Reducing GHG emissions is becoming urgent as countries around the world experience the intensifying impacts of climate change. The pace of decarbonization and adaptation needs to be accelerated and carbon markets provide an option to offset the costs of moving away from fossil fuels and towards a green economic transition.
At COP27, African countries launched the Africa Carbon Markets Initiative (ACMI) to produce 300 million carbon credits annually. This initiative seeks to unlock billions in revenue and create employment opportunities by 2030. Under ACMI, a roadmap report was released- Harnessing carbon markets for Africa, identifying 13 action programs to support the growth of voluntary carbon markets on the continent. Multiple nations including Kenya, Malawi, Gabon, Nigeria and Togo shared their commitment to collaborating with ACMI to scale carbon credit production via the voluntary carbon market activation plans.
Having the potential to bring significant environmental and economic benefits to Africa, the carbon credits market is rapidly gaining momentum. By encouraging African businesses to adopt cleaner technologies and reduce their carbon footprint, carbon credits can lead to a cleaner and healthier environment, reduced air pollution and mitigating climate change effects such as reduced extreme weather events and sea-level rise.
Africa is at the cusp of an opportunity to develop the voluntary carbon market that will boost climate action as well as enable value creation and foster sustainable livelihoods for communities. In Kenya, citizens residing in the Gazi and Makongeni areas of the south coast are part of the Mikoko Pamoja- “mangroves together” which is a development initiative that conserves 117 hectares of state-owned mangroves, representing almost 16 percent of the ecosystem in the Gazi Bay. The carbon benefits from protecting and planting mangroves are substantial because they retain carbon in their biomass and lock it in the marine mud. As a result of these efforts, Mikoko Pamoja is one of the first-ever blue carbon initiative in the world that sold carbon credits to international corporations as a monetary incentive for community development. From funding pumps to provide clean drinking water for several primary school children to building schools and hospitals.
Carbon markets present a great opportunity for African countries to utilize their abundant natural resources to unlock economic value and accelerate sustainable industrialization, economic transformation and diversification. Gabon has been an active participant, going on record in 2021, as the first African country to receive funding from the Central African Forest Initiative for curbing deforestation. In 2022, the Gabonese Strategic Investment Fund (FGIS) joined the Net-Zero Asset Owner alliance, an initiative that commits to transitioning several investment portfolios to carbon neutrality. The FGIS is committed to financing Gabon’s zero-emission activities by 2050 with the objective of setting new strategies every five years and reporting annually on their progress.
Recognizing the essential need to embrace sustainable practices and combat climate change, the government of Mozambique has made the activation of carbon markets a priority. By engaging in these markets, Mozambique proactively contributes to reducing GHG emissions, promoting renewable energy solutions and attracting investments that align with environmental goals. Leveraging on the extensive expertise and experience in designing and implementing carbon market initiatives from competent practitioners, Mozambique is poised to embark on a transformative journey towards building a low-carbon economy. Furthermore, they will support the identification of carbon offset projects across various sectors. A detailed activation plan will enable the Mozambique government to work closely in developing a robust policy and regulatory framework that aligns with the international best practices. Hence, providing clear guidelines for market participants, ensuring accountability and adherence to environmental standards.
Several African countries are looking into joining the carbon market. To harness the opportunities the carbon market provides, there is a need to create a regulatory framework and a national registry. This will not only promote transparency and environmental integrity, but also add value to the quality of carbon credits, therefore, increasing carbon investments across the continent. Governments should aim to make deliverables that will include the potential of carbon stocks from selected sectors, reviews of policy, institutional and legal policy frameworks, centralised accounting and reporting platforms, an operational online carbon registry, and training models of stakeholders in the market.
Africans have the potential to play a unique and globally significant role in the prevention and mitigation of emissions, protection of crucial ecosystems and the restoration of carbon sinks. The urgent actualization of these interventions offers humanity its best chance of prevailing in the existential contest with climate-change induced catastrophe. The good news is that we have a golden opportunity to rapidly achieve these objectives. By developing a robust, transparent and sustainable mechanism through which a carbon credits market can yield attractive income and development opportunities for communities at the frontlines in the fight against climate change.
