Economic Costs of Climate Change and Climate Finance with a Focus on Africa

Climate change is one of the most important challenges facing the world in general and Africa in particular. This article examines economic costs of climate change and climate finance with a focus on Africa. First, it discusses major estimates of the economic costs of climate change as well as adaptation costs and mitigation costs. It then discusses climate finance and how it relates to estimates of costs of adaptation and mitigation. The article attempts a critical examination of different frameworks and methodologies applied and empirical issues in the estimation of economic costs of climate change. It also discusses issues of governance and allocation of climate finance. A review of studies shows that Africa is typically the region of the world most negatively affected by climate change. Recent estimates of adaptation costs for Africa are in the range of 20–30 billion US dollars per year over the next 15 years while current adaptation funding is much less. The article concludes by pointing out implications of results for policy and suggesting areas for further research.