NAIROBI, November 17, 2023 — 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 7% from the baseline by 2050. Kenya is a relatively low emitter of greenhouse gases (GHGs) generating less than 0.1%of global GHG emissions although its emissions have more than doubled since 1995.
The inaugural Kenya Country Climate and Development report notes that not acting to address climate change will set back Kenya’s poverty reduction gains and increase inequality. Inaction against climate change could result in up to 1.1 million additional poor in 2050 in a dry and hot climate future scenario. Kenyan households are already experiencing the effects of climate change. To cope with climate and other shocks, 37% of affected households reduce food consumption and 33% look for additional income sources, taking a toll on Kenya’s human capital.
Multiple key sectors critical for Kenya’s economic transformation are also impacted by climate change. Today, 70% of disasters from natural hazards are attributable to extreme climatic events. A considerable portion of public infrastructure is vulnerable to hazard risk. Kenya’s largely rainfed agriculture and pastoral systems are highly vulnerable to climate change. Heat stress from increased temperature due to climate change is expected to impact outdoor labor productivity (e.g., low-skilled and agricultural labor) the most. Furthermore, death and illness due to malaria and water borne diseases are expected to increase by 56% and 10% respectively by 2050.
According to the Government of Kenya’s updated (Nationally Determined Contributions) NDCs, the costs of climate action were estimated to be $62 billion up to 2030. By maintaining a low-carbon growth path, Kenya could contribute to the global decarbonization agenda and become more competitive in green markets and low-carbon supply chains.
“The Africa Climate Summit’s Nairobi Declaration committed to propel Africa's economic growth and job creation in a manner that not only limits emissions but also aids global decarbonization efforts,” said Kenya’s Cabinet Secretary for the National Treasury and Planning, Professor Njuguna Ndungu. “This Country Climate and Development Report is an important first step in defining a resilient and low-carbon development growth path that could help Kenya leapfrog traditional industrial development and foster green production and supply chains.”
The Kenya CCDR finds that a higher average annual GDP growth rate can buffer the impact of climate change on GDP, lowering the impact of climate on GDP (reducing it by 2.78–5.3%in 2050 compared to the baseline), but cannot eliminate the risks.
The CCDR outlines five key action areas for inclusive, climate resilient and low-carbon growth in Kenya:
1. Improving management of water, land, and forests to boost climate-resilient agriculture and rural economies;
2. Fostering people-centered resilience with climate informed basic services and urbanization;
3. Strengthening Kenya’s competitiveness in international markets through shifts in energy, transport, and digital systems;
4. Improving Integration and coordination of climate action in policy, planning, investments, and decision-making across the economy;
5. Implementing policy measures that mobilize climate financing from the private and public sectors.
Effective implementation of these multisector action areas requires a whole-of-economy approach to sustain climate action at scale. Strong coordination and prioritization of vulnerable areas and people will be imperative. It will require subnational government, national government, private sector, academia, non-governmental organizations, donors and communities to collaborate and innovate together.
“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 mobilizing investments in resilient and low-carbon infrastructure,” said World Bank Country Director, Keith Hansen.
Financing to increase Kenya’s resilience to climate change will require both domestic resources and expanding climate-compatible private investment in existing areas, such as livestock feed and tourism, and emerging sectors, such as e-mobility and green energy. Kenya is well positioned to accelerate private sector-led growth and expand and explore the use of climate financing options such as carbon markets and risk transfer instruments in the short-term and debt instruments, such as green bonds and sustainability linked bonds in the medium-term.
“Low-carbon and climate-resilient investments are key to Kenya’s inclusive and sustainable future. The private sector has an important role to play through deployment of capital in climate resilience and sustainable job creation,” said Amena Arif, IFC Country Manager for Kenya.
Kenya’s CCDR received input from key stakeholders including various government agencies. It was funded by Climate Support Facility – Whole of Economy Program (CSF-WOE), Global Program on Sustainability (GPS), Energy Sector Management Assistance Program (ESMAP), Global Water Security & Sanitation Partnership (GWSP), Japan-World Bank Program for Mainstreaming Disaster Risk Management in Developing Countries (GFDRR), and PROBLUE
About the CCDR:
The World Bank Group’s Country Climate and Development Reports (CCDRs) are new core diagnostic reports that integrate climate change and development considerations. They will help countries prioritize the most impactful actions that can reduce greenhouse gas (GHG) emissions and boost adaptation, while delivering on broader development goals. CCDRs build on data and rigorous research and identify main pathways to reduce GHG emissions and climate vulnerabilities, including the costs and challenges as well as benefits and opportunities from doing so. The reports suggest concrete, priority actions to support the low-carbon, resilient transition. As public documents, CCDRs aim to inform governments, citizens, the private sector and development partners and enable engagements with the development and climate agenda. CCDRs will feed into other core Bank Group diagnostics, country engagements and operations, and help attract funding and direct financing for high-impact climate action.
