UNEP: Abundant Green Business Opportunities in Africa

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by KnowESG
KnowESG_UNEP: Abundant Green Business Opportunities in Africa
Image courtesy of UNEP

Africa's private sector has the potential to strengthen its commitment to environmental sustainability while boosting economic prosperity, increasing GDP, raising income per capita, generating millions of job opportunities, and fostering collaboration among governments, businesses, and local communities.

This groundbreaking study, published by the United Nations Environment Programme (UNEP), sheds light on the remarkable opportunities that lie ahead.

Unveiled amidst the 19th session of the African Ministerial Conference on the Environment (AMCEN) in Addis Ababa, the Africa Environment Outlook for Business provides a compelling vision. It recommends that businesses adopt a comprehensive approach grounded in profit, people, planet, prosperity, peace, and partnerships.

Elizabeth Mrema, UNEP Deputy Executive Director, emphasised, "This report underscores the potential for policymakers to create a conducive environment for investments that address the triple planetary crisis. Robust regulatory frameworks, investments in research, innovation, and education, as well as the promotion of public-private partnerships and collaboration across governments, businesses, and local communities, can pave the way forward."

The report shines a spotlight on inspiring success stories of sustainable initiatives today and highlights data showcasing the immense growth potential across various sectors.

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Transforming Agriculture and Private Sector Investments in Nature

Making the shift to sustainable agriculture, which currently contributes around 17 per cent to sub-Saharan Africa's GDP. Embracing organic farming, precision agriculture, and agroforestry holds the key to enhancing productivity while minimising ecological impacts and averting food insecurity and biodiversity decline.

Digital technologies in agribusiness present a staggering market worth of US$1 trillion, offering a path to nourish Africa's burgeoning population, projected to reach 2.5 billion by 2050.

Efforts to combat soil erosion could yield net benefits of essential nutrients—such as nitrogen, phosphorus, and potassium—valued at US$62.4 billion annually.

Restoring nature has the potential to unlock a business value of $10 trillion and create an astounding 395 million jobs by 2030.

Harnessing the Blue Economy and Ecotourism

Through innovative research and strategic management of aquatic ecosystems, the blue economy's resilience—forecast to generate US$576 billion and 127 million jobs by 2063—must be upheld in the face of challenges like overfishing, pollution, and climate change.

Marine and coastal tourism emerges as a beacon of sustainable development in Africa, offering a potential value-add of over $100 billion by 2030.

Climate-Smart Pathways to Achieve Net-Zero Goals

Africa stands poised to lead the way in renewable energy solutions, tapping into abundant solar, wind, hydro, biomass, and geothermal resources that could contribute to a remarkable 6.4 per cent GDP increase from 2021 to 2050. The untapped potential of ocean renewable energy could satisfy 100 to 400 per cent of the current global energy demand.

Enterprises in the energy efficiency sector can provide transformative products and services, encompassing cutting-edge lighting systems, intelligent buildings, and efficient industrial processes.

An annual climate financing gap of $213.4 billion beckons innovative investors to drive Africa's climate resilience.

Africa's bountiful reserves of critical minerals offer a pivotal role in the electric vehicle revolution, solar PV cell technology, and wind turbine production.

Pioneering Circular Pathways

Opportunities abound in promoting sanitation, combating plastic waste, establishing recycling infrastructure, adopting sustainable packaging, managing e-waste, and fostering circularity in the agro-food industry.

Efficient supply chains and reduced food waste not only optimise resource utilisation but also meet the escalating demand for sustenance.

Plant-based proteins and robust food safety systems hold the potential to propel growth and sustainable practices.

Empowering the African Continental Free Trade Area (AfCFTA)

Sub-Saharan Africa's thriving fashion and textiles sector, valued at approximately $31 billion, presents avenues for sustainable material sourcing, recycling, ethical manufacturing, rental models, sharing economies, and consumer education.

Innovative prospects thrive in the African automotive market, where the dominance of used vehicles opens doors to vehicle recycling, battery reuse, shared mobility solutions, circular supply chain management, and skills development.

Addressing the Financing Gap for Environmentally Sound Technologies (ESTs) remains imperative. With only $6.07 billion flowing into the continent for ESTs in 2020, compared to a global technology value of $1.17 trillion, opportunities await.

A robust pipeline of ongoing sustainable infrastructure projects valued at $100 billion, coupled with additional potential projects valued at $257 billion, underscores Africa's diverse investment prospects on the journey to net-zero emissions.

The Untapped Potential of the African Voluntary Carbon Market

Africa's vast carbon credit capacity remains underutilised, concentrated in a mere five countries due to fragmented projects, regulatory uncertainties, and equitable distribution challenges.

Unlocking Africa's untapped potential could yield an additional 400 MtCO2e per year, equating to around US$7 billion per year by 2030.

Initiatives like the African Carbon Market Initiative (ACMI) and the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) advocate regional and global efforts to amplify the supply and demand for high-integrity carbon credits.

The report acknowledges distinctive hurdles faced by numerous African economies, encompassing limited investments, institutional capacities, scalability obstacles, high transaction costs, transportation constraints, and electricity accessibility. Prioritising upfront cost reduction, energy-efficient solutions, and innovative financing mechanisms is paramount for policymakers.

"Africa stands not only at the crossroads of immense climate, nature, and pollution challenges but also possesses a vibrant economic landscape, a youthful demographic, and the potential for decarbonisation, digital transformation, and the adoption of an environmental, social, and governance (ESG) framework for sustainable business," remarked Rose Mwebaza, UNEP Director and Regional Representative for Africa. "With this groundbreaking report, we aim to inspire African entrepreneurs and businesses, particularly those daring pioneers, to embrace green growth and contribute to the realisation of sustainable development goals."

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Source: UNEP

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