The tug-of-war over the private sector – time to stop?

 In Uncategorized

Over the past few weeks, and as I mentioned in a previous blog post, I’ve been continuing to help the DFID team in Ethiopia design an exciting new programme focused on supporting new small and medium enterprises and entrepreneurs, including green businesses. So I’ve been surprised to hear that the private sector has started to become a “do-or-die” issue for the agreement of a new Green Fund in the ongoing climate negotiations in Durban. This fund has been in design by a 40-member committee – including a senior UK representative – for just under a year to date. Its “operationalisation” (or, in plain English, its “birth”) has been cited as a key outcome for the Durban negotiations.

But how could the private sector possibly become a do-or-die issue?

In the climate negotiations, the conventional view on the role of the private sector often plays out as a tug-of-war:  it’s as if there is a pot of public finance in the middle, with a team of developed countries on one side pulling hard to recognise the role of the private sector in financing climate change action in developing countries, and a team of developing countries on the other side pulling hard not to recognise it – in the belief that by doing so they might extricate more public funds from developed countries.

Is the tug-of-war on private sector finance helping development? Credit: Joshwept, April 2011

It’s more complex than this of course (this Brookings article provides a lot more detail) but the major problem with this tug-of-war scenario is that it detracts negotiators from the key question of how the fund will deliver impacts and results.  Let me explain why.

First, as I’ve seen in Ethiopia, the private sector is not one entity. It can mean an entrepreneur, a small or medium enterprise or business, a project developer, a multinational company, a philanthropist, or an institutional investor such as a pension fund or a sovereign wealth fund. It’s a phrase that spans the full scale of one poor individual to the owners of trillions of pounds of assets.  Yet negotiators on both sides of the tug-of-war tend to focus on a specific sub-set of the private sector. This is because they tend to be focused on who contributes to the fund. They focus on institutional investors, and occasionally philanthropists and multinational companies, many of whom are based in developed countries. There is, actually, good reason to. These investors or companies do have the potential to effect change on a great scale. It is their decisions, their shareholders and boards that have the power to determine whether new investment in renewable energy will outrun investment in fossil-fuel energy. For the first time in history, according to a new report by Bloomberg New Energy Finance, this very scenario has occurred this year. It’s a great start.

But investors are not the only private sector actors that can effect change. In fact, UN research published in 2007, which suggested that 83% of climate finance flows are dependent on the private sector, in fact covered the full set of private sector actors I listed earlier. In the end, it is people on the ground everywhere that will have to act on climate change – by being energy and resource efficient in their homes, workplaces or industries, paying a bus fare rather than driving to get to the market, or investing in fertiliser to grow and sell a new crop to adapt to the impacts of climate change. Neither governments nor investors – particularly in the poorest and most fragile countries where both governance and investment is weak – can deliver action on climate change alone.

So is it right to have a tug-of-war over the private sector? My view is that the game needs to get more sophisticated. By focusing on the one sub-set of the private sector, and contributions to the fund, negotiators are not talking enough about what the fund does – what kinds of projects it finances, what kinds of financial structures work best to stimulate the growth of new green businesses, to stimulate energy efficiency, drive higher investment in renewable energy, or other green and climate-resilient activities, technologies and infrastructure.

What matters fundamentally is that the Green Fund is not designed to shut down the option for governments, investors or philanthropists across the globe to directly contribute finance to it. The more finance the better, for everyone. But more crucially, the Green Fund also needs to be designed to allow action on climate change to take place through individuals, small businesses, large companies as well as investors. The more actors that can obtain finance from the fund, the more nimble the fund will be in disbursing what’s needed to make real change on the ground.

So in the next few days as the Durban negotiations proceed, and beyond, I’m hoping that negotiators will drop the conventional tug-of-war by focusing less on the private sector’s role, and focusing more on what the fund will do. That’s got to be the priority for the poorest and most fragile countries.


This blog post also appeared on the RTCC (Responding to Climate Change) and DECC (the Department of Energy and Climate Change) websites.

Recent Posts

Leave a Comment

Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

验证码不清楚,请更换一张 captcha txt

EDMOND BOSILONG

Research Analyst

Edmond is a research analyst who is passionate about sustainable development, innovation, and the environment. Passionate about climate financing, he firmly believe there is a more reliable system to promote equality, growth, and welfare in societies without affecting the ecosystem. Through his skills, knowledge and experienced gained over 7 years, he wants to make an impact in the world of development. Edmond holds a Master’s Degree in Public Policy from Korea Development Institute and a BA Degree (Honors) in Business from University of Derby.

   HANNAH RYDER

    Founder and CEO

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE's International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.

LEAH LYNCH

Deputy Director

Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.

YIKE FU

China-Africa Policy Analyst

Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.

JUDITH MWAI

Research Analyst

Judith is a Research and Policy Analyst, where she specialises in Africa-China relations, international development, and diplomacy. During her time at Development Reimagined, Judith has co-authored several articles published in The Diplomat on debt and China-Barbados relations and was quoted by China Daily in a piece on Women Rights in China. Previously, Judith worked as a research analyst for an Advocate and Commissioner and Oats office in Kenya.

OVIGWE EGUEGU

Policy Analyst

Ovigwe specialises in geopolitics with particular reference to Africa in a changing Global Order. He is adept at critically analysing the politics of contemporary development processes and providing insight into the geopolitical interests that influence them. His work includes research, publications, tailored briefings and advising on global and regional trends, and issues at the nexus of geopolitics and development. Ovigwe appears frequently in media around the world such as Al Jazeera, TRT World, SABC, CGTN, BBC Radio, and other platforms.

JING CAI

Policy Analyst

Jing leads China-African health and agriculture cooperation research at Development Reimagined, having managed our FOCAC Policy Analysis and Advocacy project. She is also the co-author of “China-Africa Health Cooperation under FOCAC Umbrella”, in which she analysed China’s commitments around health cooperation since the first FOCAC summit and deepdived into four African countries’ health overview, challenges and cooperation with China as cases studies. Before DR, Jing worked at GIZ Cambodia on M&E of a disability advocacy project. She also worked as a translator with Chinese medical team in Benin.

PATRICK ANAM

Trade Policy Analyst

Patrick is an International Trade Policy and Trade Law Expert with over 5 years of experience. His expertise includes trade law, trade policy analysis and regional integration. He is currently engaged with Development Reimagined as a Senior Trade Analyst and was the lead author of Development Reimagined's recent Report on Africa-China Relations titled "From China-Africa to Africa- China: A Blue Print for a Green and Inclusive Continent-Wide Strategy Towards China." and “Reimaging FOCAC Going Forward.” Patrick has previously consulted for the East African Community, UNECA and for the Kenya Ministry of Trade.

ROSIE FLOWERS

Senior Policy Analyst 

Rosemary is our Senior Policy Analyst. She is a skilled policy analyst and has previously worked as a UK civil servant. She is studying Human Rights at Birkbeck, University of London with a research focus on international law in the context of health crises such as the COVID-19 pandemic.

JADE SCARFE

Project Manager and Africa-China Communication Assistant

Jade is a Project Manager for Development Reimagined’s flagship project Africa Unconstrained, which focuses on financing needs and debt vulnerabilities of African countries. Her research focuses on China-Africa development finance alongside debt vulnerabilities, infrastructure needs and South-South cooperation. She has worked with a breadth of stakeholders from China, Africa and the wider international community, including governments, private sector, NGOs and civil society. Her writing has appeared in a number of publications, including The Africa Report, The China-Africa Project, The Diplomat and more. Jade holds a Master’s in China and Globalisation studies from King’s College London.

ROSIE WIGMORE

Programme Manager

Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.

Rosie is also alumni of the School of International Studies at Peking University in Beijing where she is also an editor at the Peking Africa Think Tank. PATT is led by a diverse group of scholars who specialise in African Studies within the context of Sino-Africa relations.

LAUREN ASHMORE

Consultant

Lauren has lived in six countries from the Americas to Europe and Asia and speaks both French and Spanish proficiently. At Development Reimagined, Lauren’s research focuses on climate action both in the Asia-Pacific and in Africa, and how countries are using tools such as SDGs and Covid-19 action to build a more climate-resilient future. She holds a Masters in International Relations from Leiden University.

ETSEHIWOT KEBRET

Consultant

Etsehiwot holds a Masters’s degree in Development Studies from the London School of Economics. She has diverse experience in humanitarian and development issues by working in both multilateral organizations and international non-governmental organizations. Etsehiwot is currently a consultant focusing on the SDGs and development finance.

DIBEKULU MULU

Economist Consultant

Dibekulu is an economist by training. He holds an MSc in International Development Studies from Palacky University Olomouc, an MSc in Development Economics from the University of Clermont Auvergne, and an MSc in Economics, Finance, and International Integration from the University of Pavia. At Development Reimagined, he works as an Economist consultant. He has strong data analysis skills, with research interests centring around development finance, impact assessment, food security, and agricultural insurance.

OSARU OMOSIGHO

Project Manager

Osaru is a health professional with an MSc in Health Systems Policy and an interest in women’s health and population management. At Development Reimagined, she applies her health sector experience to global health research and collating locally applicable development insights from China.

PIER FERDINANDO CINOTTO

Research Analyst

Ferdinando’s research at Development Reimagined is centred on South-South Cooperation dynamics, specifically on the analysis of Chinese investment and debt flows in Africa and their linkages to African industrialisation. He is currently a Yenching Scholar at Peking University, after having graduated from the University of Cambridge with an MPhil in Development Studies.

DAVID TINASHE NYAGWETA

Research Analyst

David is a Research and data analyst at Development Reimagined. His scholarly focus is mostly on interdisciplinary research in demographic economics and development with interests in migration, economic development and policy, education, health and subjective well-being. He is currently a PhD scholar at Nelson Mandela University from which he also holds B.com Economics and Statistics and M.com respectively.

IVORY KAIRO

Research Analyst Kenya

Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team at DR. Ivory speaks English, Swahili and French.

JOY ENE

Research And Data Analyst China 

Joy Ene is a Research and Data Analyst at DR. Joy is passionate about African/global development, poverty eradication and trade policies between underdeveloped and developing countries. She is also a fourth-year student of International Economics and Trade at the  Liaoning University, Shenyang, China. She serves as the President of the Student Union, Liaoning University, International Students chapter.

CHENSI LI

Research Analyst 

Chensi Li is a research analyst. She has previously worked for local NGOs in Nigeria and Cameroon and think-tanks in China.  Her research areas include Sino-African relations, African foreign affairs, public diplomacy, state-building and national governance.

Yixin Yu

Research Analyst 

Yixin is a Junior Research Analyst and her focus areas is on public-private partnership and entrepreneurship. She has over three years of working experience in both private and public sectors in Ethiopia. She was the China Liaison Officer for project ‘Partnership for Investment and Growth in Africa’ at International Trade Centre, where she accumulated rich experience in investment and trade promotion

HANNAH RYDER

Founder and CEO

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE's International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.