CIO East Africa (Nairobi)

Kenya: Mobile Money Transfer Solutions Can Reduce Effects of Climate Change

Photo: Andrew Vlad/COP18
A session at the United Nations COP18 summit in Doha, Qatar.

The December 2012 Boston Consulting Group (BCG) report titled SMARTer2020, revealed that ICT can cut global greenhouse gas emissions by 16.5%, saving up to $1.9 trillion USD annually.

The potential reduction is more than 16% higher than the estimated saving in a study conducted in 2008. The research identified Ericsson's mobile money as a potential ICT-enabled solution for emission reduction.

The potential reduction is more than 16% higher than the estimated saving in a study conducted in 2008. The research identified Ericsson's mobile money as a potential ICT-enabled solution for emission reduction.

The report indicated that large amounts of emissions are generated as a result of unnecessary travel to access banking services in Africa. This includes emissions from the use of private and public transportation and, in the long run, additional road infrastructure, more public vehicles, and increased banking infrastructure requirements. Ericsson is taking the lead in providing millions with better access to banking services, which will significantly improve their standard of living and reduce banking-associated emissions.

Mobile money can also reduce travel needs within communities by allowing direct mobile bill payment. For instance, the electric company can charge consumers directly via their mobile devices, eliminating the need for the customer to travel to the company physically to pay the bill.

"Mobile network providers play an active role in fostering the adoption of mobile money to contribute to emission reduction. Network providers have proven to be more accessible than banks; they are in a better position to leverage mobile money as a way to positively impact the environment," said Mwambu Wanendeya, Ericsson Vice president and head of communications Africa.

In Kenya for example, there are 6.5 million subscribers who currently carry out 10 million banking transactions per day, with an average value of USD 20. The calculated environmental impact is 22 kg CO2 per subscriber per year.

If this level of mobile money penetration and emissions reductions in Kenya holds for the rest of the continent, mobile money would reach 161.3 million consumers and would yield 3.55 Metric tons in carbon dioxide emissions reductions in Africa alone.

ICT-driven solutions such as smart electricity grids reap benefits at the national level, whilst others like mobile money can result in energy - and cost - savings for individual households and businesses.

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