Kenya is foregoing billions of dollars in untapped climate financing opportunities despite their considerable potential.
While more startups are venturing into the sector, industry experts argue that the current number is insufficient to adequately combat climate change.
Pangea Accelerator founder Jonas Tesfu said Kenya needs to have a lot of innovative businesses join climate change initiatives and a lot of funding towards the sector if it’s to be successful.
“For instance, blue carbon is a $40-billion (Sh6.4 trillion) market a year today but if you look at how many businesses in Kenya are specialising in this or are trying to find solutions to this challenge you will not find any,” said Tesfu.
He said a 40-billion-dollar opportunity is available in the market but nobody is capitalising on this.
According to the government updated (Nationally Determined Contributions) NDCs, the costs of climate action were estimated to be $62 billion (Sh9.9 trillion) up to 2030.
By maintaining a low-carbon growth path, Kenya could contribute to the global decarbonisation agenda and become more competitive in green markets and low-carbon supply chains.
Tsefu said while businesses are currently not doing anything wrong, there should be a lot of businesses in certain sectors but in Kenya that’s not the case.
“The biggest issue we are having is finding businesses that are investible in the climate space. In January 2024 we need a lot more businesses in the climate change, nature based solutions, blue economy and ocean sector,” added Tesfu.
According to the World Bank Kenya remains vulnerable to frequent climatic shocks that pose significant economic risk.
Without adaptation measures, the impact from climate change could not only disproportionately affect the poor, but also result in real GDP losses of up to 7percent from the baseline by 2050.
Kenya is a relatively low emitter of greenhouse gases (GHGs) generating less than 0.1 percent of global GHG emissions although its emissions have more than doubled since 1995.
“Kenya can achieve climate positive development and be part of the global climate solution by infusing climate change considerations into the management of its natural assets, positioning its human capital to be resilient to climate change and benefit from low-carbon growth, and mobilising investments in resilient and low-carbon infrastructure,” said World Bank Country Director, Keith Hansen.
In September President William Ruto signed into law the Climate Change (Amendment) Bill 2023, setting the stage for the regulation of carbon markets.
With the new law, Kenya joined several countries globally, including South Africa, India, Indonesia, and Vietnam, in efforts to set up domestic carbon trading markets as the need for more financing towards combating the adverse effects of climate change.