As carbon markets face mounting scrutiny, a new international coalition spearheaded by Kenya, the UK, and Singapore aims to restore integrity and trust, offering African economies a path to climate finance without the burden of debt.
In a landmark move announced at London Climate Action Week, Kenya has joined forces with the United Kingdom and Singapore to launch the Coalition to Grow Carbon Markets, a first-of-its-kind government-led initiative aimed at unlocking climate finance for developing economies through the credible use of high-integrity carbon credits.
Co-chaired by Amb. Ali Mohamed (Kenya’s Special Climate Envoy), Singapore’s Ravi Menon, and the UK’s Rachel Kyte, the coalition brings together countries from both the supply and demand sides of the carbon market. Founding members include France and Panama, while Peru has already endorsed the initiative. The coalition’s immediate goal is to establish shared principles for the voluntary use of carbon credits by businesses before COP30 in Brazil.
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The initiative represents a strategic pivot in how governments view voluntary carbon markets, not merely as emissions offset tools, but as financial engines for sustainable development. For Africa, where access to climate finance remains a significant hurdle, the coalition could open new pathways to private-sector investment in clean energy, nature-based solutions, and community-led climate initiatives.
While Africa contributes less than 4% to global emissions, it shoulders some of the most severe climate impacts. Yet the continent has struggled to attract sufficient climate finance, with multilateral funds often slow and restrictive, and public debt levels rising dangerously high.
Voluntary carbon markets offer an alternative. When designed with integrity, they direct private capital to projects that reduce or remove emissions, such as forest conservation, regenerative agriculture, or clean cooking programs—providing both environmental benefits and economic opportunities for local communities.
Kenya has emerged as a leader in this space. Its national carbon registry is among the first in Africa to integrate transparency safeguards and independent verification, giving buyers confidence in the integrity of credits. By co-chairing the coalition, Kenya is now helping to shape global standards that could unlock billions in climate finance, not just for itself, but for the region.
Despite their promise, carbon markets have been plagued by issues of credibility. Reports of over-crediting, opaque governance, and limited community benefits have made companies hesitant to invest. According to the Integrity Council for the Voluntary Carbon Market (ICVCM), only a fraction of current carbon credits meets “high integrity” standards.
This lack of trust has stunted market growth. In 2023, voluntary carbon credit demand fell by nearly 40% globally. For Africa, which depends on foreign buyers for its credits, the decline has put pressure on climate-linked revenue streams.
The Coalition to Grow Carbon Markets aims to reverse that trend by providing clear, government-backed principles for what counts as a high-quality credit and how it should be used in corporate decarbonization plans. These principles are expected to offer legal and reputational assurance to companies, making it safer and more rewarding to invest in African carbon projects.
With the right policies, the voluntary carbon market could grow into a $250 billion industry by 2050, according to coalition projections. Much of this investment is expected to flow into emerging markets and developing economies, particularly in Africa, where land availability, biodiversity, and growing interest in regenerative practices make it ripe for scalable mitigation projects.
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Countries like Rwanda and Nigeria are already drafting national carbon strategies, while South Africa and Gabon have begun developing domestic carbon credit standards. Kenya, meanwhile, is piloting public-private partnerships to channel carbon finance into conservation corridors and community-led ecosystem restoration.
But growth without integrity is not the goal. The coalition emphasizes that credits must be supplemental to corporate decarbonization efforts, not a substitute. Companies are expected to reduce their own emissions first before turning to offsets.
The Coalition is backed by a technical secretariat housed at the Voluntary Carbon Markets Integrity Initiative (VCMI), which has also developed guidance on how companies can responsibly use offsets. Major business groups like the International Chamber of Commerce and the World Business Council for Sustainable Development have also signed on, ensuring private sector voices inform the coalition’s work.
On the regulatory side, the coalition builds on momentum from COP29’s Article 6 framework, which encourages countries to trade emission reductions transparently. The ICVCM’s Core Carbon Principles, often described as the “gold standard” for voluntary carbon credits, will form the baseline for coalition-aligned projects.
The announcement could not come at a more critical time. The climate finance gap for developing countries is estimated at $1.3 trillion annually. With donor fatigue growing and debt sustainability at risk, unlocking voluntary private investment is increasingly seen as not just complementary, but essential.
For Africa, this coalition offers a new kind of deal, one that prioritizes quality over quantity, local benefit over tokenism, and private investment over public loans. Kenya’s role as co-chair places the continent at the heart of global climate finance reform. As shared principles are developed and more countries join the initiative, the coalition could help redefine Africa’s position as a critical architect of its own solutions.
