Green economy could add $45 billion to Kenya GDP, says UN

A joint study by the UN Environment Programme and the Government of Kenya forecasts that Kenya could boost its economy by as much as $45 billion by 2030 if it transitions to an inclusive, low emission and resource efficient green economy.

The Green Economy Assessment Report: Kenya finds that with an investment of just 2% GDP on proposed green measures, Kenya’s normalized GDP could grow in excess of 12% within two decades, generating greater food security, a cleaner and greener environment, and higher productivity of natural resources.

Under this scenario, per-capital national income would surge from $498.70 to $871.30 compared to the alternative, business-as-usual approach that would yield an increase in income of just $664.30.

Greenhouse gas emissions could fall by as much as 9% by 2030 under the proposed green economy scenario, while Kenya’s average agricultural yield would increase by 15% from its current baseline. As a result, agriculture exports – currently one of Kenya’s key economic tenets – would drive more than one-third of the country’s GDP, up from one-quarter currently.

Furthermore, an adoption of a green economy strategy would reduce energy consumption by approximately 2%, finds the report, with renewable energy derived largely from solar PV helping to expand and widen the supply of electricity throughout the country. Early estimates suggest that solar, wind and other renewable energy sources could account for 20% of all power generated by 2030.

Making it a reality

Kenyan authorities have already implemented a raft of policies and initiatives intended to better nurture a transition to a green economy. Kenya’s snappily titled Second Medium Term Plan lays out the government’s goals, while the report from the UN urges the government to adopt targeted clean energy solutions for homes, companies and institutions, while investing heavily in solar, wind, geothermal and biofuel energies.

Manufacturing in Kenya – which at 10% GDP is one of the largest in sub-Saharan Africa – can play a key part in this transition, states the report. If the government can incentivize industries to invest in resource-efficient processes and clean energy through the introduction of public policies designed to promote renewable energy, then the impact could be transformative.

Equally, with Kenya’s transport network set to triple between now and 2030, a concerted effort to lower emissions (through upgrading to more modern vehicles) could also prove positively impactful, finds the report.

In January, the Kenya renewable Energy Association revealed that solar PV alone could power half of Kenya by 2016, with the Kenyan government identifying nine viable sites for its proposed $1.2 billion investment in solar energy. Construction on the first of these plants is imminent, and investment from private companies has been sought to help meet the costs.

Progress on the solar front in Kenya has been relatively slow but steady, with the impact of 2012’s FIT introduction and net metering regulations still to be fully realized. However, government support is fully behind a concerted solar PV program, with experts expecting the current cumulative installed figure of 20 MW to double by the end of the year, and to hit annual installation rates of 65 MW per annum by 2020.