Kenya bets on carbon credits as it hosts African climate summit

Cash-strapped African nations want a much bigger share of a $2-billion market that is forecast to grow five-fold by 2030.

Africa only produces 11 percent of the world’s offsets yet boasts the planet’s second-largest rainforest and tracts of carbon-absorbing ecosystems like mangroves and peatlands.

Kenyan President William Ruto, who is hosting a climate summit in Nairobi this week, said Africa’s carbon sinks were an “unparalleled economic goldmine”.

“They have the potential to absorb millions of tons of CO2 annually, which should translate into billions of dollars,” he said on Monday.

A single credit represents one tonne of carbon dioxide removed or reduced from the atmosphere. Companies buy credits generated through activities like renewable energy, planting trees or protecting forests.

Carbon markets are largely unregulated and accusations that some offsets — particularly forest-based ones — do little for the environment or exploit communities have sent prices crashing this year.

Kenya already generates the most offsets in Africa and despite market uncertainty, sees the potential for a much bigger domestic industry capable of creating much-needed jobs and economic growth.

In Kasigau, about 330 kilometres (205 miles) southeast of Nairobi, landowners and communities are paid to keep the forest intact under a flagship carbon credit project run by Wildlife Works, a for-profit business and largest offset developer in Africa.

Wildlife Works founder Mike Korchinsky said at least half of revenue went to communities.

The forests protected under the scheme were once cleared for firewood and charcoal, degrading a carbon sink and critical wildlife habitat.

Avoiding deforestation serves climate goals by keeping carbon in the soil and trees instead of allowing them to be released into the atmosphere. The Kasigau Corridor REDD+ Project was the world’s first to generate certified credits this way.

Wildlife Works says the project has been independently verified nine times since 2011, and has avoided roughly 22 million tonnes of CO2 emissions.

Kenya emits about 70 million tonnes of CO2 per year, according to Climate Watch, a platform managed by the World Resources Institute that tracks national greenhouse gas emissions.

The UN-endorsed African Carbon Market Initiative, launched at COP27 in November, believes 300 million credits could be generated annually on the continent by 2030 — a 19-fold increase on current volumes.

For Kenya, this would mean more than 600,000 jobs and $600 million in annual revenue.

But these projections assume a carbon price far above current trades, and a massive increase in finance at a time of great volatility in a market struggling to build trust and integrity.

Ahead of the Africa Climate Summit in Nairobi, more than 500 civil society organisations wrote to Ruto urging him to steer the conference away from carbon markets and other “false solutions… led by Western interests”.

Ruto’s appointee to lead the summit, Joseph Nganga, said carbon markets acted “not as an excuse for emissions but as a means to ensure accountability” as rich polluting nations bore the cost.

Countries are moving to regulate the sector. Earlier this year, Zimbabwe announced it would appropriate half of all the revenue generated from carbon credits on its land, sending jitters through markets.

Kenya is finalising its own legislation. Mohamed said the government did not want to “chase away investors” but ensure transparency and a fair share for communities.

Korchinsky expressed confidence the Kasigau project “will hold up to whatever scrutiny is applied”.

Tags: African Clime Summit, Carbon Credits, Kenya