Kenya risks losing 7% of GDP to climate change

Kenya is at a critical juncture when it comes to climate change and its impact on the nation's economy. A recent report by the World Bank has revealed that if urgent action is not taken, Kenya risks losing between 3.6 and 7.25 percent of its GDP by the year 2050 due to the effects of climate change. Dominick De Waal, a Senior Economist with the World Bank Group, joined CNBC Africa to shed light on the findings and the necessary steps that need to be taken. The report highlights the specific sectors that are most vulnerable, including labor, agriculture, and infrastructure. According to De Waal, the key factors contributing to the projected GDP loss are labor heat stress, which reduces productivity in outdoor jobs, especially in agriculture; damage to agriculture, both in terms of crop revenues and livestock output; and infrastructure damage from heat and floods. The impact of these vulnerabilities on the economy could be significant, with implications for growth and development in the country. One of the key points raised in the report is that simply focusing on economic growth will not be sufficient to counteract the effects of climate change. While faster growth could help somewhat, it is essential for Kenya to diversify its economy away from a heavy reliance on agriculture and invest in climate action across three domains: natural capital, human capital, and physical infrastructure. This approach will not only make the country more resilient to climate change but also drive sustainable development. The report emphasizes the need for significant financial investment in climate mitigation and adaptation efforts. The government of Kenya estimates that around $62 billion will need to be spent by 2030 to address these challenges. While a portion of this funding will go towards mitigation measures, the report underscores the importance of investing in adaptation strategies, particularly in sectors like agriculture. When it comes to funding green initiatives, De Waal highlights the imbalance between resources allocated for mitigation and adaptation. Currently, approximately 90% of climate finances are directed towards mitigation, leaving a significant gap in funding for adaptation. To bridge this divide, it is crucial for Kenya to attract finance from various sources, including public and private sectors, climate finance, and carbon finance. Clear, targeted programs in areas such as landscape restoration can help streamline funding efforts and accelerate climate and development action. In conclusion, the report calls for a shift from pledges and commitments to concrete action. It is time for Kenya to prioritize operationalization and translate discussions into tangible projects and programs. By adopting a comprehensive approach that brings together various stakeholders and financiers, Kenya can take meaningful steps towards building a climate-resilient economy and securing a sustainable future for its citizens.