Afghanistan is a country with a unique opportunity to benefit from SCP policy support. Country officials have expressed that they are in need of developing current policies for integrating SCP into national governance. This could be possible through national policy support during this crucial time of sustainable development in the country and through potential national UNEP projects in collaboration with other agencies. The country is at a crossroads poised to update its policy framework for environment and sustainable development, which provides a timely opportunity to mainstream SCP in sectoral policies within mining and resources extraction for example, among other potential priority areas for the country.

As a member of various Multilateral Environmental Agreements, Afghanistan supports the integration of Sustainable Consumption and Production (SCP) concepts and Sustainable Industrial Policies (SIP) in its 2017 agenda and related work. At present, the Ministry of Economy of the Islamic Republic of Afghanistan has been working towards achieving the Sustainable Development Goals and has identified SCP as a major issue.  Afghanistan will likely produce a SCP/SIP Action Plan in the coming year. This Action Plan will include a series of proposals on sustainable consumption and production that will contribute to improving the environmental performance of products and increase the demand for more sustainable goods and production technologies. There are a range of policies at the national level that already foster the production of resource efficient and eco-friendly products and raise consumer awareness. The new proposals would complement these policy instruments and provide measures where gaps exist. 

Main Resource Consumption and Resource Efficiency Indicators (2010)

Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)

• SWITCH-Asia RPSC SCP Policy Needs Assessment, 2011.

• UNEP Initiative to Help Communities Adapt to Effects of Climate Change  

SMEs make up about 80% of Afghan businesses, half the country’s GDP, and employ more than 30% of the labour force. The majority of SMEs – 70-80% are informal, located in rural areas, and are not registered with authorities.^[1] Afghanistan is one of the world’s poorest nations and there is much development work being done on establishing stable and effective administrative structures after the country’s reform efforts. Most people are engaged in agriculture.

_{[1] Mashal, M. (2014). Small and Medium Enterprises Development and Regional Trade in Afghanistan. Afghanistan Research and Evaluation Unit. Retrieved from http://www.ecoi.net/file_upload/1226_1395224417_1401e-20small-20and-20medium-20enterprises.pdf}

Green financing for SMEs is not yet developed in Afghanistan, which is still in economic recovery from years of conflict. There is a large need for business development services to expand SMEs, boost their productivity and increase employment. Most commercial banks in Afghanistan view SMEs as costly and high risk for lending, so they tend to finance larger local or multinational corporations.^[1]

SME Directorate was formed within the Ministry of Commerce and Industry in 2011, to “create globally competitive SMEs by creating a hassle free business environment, ensuring provision of modern infrastructure & institutional support structures for access to resources & services. The Government shall take measures for promotion of women entrepreneurship, cluster development and also focus on neglected/untapped sectors of the economy.”^[2]

The Afghan government has developed an SME strategy, which aims to create an enabling environment for SME development across provinces and regions in Afghanistan: the strategy focuses on building capacities in priority sectors, identifying ways to tackle challenges, formalizing enterprises and enhancing job-creation (unemployment is at around 40%).”^[3]

SME priority sectors are: 

• Agri-processing
• Carpet weaving
• Marble quarrying
• Gemstones mining
• Livestock products
• Timber and carpentry

More technical and financial support is needed to support SME development through training and skills building. There needs to be cooperation with regional and international partners to create SME funds and financial products in banks, or to invest in innovation programs. The private sector should continue to promote access to finance through strengthening micro financing institutions, and capacity building in financial literacy and management should be provided to artisans and entrepreneurs.

_{[1] Afghan Growth Finance. (2014). Seaf.com. Retrieved from http://seaf.com/what-we-do/our-locations-investment-vehicles/asia/afghan-growth-finance/} 

_{[2] Ministry of Commerce and Industry Strategic Action Plan 2011- 2015. Retrieved 24 April 2017, from http://moci.gov.af/Content/files/MOCI%20Strategic%20Plan%20FINAL%2029%20Oct%202011%20ENG.pdf}

_{[3] SMALL TO MEDIUM ENTERPRISE PAPERS. (2010). Fourth Regional Economic Cooperation Conference on Afghanistan. Retrieved from http://moci.gov.af/en/page/6024}

• Limited access to credit
• Weak relevant legal and regulatory framework
• Lack of industrial-level energy
• Corruption
• Limited product diversity and access to markets
• Lack of capacity in business planning and marketing

• World Bank
• USAID
• Small Enterprise Assistant Funds (SEAF)
• Afghan Growth Finance (AGF) Overseas Private Investment Corporation (OPIC)
• Afghan International Bank
• First MicroFinanceBank Afghanistan (FMFB-A)

Aga Khan Agency for Microfinance

• Largest provider of financial services for micro and small businesses, and households. SMEs comprise 18% of the lending portfolio, with around EUR 11 million for SMEs.

The First MicroFinanceBank Afghanistan (FMFB-A)

SME Term loan:

Loan amount: 5,000 dollars / AFA 350,000 - 250,000 dollars / AFA 17,000,000
Term: 6 months to 60 months
Loan renewal is based on feasibility of project.

Small business loan:

Loan amount: 200 dollars / AFA 14,000 - 10,000 dollars / AFA 700,000Term:  Minimum 6 months, maximum 12 Months for working capital and 24 months for purchasing assets

Installments: Monthly
Interest Rate (Declining): 27%
Interest Rate (Flat): 15%
Fee: 1 % of disbursed amount

Microfinance Investment Support Facility for Afghanistan: established a Small and Medium Enterprise (SME) Program in 2006, partnering with banks and local financial institutions to provide training on SME lending, helping underserved SMEs obtain loans. 

OXUS Afghanistan

Offers four product types: collateral-free group loan product, small personal loan product, individual loan product and small and medium enterprise loan product. Since inception and as of march 2015, OXUS Afghanistan has disbursed 107,828 loans worth EUR 70 million. At present most of OXUS Afghanistan clients are small traders or shopkeepers (88%), while others produce handicrafts (8%) or work in the agricultural sector (4%). In the meantime, over 29% of OXUS’ clients in Afghanistan are women and 56% are rural clients.

Afghan Credit Guarantee Foundation (ACGF)

A charitable foundation based in Cologne, Germany, that provides finance for SMEs by providing credit guarantees and technical assistance to Partner Institutions.

2015 total territorial GHG emissions^[1]* (excluding land use change and forestry): 23 MtCO₂

2015 territorial GHG emissions per capita: 0.7 tCO₂/person

_{[1] CO2 Emissions | Global Carbon Atlas. (2016). Globalcarbonatlas.org. Retrieved from http://www.globalcarbonatlas.org/en/CO2-emissions}

_{*GHG territorial emissions are Carbon dioxide emissions from the use of coal, oil and gas (combustion and industrial processes), the process of gas flaring and the manufacture of cement.}

2016 GDP: EUR 15.57 billion^[1]

GDP composition by sector:^[2]

Agriculture: 24%
Industry: 21%
Services: 55%

*Note: Data exclude opium production

Agricultural products: opium, wheat, fruits, nuts; wool, mutton, sheepskins, lambskins, poppies

Industry sub-sectors: small-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper

_{[1] The World Factbook — Central Intelligence Agency. (2017). Cia.gov. Retrieved 1 August 2017, from https://www.cia.gov/library/publications/the-world-factbook/geos/af.html}

_{[2] The World Factbook — Central Intelligence Agency. (2017). Cia.gov. Retrieved 1 August 2017, from https://www.cia.gov/library/publications/the-world-factbook/geos/af.html}

Energy and industrial emissions are less than 15% of Afghanistan’s GHG emissions,, since Afghanistan has a comparatively low level of energy and industrial development. The agriculture sector contributes more than half to total GHG emissions in Afghanistan.[1]

_{[1] Thomas, V. (2016). Climate Change in Afghanistan: Perspectives and Opportunities, Heinrich Böll Stiftung - Afghanistan, Kabul. Retrieved from https://af.boell.org/2016/06/20/climate-change-afghanistan-perspectives-and-opportunities}

National policies

• National Adaptation Programme of Action for Climate Change (NAPA) 2009
• Afghanistan National Renewable Energy Policy (ANREP) 2013
• National Water and Natural Resource Management Priority Programme
• Strategic National Action Plan for Disaster Risk Reduction (SNAP) 2011
• National Environment Strategy 2012/13
• National Environmental Action Plan (NEAP)
• National Biodiversity Strategy and Action Plan (NBSAP)

International policies

• UNFCCC ratified in 2002
• The Kyoto Protocol ratified in 2013
• Paris Agreement ratified in 2017

Afghanistan’s INDC^[1]* to the UNFCCC:

Base Year: 2005

Target Years: 2020 to 2030

Target: There will be a 13.6% reduction in GHG emissions by 2030 compared to a business as usual (BAU) 2030 scenario, conditional on external support (more than 30% increase between 2020-2030 is predicted) 

_{*INDCs - Intended Nationally Determined Contributions. Unfccc.int. 2017. Retrieved from http://unfccc.int/focus/indc_portal/items/8766.php}

_{[1] ISLAMIC REPUBLIC OF AFGHANISTAN Intended Nationally Determined Contribution 2015. Retrieved from http://www4.unfccc.int/submissions/INDC/Published %20Documents/Afghanistan/1/INDC_AFG_Paper_En_20150927_.docx%20FINAL.pdf}

1. Some short-term climate adaptation goals were included in the National Adaptation Programme of Action for Climate Change, and development of a National Adaptation Plan (NAP) is underway.  Afghanistan’s INDC states that implementation of the NAP is conditional upon support from the international community - an estimated EUR 10.10 billion investment in financial, technological and capacity over 10 years to implement the National Adaptation Plan.

2. Afghanistan Resilience Consortium (ARC) was created by ActionAid, Afghanaid, Concern Worldwide, Save the Children, and UNEP in 2014.

3. Climate Change Adaptation Project (CCAP):[1] 2014 – 2019

Donors: Global Environmental Facility - Least Development Country Fund
Implementing Partner: Ministry of Agriculture, Irrigation and Livestock
Other Key Partner: Ministry of Rural Rehabilitation and Development, Ministry of Energy and Water and National Environmental Protection Agency

National Adaptation Plan Priorities: 

[1] UNDP. (2016). Climate Change Adaptation. UNDP in Afghanistan. Retrieved from http://www.af.undp.org/content/afghanistan/en/home/operations/projects/environment_and_energy/ClimateChange.html

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Afghanistan has a population of 33.4 million. It is highly vulnerable to climate change impacts and natural disasters or extreme weather events. These vulnerabilities are compounded by previous years of conflict, and exploitation and degradation of natural resources in the past 40 years. 12 million people (36%) live below the poverty line and 85% of the total population is directly or indirectly involved in agriculture.^[1] Drought and lack of water resources are the largest climate change threats in Afghanistan, with flooding being the second largest.

There is a general lack of climate data, but the Intergovernmental Panel on Climate Change’s 2014 synthesis report^[2] shows that Afghanistan is part of a region that has the second-highest rate of rising temperatures and is expected to have a net loss of annual precipitation. From 1998 to 2006 Afghanistan experienced one of its longest and most severe droughts. It has been predicted that by 2030 droughts will be the norm.^[3] 

Main climate change impacts include: 

• Heat waves
• Droughts
• Floods
• Landslides
• Earthquakes
• Sandstorms
• Excess snowmelt (causing floods)
• Glacial lake outflows
• Desertification and land degradation
• Biodiversity loss
• Human health issues
• Conflict and governance

_{[1] USAID. (2016). Climate Change Risk in Afghanistan: Country Factsheet. Retrieved from https://www.climatelinks.org/sites/default/files/asset/document/2016%20CRM%20Fact%20Sheet%20-%20Afghanistan_2.pdf}

_{[2] IPCC, 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151 pp. Retrieved from https://www.ipcc.ch/report/ar5/syr/}

_{[3] Ruttig, T., & Satke, R. (2015). Before the Paris Conference: The state of Afghanistan’s climate and its adaption capability | Afghanistan Analysts Network. Retrieved from https://www.afghanistan-analysts.org/before-the-paris-conference-the-state-of-afghanistans-climate-and-its-adaption-capability/} 

Agriculture, farming and livestock: 

• This is the most vulnerable sector to climate change. Agriculture makes up 30 to 50% of total GDP.
• 15 million people (45%) rely on farming and livestock for their livelihoods and the sector is a source of income for over 60% of all households (and the primary source of income for 28% of households).^[1]
• About 45% of the land is used for rough grazing, and cattle are important for milk production.^[2]
• Increase in temperatures will lead to reduced soil moisture
• Drought and dry conditions will cause crop reduction
• Changes in rainfall patterns will affect production of fodder
• Industries reliant on agriculture will suffer from decrease in exports and financial losses.

Ecosystem services:

• Increased desertification
• Reduced soil and water quality
• High mountain biodiversity more at risk

Water Resources:

• Reliance on snowmelt – mountain snow provides 80% of water used[3]
• Glaciers will melt, increasing risks of flash floods
• Drought will reduce water supply

Health: 

• Food insecurity and malnutrition risks
• Increased temperatures
• Increased spread of vector and water borne illnesses, such as malaria and cholera

Conflict and governance: 

• Displacement from lack of resources
• Competition for use of rangelands
• Increased poppy production (opium) contributing to the global opium trade for heroin production 

Energy:

• Hydropower provides 79% of total electricity, although only 43% of the population (14.3 million out of 33.4 million) has access to electricity.^[4]
• Hydropower generation needs enough water to support energy needs
• Flashfloods and storms can damage energy infrastructure; hydropower is especially sensitive to climatic impacts on water.
• SME development requires industrial energy and water.^[5]
• A 2013 survey by the Afghan Chamber of Commerce and Industries showed that 80% of surveyed business owners listed lack of electricity as a main challenge to business growth.^[6]

_{[1] World Food Programme (2016). Afghanistan - Climate Change: What Does it Mean for Rural Livelihoods and Food Security?. Retrieved from https://www.wfp.org/content/climate-change-afghanistan-what-does-it-mean-rural-livelihoods-and-food-security}

_{[2] USAID. (2016). Climate Risk Profile: Afghanistan | Global Climate Change. Retrieved from https://www.climatelinks.org/resources/climate-change-risk-profile-afghanistan}

_{[3]  USAID. (2016). Climate Risk Profile: Afghanistan | Global Climate Change. Retrieved from https://www.climatelinks.org/resources/climate-change-risk-profile-afghanistan}

_{[4] Ibid}

_{[5] Azimi, A. (2007). Environment Assessment for ADB’s Program in Afghanistan. Asian Development Bank. Retrieved from https://www.adb.org/sites/default/files/institutional-document/32177/environment-assessment.pdf}

_{[6] Mashal, M. (2014). Small and Medium Enterprises Development and Regional Trade in Afghanistan. Afghanistan Research and Evaluation Unit. Retrieved from http://www.ecoi.net/file_upload/1226_1395224417_1401e-20small-20and-20medium-20enterprises.pdf}

Status: 2017. Inclusive of grants and loans; not an exhaustible list.