Africa’s climate activists, however, criticised initiative, saying it will incentivise pollution, benefit fossil fuel companies
This story has been updated.
Africa can raise a substantial amount of the much-needed climate finance if the immense potential of its carbon credit market is fully exploited, according to delegates and experts speaking at the ongoing three-day Africa Climate Summit.
The Rockefeller Foundation Managing Director for Africa region William Asiko called for accelerating Africa’s carbon credit supply to amplify its delivery from the current measly 2 per cent of its potential to 40 per cent by 2030.
“Africa’s carbon markets can serve as a template for others across the Global South region and accelerate the transfer of financing from high-income countries to low and middle-income countries,” said Asiko.
The continent's climate activists, however, have criticised this endorsement of carbon markets as a climate change mitigation method.
The continent urgently needs climate finance for mitigation and adaptation to climate change to the tune of between $750 billion and $1.3 trillion per year by 2025, according to the African Group of Negotiators on Climate Change (AGN). The estimates were part of AGN’s presentation at last year’s Conference of Parties to the United Nations Framework Convention on Climate Change (COP27) in Sharm El Sheikh, Egypt.
Unfortunately, the aspirations have proven overly ambitious, with top environmental polluters in the Global North showing no interest in meeting such demands. The same was the case with the pledge made in 2009, where countries in the Global North were to provide $100 billion in climate finance per year by 2020.
Against this backdrop, some delegates and environmental experts, including Asiko, called upon countries in the Global South to embrace carbon credit markets and explore its full potential.
Asiko, however, regretted that despite concerted efforts and growth seen in the past five years, Africa is only producing way below its maximum annual technical potential.
“Rockefeller Foundation, Sustainable Energy for All and Global Alliance for People and Planet have created the African Carbon Market Initiative (ACMI) to help realize the potential of a voluntary carbon market for Africa,” he added.
ACMI’s mission is to drive a 20-fold increase in the production of verified African carbon credits, while ensuring their proceeds are transparently and equitably distributed. This enhancement aims for the trading of 300MT/year, thus capitalising on Africa’s great potential for nature-based solutions to the vagaries of climate change.
The initiative has attracted harsh criticism from Africa's environmental experts and non-state actors. Friends of the Earth Africa, a collective of sovereign organisations working with grassroots communities on environmental and rights-based struggles, said it will incentivise polluting sectors and impede measures to check emissions.
Panafrican Climate Justice Alliance, a consortium of more than 1,000 organisations from 51 African countries working on inclusive approaches to address climate change, had also said in a statement that they “reject false solutions and narratives that undermine African communities’ rights, interests and sovereignty, such as carbon markets”.
A report released on the sidelines of the Africa Climate Summit, 2023 also showed that ACMI will benefit fossil fuel companies and financial brokers.
“The ACMI growth target would allow big private companies to emit an additional 1.5-2.5 gigatonnes carbon dioxide equivalent (CO2e) per year by 2050,” the authors of the report noted.
Experts also fear that new hydro-power projects and tree plantations, which are used for buying carbon credits, can lead to land grabs and abuse of human rights, according to a news story in Down To Earth.
Hundreds of millions were pledged for African carbon credits at the summit, with the United Arab Emirates committing to buying $450 million of carbon credits from ACMI.
The pledge couldn’t have come at a better time, considering African leaders are advocating for market-based financing instruments like carbon credits, which allow notorious polluters to offset emissions through activities like investing in renewable energy projects and planting trees.
Furthermore, there was an emphasis on enlarging the potential demand for African credits, ensuring their visibility in global markets and promoting frameworks for intergovernmental trading mechanisms.
United States Special Presidential Envoy for Climate and Former Secretary of State, John Kerry added his voice to the calls, saying Africa needs carbon credit markets infrastructure more than ever.
“What is happening to our planet today, from floods and droughts to wildfires, are confrontations to humanity by humanity. We have reached a tipping point and must stop it. A thriving carbon market is needed in Africa as a tool to fight climate crisis,” he said.
While making a case for carbon credits and other market-based instruments to mobilise climate finance, President William Ruto asked Africans to stop holding themselves back with the victimhood mentality.
“We are not here to catalogue grievances and list problems. We are here to scrutinise ideas, assess perspectives so that we can unlock climate solutions,” said Ruto.
“Africa holds the key to decarbonising the global economy, be it industrialisation or manufacturing. Gross domestic products are about assets. Africa has carbon sinks that serve the world. But we get nothing for it; it’s nowhere in our balance sheet,” he added.
The summit is taking place just days after President Ruto signed into law the precedent-setting Climate Change (Amendment) Bill, 2023, creating a legal avenue for Kenya to unlock its potential in the global carbon credit market.
Experts see the law as a game-changer, as it contains 17 clauses, setting the stage for the regulation of carbon markets in Kenya and bolstering the country’s ability to mobilise resources globally.
The country will soon have a national carbon registry, which will set the stage for trading in carbon credits. The registry will also, among others, be mandated with maintaining registers of carbon credit projects and programmes implemented to reduce greenhouse gas emissions in Kenya.
“Clause 6 amends section 8 of the Climate Change Act to empower the Cabinet secretary to appoint the designated national authority for market mechanisms and any other mechanisms deriving from Article 6 of the Paris Agreement. The designated national authority appointed shall also maintain the national carbon registry established under new section 23G,” the National Assembly wrote in its brief to the President.
With the new law, Kenya joins countries such as South Africa, Vietnam, India and Indonesia in efforts to set up domestic carbon trading markets, which opens pathways for more financing towards combating climate change.
The new law also gives the Ministry of Environment and the Cabinet Secretary a leeway to enter into bilateral and multilateral agreements with other State Parties to trade carbon for emission reduction and removal from the atmosphere.
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