The Africa Confidential Blog
Will carbon trading help Africa's revenue woes?
The launch of the African Carbon Markets Initiative (ACMI) following last November's UN COP27 summit in Egypt was a major milestone towards making climate finance available and expanding clean energy across the continent. Governments are now setting out their own plans to tap the carbon credits market.
Zimbabwe's environment and climate minister Mangaliso Ndlovu announced that all carbon projects in the country would be required to register with the authorities and that the government will take 50% of all revenue from projects, with foreign investors limited to 30% and the balance of 20% going to local communities.
The government in Harare is not acting alone. Last week, Tanzania signed its own agreement on Africa's largest carbon offset project. Kenyan President William Ruto has said that the EU could use more African carbon credits in its existing emission trading markets. Ruto's government intends to pass legislation to regulate the generation of carbon credits in June.
It makes sense for African states to play leading roles in this transition. The EU has now passed into law its Carbon Border Adjustment Mechanism (CBAM), which will hurt African exports unless the continent prioritises major carbon emissions cuts. Other jurisdictions are likely to follow suit, and those who are first to market will get to set the global rules.