance its development policies, anchored in climate change.

Cabo Verde is highly vulnerable to extreme weather events such as droughts, floods and rising sea levels. In addition, the scarcity of natural resources, dependence on imports and limited domestic financial capacity make it difficult to implement robust adaptation and mitigation measures. This is why the entire development finance strategy must be effectively aligned with climate finance.

In order to focus on climate finance, it is necessary to show the country’s full commitment to international commitments to reduce emissions, as well as the adoption of best practices in the implementation of development policies aligned with climate issues.

However, in addition to demonstrating alignment with international practices, the country must clearly mark its position and determine the alignment needed for policy implementation. It needs to determine the path it wants to take in the coming years. Defining a strategy for mobilising climate funds, with well-defined projects and funding needs, is extremely important for this journey.

Cabo Verde must therefore continue to seek support from multilateral institutions, such as the Green Climate Fund (GCF) and the Global Environment Facility (GEF), but also focus on new partnerships, as well as demonstrating a clear strategy for bilateral partnerships with developed countries, including swapping debt with creditors for green investment.

This process cannot be developed without a clear partnership with the private sector. The country must encourage private sector investment in renewable energy projects, water management and resilient infrastructure, as an effective way of complementing public funds.

With an open international community and a vibrant private sector, the country must continue to invest in effective endogenous capacity building and institutional strengthening. This is the only way to invest in the development of well-designed and well-founded projects, which increase the chances of approval and funding from international institutions.

Of all the things the country has done in terms of climate governance, progress must be made with the implementation of all the mechanisms created in order to improve transparency and governance in the management of climate resources, which will allow more investment to be attracted and funds to be channelled from international partners. Cabo Verde should be seen as a reference country at international level in terms of climate policies. It must show its policies to the international community and impose its position.

During COP29, developed countries are expected to increase their financial commitments, not only by reaching the 100 billion dollars a year they have pledged, but also by setting new, more ambitious targets for the following years, and by simplifying the procedures for accessing climate funds for less developed countries. COP29 represents a vital opportunity to strengthen global climate finance and, in particular, to support vulnerable countries like Cabo Verde. Mobilising adequate resources, building institutional capacity and implementing innovative technologies are essential pillars for tackling climate challenges. Cabo Verde must recognise the urgency of these actions and ensure that its strategy is aligned with the demands of this COP’s objectives. Now is the opportunity for the country to take advantage of climate finance in order to finance its sustainable development path.

Author

Gilson Pina,
Ph.D. & National Planning Director