Kampala, Uganda – August 27, 2025
A new study spanning a decade has revealed that the prices currently offered for carbon credits and other climate finance instruments are too low to meaningfully reduce greenhouse gas emissions in developing countries.

The findings were presented by Canadian scholar Prof. Mark Purdon during a seminar at Makerere University, where he launched his new book “The Political Economy of Climate Finance Effectiveness in Developing Countries: Carbon Markets, Climate Funds, and the State.” The event, hosted by the Environment for Development (EfD) Mak Centre, attracted graduate students and academic staff from the Schools of Economics and Agricultural Sciences.

Prof. Purdon, an Associate Professor at Université du Québec à Montréal (UQAM), based his conclusions on a comparative study conducted between 2008 and 2018 in Uganda, Tanzania, and Moldova. His research showed that while carbon markets and climate funds are theoretically designed to reduce emissions, their real-world effectiveness is constrained by the low financial incentives attached.

“Carbon prices during the period I studied were simply too low to drive meaningful emission reductions,” said Prof. Purdon. “They only worked in contexts where governments were already trying to push development initiatives-like Uganda’s forestry projects and the climate finance just helped amplify that effort.”

The research contrasts Uganda’s relatively proactive approach with Tanzania’s limited engagement, attributing the difference not to institutional capacity but to political will.

“In Tanzania, the government just wasn’t genuinely interested in these instruments -they didn’t find the financial incentives compelling. Uganda, on the other hand, saw even the modest funding as worth integrating into its broader development goals,” he added.

Interestingly, Moldova also showed effectiveness similar to Uganda, despite having different levels of state capacity. Prof. Purdon emphasized that success in utilizing climate finance depends more on political interest than institutional strength alone.

The seminar highlighted the importance of domestic commitment in making international climate finance work. According to Purdon, climate finance is unlikely to succeed in countries lacking political interest, regardless of the mechanisms in place.

The professor’s book aims to inform policymakers, development agencies, and researchers about the conditions under which climate finance can effectively contribute to emission reduction. He expressed hope that students and faculty at Makerere University would further engage with the study’s findings.

“This is how ideas turn into action – through forums like this,” he said, noting his appreciation for the strong turnout and engagement at the event.

Prof. Purdon was in Uganda to attend the International Growth Center (IGC) conference later in the week, but used the opportunity to share his latest work with the Makerere academic community.

Uganda to Launch National Climate Finance Strategy as Experts Call for Private Sector Investment in Adaptation

Uganda is set to launch its first-ever National Climate Finance Strategy on September 12, 2025, a milestone development in the country’s climate policy architecture, according to remarks made by Dr. Peter Babyenda, Policy Engagement Specialist at the EfD-Mak Centre.

Speaking on behalf of Prof. Edward Bbaale, Director of EfD-Mak Centre, Dr. Babyenda emphasized that climate finance will only be effective if private sector participation is prioritized especially in adaptation-focused investments.

“The private sector will only invest where there’s a return. We must ask how to make climate investments profitable,” Dr. Babyenda said. “Much of our climate financing currently goes toward mitigation, but Uganda’s needs are more aligned with adaptation especially in agriculture, which remains highly vulnerable.”

He cited his recent consultancy with the International Fund for Agricultural Development (IFAD), which explored strategies for increasing private sector investment in agricultural adaptation. The findings, expected to be published soon, were presented to various donor communities and could shape future financing models in Uganda.

Dr. Babyenda noted that while mitigation efforts like tree planting are easier to quantify and attract funding, adaptation remains underfunded despite its critical relevance for Uganda. He called for targeted strategies to shift this imbalance.

Highlighting the significance of Prof. Purdon’s new book, “The Political Economy of Climate Finance Effectiveness in Developing Countries”, Dr. Babyenda stressed the importance of understanding political will in determining the success of climate initiatives.

“The experiences from Uganda, Moldova, and Tanzania outlined in the book show that effectiveness is possible where there is political interest. It is not just about institutional capacity it is about commitment,” he said.

He further revealed that Uganda’s Ministry of Finance, Planning and Economic Development has already established a Climate Finance Unit, which is now leading efforts to formalize the upcoming strategy.

In addition to national developments, Dr. Babyenda warned of growing international pressure. He pointed to upcoming European Union regulations, including the Cross-Border Adjustment Mechanism (CBAM), which could restrict exports such as coffee unless exporters prove their products are deforestation-free.

“If we don’t have systems like carbon taxes or certified credits, our goods will face fines or lose market access. We must prepare for this global shift,” he warned.

Dr. Babyenda also announced that Makerere and IGC would sign a Memorandum of Understanding, solidifying their continued partnership in climate economics research and policy development.

He closed by encouraging students to engage with the issues raised during the seminar, suggesting they could form the basis of graduate research or postdoctoral work, especially with available funding in climate-related fields.

“Monies are there and these are the issues. Our roads, our crops, our lives are being affected. We need solutions rooted in evidence and action,” he said.

Book Offers Critical Insights for Evidence-Based Policy, Says Reviewer Dr. Byakagaba

Dr. Patrick Byakagaba, a leading Ugandan environmental policy expert and one of the reviewers of the launched book, praised the publication for shedding light on the political economy factors that determine the success or failure of climate finance instruments in developing countries.

Dr. Byakagaba described the work as a timely and evidence-based resource that should inform both policy and practice.

“In my opinion, this book helps us understand the political economy factors that are critical for the effectiveness of the different climate financing instruments,” Dr. Byakagaba said. “It shows what is working, what is not, and what we must do to leverage successful measures.”

He emphasized the book’s relevance not only for academics but also for practitioners and students in economics, environmental science, and natural resource management – many of whom are directly involved in projects funded by international climate finance.

Unlike many theoretical publications, Dr. Byakagaba noted that the book stands out for its field-based evidence drawn from Uganda, Tanzania, and Moldova – countries with shared democratic governance structures but differing levels of engagement in climate finance initiatives.

“This isn’t just theoretical work,” he said. “It gives us a strong theoretical foundation but also backs it up with real-world evidence. That’s exactly what we’ve been missing – research that informs policy in a tangible, practical way.”

He stressed the importance of building on this research to expand the body of evidence needed for crafting effective and locally relevant climate finance strategies.

“If we are going to adopt evidence-based policy instruments, we must continue investing in research that reveals what’s actually working on the ground,” Dr. Byakagaba urged.

The seminar highlighted the growing need to critically evaluate and adapt international climate finance mechanisms to local political and economic realities – a message echoed by both Prof. Purdon and other experts at the event.

Book summary

There is ample evidence that engaging developing countries on climate change mitigation would have significant, positive impacts on global climate efforts. There is much debate, however, on the most effective strategy for unlocking these low cost mitigation opportunities. While the Clean Development Mechanism (CDM) emerged as the main climate finance instrument for engaging developing countries under the Kyoto Protocol, the carbon market approach it embodied would largely be replaced by a new array of climate finance instruments based on climate funds.

In The Political Economy of Climate Finance Effectiveness in Developing Countries, Mark Purdon shows that the effectiveness of climate finance instruments to reduce emissions under either strategy has depended on the interaction between prevailing ideas about how to develop a nation’s economy, as well as state interests in various economic sectors.

Based on multiple field visits over a decade in three countries, the author demonstrates that climate finance instruments have been more effectively implemented when the state treats them as vehicles for addressing priority development issues. Climate finance instruments were more consistently and effectively implemented in Uganda and Moldova than Tanzania, despite differences in state capacity between countries. This pattern held for the CDM,as well as subsequent instruments largely based on climate funds such as Reducing Emissions from Deforestation and Forest Degradation (REDD+) and other national mitigation actions. Contributing to broader debates on international climate cooperation, Purdon’s findings inform international efforts to support national climate plans and catalyze low-carbon development by emphasizing the importance of domestic politics and the state.

The Political Economy of Climate Finance Effectiveness in Developing Countries:  Carbon Markets, Climate Funds, and the State

By Mark Purdon

Oxford University Press 2024

Purchase Online: https://global.oup.com/academic/product/the-political-economy-of-climate-finance-effectiveness-in-developing-countries-9780197756836

Jane Anyango is the Communication Officer EfD Uganda.

Over 40 Ugandan government officials have been called to integrate communities into biodiversity conservation following a two-day high-level training (August 20–21, 2025) at Makerere University.

Organized by EfD Uganda, the workshop focused on biodiversity conservation, community-based natural resource management, and economic valuation of national parks. Led by renowned environmental economist Prof. Edwin Muchapondwa, the training emphasized aligning conservation efforts with community involvement for lasting impact.

“Communities must be seen not just as beneficiaries but as co-managers of biodiversity,” said Prof. Muchapondwa. “Policy frameworks need to devolve rights to local people to increase their stake in conservation outcomes.”

Participants from ministries and agencies explored Uganda’s biodiversity challenges—including habitat loss, agricultural expansion, poaching, and climate change. Sessions covered conservation principles, legal frameworks, ecosystem valuation, and regulatory tools to integrate biodiversity into national planning.

Valuing Nature to Shape Policy

A central theme was the economic valuation of ecosystems—putting monetary value on biodiversity to inform policy and investment decisions.

“When we reduce everything to a common metric, we can make objective, evidence-based decisions—especially when weighing development against conservation,” Prof. Muchapondwa said.

Officials practiced applying valuation methods like contingent valuation and payment for ecosystem services in real-world policy settings, including environmental impact assessments and Uganda’s National Development Plan III.

Despite strong conservation policies on paper, implementation remains weak. “The issue isn’t policy absence but execution,” he noted. “We must adapt successful community-based models from Southern Africa to Uganda’s context.”

Tourism and Development: A Delicate Balance– Prof. Edward Bbaale

Speaking at the opening, Prof. Edward Bbaale, Director of the EfD–Mak Centre, emphasized collaboration between academia and government to support tourism development and sustainable resource use.

He praised Prof. Muchapondwa as a “pillar of the Environment for Development network” and highlighted the urgent need for research that connects tourism, conservation, and economics.

“We’ve had little research from Makerere on tourism and natural resource valuation,” Bbaale said. “Yet this is exactly where government seeks advice.”

Bbaale underscored Uganda’s ambition to grow GDP tenfold—from $50 billion to $500 billion—through sectors like tourism, agro-industrialization, and manufacturing, urging researchers to support this growth with evidence-based insights.

“Makerere houses the highest concentration of PhDs in this country,” he said. “If this research isn’t happening here, where else should it happen?”

The event concluded with a renewed call for stronger partnerships among academia, government, and communities to ensure conservation and development go hand-in-hand.

Public Sector Must Rethink Economic Policy Through Biodiversity Lens– Dr. Peter Babyenda

Uganda risks jeopardizing its natural wealth if it continues to undervalue its ecological resources, warned Dr. Peter Babyenda, Research Fellow and Policy Engagement Specialist at EfD–Mak Centre.

“Our forests, wetlands, and ecosystems are routinely excluded from GDP calculations due to limited technical capacity and funding,” he said. “Kenya has made progress—Uganda must catch up.”

To bridge the gap, EfD–Mak Centre, with support from SIDA, has launched a training program for technical staff from ministries and agencies like the Ministry of Tourism, Uganda Wildlife Authority, and NEMA.

“These are the people who draft policy,” Dr. Babyenda said. “We’re training them to use data and evidence, not emotion, when defending policies.”

He cited recent transport policy missteps—such as a speed enforcement proposal that failed due to lack of public engagement—as an example of why community participation is essential.

“Especially with human-wildlife conflicts, you must involve locals,” he said. “Solutions like electric fencing must be safe and community-driven.”

Conservation vs. Economic Growth

Uganda’s ambitious goal to grow its economy from $50 billion to $550 billion by 2040 presents risks to biodiversity, particularly from agricultural expansion. Dr. Babyenda stressed the need to balance development with environmental preservation.

“We must promote agriculture without destroying forests and wetlands,” he said. “Our tourism sector, which depends heavily on biodiversity, must also be protected.”

He urged officials to present conservation as an economic asset. “If you show that every additional dollar invested in tourism marketing creates jobs and boosts GDP, people will listen.”

Aligning with Uganda’s National Development Plan IV, Dr. Babyenda called for cross-sector policy coherence.

“Tourism, agro-industry, and mineral development must be guided by sound, evidence-based policy,” he concluded. “Otherwise, we risk losing it all.”

Participants Reflections from the Training

Adson Tumwebaze – National Environment Management Authority (NEMA)
As someone working in the Research and Innovations Unit at NEMA, this training was a timely eye-opener. We’ve gained valuable insights into how economic valuation can be integrated into our research and planning frameworks. Understanding the tangible benefits ecosystems provide—and knowing how to quantify those benefits—equips us with the tools to make informed decisions when balancing development and conservation.

For us at NEMA, this goes beyond theory. It supports our mandate of protecting ecosystems and helps us align our work with national policies such as the National Biodiversity Action Plan and BISAP. One of my key takeaways is that you cannot talk about implementing a project on an ecosystem without understanding its value. Once we can economically define these benefits, we can also justify conservation measures, influence policy, and guide budgeting processes more effectively.

Alice Nalweera – Economic Policy Researcher
This training brought clarity to a challenge many of us are grappling with: the growing threats to biodiversity in the face of urbanization, climate change, and population pressure. As we pursue economic development and strive for goals like those outlined in the 2040 export-oriented strategy, we must ask: Can biodiversity and development coexist?

Tourism is one of Uganda’s biggest earners, and it’s entirely dependent on biodiversity—the parks, wildlife, flora, and fauna. Without protecting these resources, our economic aspirations could collapse. What struck me most is the urgent need for accurate data. We can’t conserve what we haven’t identified or valued. Accounting for our natural resources is not optional—it’s essential.

Arthur Ebong – National Planning Authority
From the national planning perspective, this training helped bridge a crucial gap between policy and implementation. While NDP III and NDP IV highlight biodiversity mainstreaming, they often lack depth in practical conservation measures. We used to insert the term “biodiversity” into plans, but lacked the tools to truly value and integrate it.

Learning about valuation methods like hedonic pricing and travel cost analysis opened new avenues for making biodiversity count—literally—in our national plans. And beyond the technical tools, this session also promoted inter-agency collaboration. With stakeholders like NEMA, UWA, and the Ministry of Water in the same room, we can now work more cohesively toward a shared goal.

The training has also inspired curriculum reviews. If we want future planners and policymakers to value biodiversity, we must train them early—through revised academic programs and capacity-building initiatives. This is not just about today’s policies, but the long-term socio-economic transformation of Uganda.

Gertrude Kirabo – Uganda Wildlife Authority (UWA)
At UWA, we face the challenge of balancing conservation with increasing economic pressure around protected areas. This training has been invaluable in helping us understand how to defend conservation efforts using data-driven economic valuation.

Previously, arguments for protecting a forest or wetland often sounded emotional or abstract. Now, we can present facts—cost-benefit analyses that compare the long-term value of ecosystem services with short-term economic gains. This also supports practical decisions like adjusting park permit fees or advocating for higher conservation budgets.

Personally, this training served as a wake-up call. It made me realize how often we’ve given away resources without truly valuing them. I strongly recommend that more field officers and institutional planners go through this kind of training. It’s one thing to learn these concepts in school, and another to see their real-world application. It’s time we started backing conservation with data and strong economic logic.

Jane Anyango is the Communication Officer EfD Uganda.

_{By Ritah Namisango and Monica Meeme}

On 19^th August 2025, the College of Business and Management Sciences (CoBAMS) at Makerere University, hosted a public presentation titled “Africa’s Growth Trends and Prospects in Light of Evolving Global Challenges.”

Dr. Paul Mpuga, a visiting Scholar and Division Manager for Microeconomic Policy, Debt Sustainability, and Forecasting in the Economic Governance and Knowledge Management Vice-Presidency of the African Development Bank Group, delivered the presentation, which attracted both physical and virtual participants, comprising researchers, teaching staff, graduate, and undergraduate students.

The presentation covered critical topics including: Regional differences in growth performance and outlook, Inflation in Africa, Opportunities and Challenges to growth, emerging risks, and key policy recommendations.

The presentation provided valuable insights into the current economic challenges and opportunities facing Africa. His analysis highlighted the importance of sound policies, economic integration, and investment in key sectors such as education, infrastructure, and green growth. The discussion emphasized the need for collaboration among governments, the private sector, and academia to drive sustainable development and inclusive growth across the continent.

Welcoming the participants, Associate Professor Faisal Buyinza, the Acting Dean of the School of Economics, emphasized that Dr. Mpuga’s work is significant not only for his academic contributions, but also for his role as a mentor, having taught and influenced many of the current faculty members.

“His impressive career journey, which began at the World Bank’s Kampala office and later took him to Ethiopia and other countries, reflects his deep expertise in key economic roles across the continent,” said Associate Professor Buyinza. He disclosed that Dr. Mpuga’s extensive experience has significantly contributed to the development of macroeconomic design and policy skills, an asset particularly crucial as Uganda navigates current economic challenges.

In addition to his professional achievements, the Acting Dean of the School of Economics commended the humanitarian spirit of Dr. Mpuga, recalling how he used to share meals with street children in Uganda, reflecting his compassion and values beyond academia.

In his address, the College Principal, Prof. Edward Bbaale welcomed Prof. Mpuga back to Makerere University. “Dr. Mpuga is a former Lecturer. Today, he returns to the School of Economics, his academic home, to share with us, his versatile knowledge, experience and expertise on a topic crucial for Africa’s transformation,” said the Principal. He commended Dr. Mpuga’s decision to deliver the presentation, highlighting that such academic engagements are vital and should become a regular part of the College’s culture.

Reiterating the role of knowledge sharing and mentorship within the academic community, the Principal shared his personal testimony, acknowledging Dr. Mpuga’s pivotal role in his own academic journey. He recounted how Dr. Mpuga mentored him early in his career by including his name on a research project—an opportunity that opened doors to numerous collaborations, professional growth, and academic advancement.

The Principal called upon the staff and students present to embrace a culture of regular academic public presentations, such as lunch-hour sessions across the School of Economics, School of Business, and the School of Statistics and Planning. He noted the close connections between the disciplines, highlighting the potential for cross-disciplinary learning and collaboration.  The Principal emphasized that as Makerere University implements its research agenda, sustained academic engagement is a key defining aspect of this identity.

Prof. Bbaale affirmed the College’s support for such initiatives, including modest research grants that have already enabled the publication of around 70 research papers, soon to be compiled under the CoBAMS Working Paper Series.

Expressing the commitment to this strategic approach, the College Principal used the opportunity to introduce Dr. Peter Babyenda, a Lecturer at the School of Economics, who was appointed as the College’s Policy Engagement Coordinator to support academic activities.  Prof. Bbaale assured all in attendance of the maximum support for this initiative and encouraged active participation from everyone.

Beginning his presentation, Dr. Paul Mpuga, Division Manager at the African Development Bank, offered a comprehensive overview of Africa’s economic realities, challenges, and opportunities. He emphasized that economic progress is not driven by sentiment, but by certainty, sound policies, and strategic investment.

Using a simple analogy, Dr. Mpuga explained that a baker doesn’t bake bread unless they are sure it will sell. In the same way, investors and entrepreneurs, will only take risks in economies where policy certainty and confidence are assured. He underscored the urgent need for policy coherence and economic stability, both globally and within African nations.

Reiterating the importance of Domestic Revenue Mobilization, Dr. Mpuga noted that Africa’s average tax-to-GDP ratio stands at just 17%—significantly lower than the 25–28% seen in more advanced economies such as South Africa and Botswana. These countries are able to finance up to 90% of their expenditures through domestic revenues, a target that many others on the continent still struggle to achieve.

He underscored the urgent need for reforms in tax systems and public finance management to reduce the over-reliance on external borrowing. “Africa requires an estimated $150–$170 billion annually for infrastructure development, yet currently mobilizes only about $80 billion, leaving a funding gap of $70–$100 billion,” he stated.

Dr. Mpuga emphasized that infrastructure such as roads, energy, water systems, and transport is not a luxury, but a necessity for connecting production to markets and driving sustainable development.

He stated that youth unemployment remains alarmingly high, with 30–40% of African youth (aged 15–34) unemployed in some countries. “Many young people are not in education, employment, or training, leading to wasted talent and increasing social risks,” he highlighted. He emphasized the need for greater investment in skills development and education, noting that sustainable economic transformation depends on a well-equipped and empowered workforce.

Dr. Mpuga pointed out that economic integration and managed migration are strategies that can boost GDP growth, enhance policy stability, and reduce export concentration.

He noted that, despite being one of the regions most affected by climate change, Africa has made limited progress in green growth investments. “The continent is rich in natural resources, yet underutilized in terms of climate-smart development,” he stated.

He indicated a major opportunity gap, when he disclosed that the global green economy is valued at an estimated $3 trillion, but Africa’s private sector participation stands at only 14%.

He advocated for greater private sector involvement, the adoption of green infrastructure practices, and natural capital accounting to help African countries value, protect, and benefit from their resources.

For Africa to realise inclusive growth, Dr. Mpuga highlighted the following practical policy recommendations:

• Improving fiscal transparency and efficiency
• Strengthening tax administration using digital tools
• Aligning monetary and fiscal policy, especially around inflation targeting
• Building foreign reserves to cushion against shocks
• Ensuring debt is used for productive investments such as energy and infrastructure
• Accelerating structural reforms and economic diversification
• Promoting integrated infrastructure planning (for instance roads with energy and ICT links)
• Investing in value addition and agro-processing to uplift rural economies

Using a humorous reference to Uganda’s famous grasshopper delicacies, Dr. Mpuga illustrated the need for economic transformation, saying, “We need to move beyond traditional activities and create value chains that can package and export even local foods globally. We shouldn’t be running to donors every day when we sit on so much wealth,” he noted. “Let us value what we have, manage it well, and build a prosperous, united, and green Africa.”

Responding to the questions, Dr. Mpuga emphasized the importance of formalizing economies, strengthening trade links, and building public confidence through sound policy frameworks such as inflation targeting and social contracts. He cautioned against excessive reliance on Artificial Intelligence in academic and professional settings. “AI can be useful for checking work or assisting with calculations, but it cannot replace human thought, creativity, or critical reasoning,” he advised.

Dr. Mpuga mentioned the need for better monitoring and maintenance systems, such as ensuring broken streetlights are tracked and fixed, drawing attention to practical governance concerns that affect everyday life.

 Monica Meeme contributed to this story as a Guest Writer