Carbon credits may top agenda as UN climate forum begins

Deal between Blue Carbon and Kenya is being treated as big news in the United Arab Emirates. [iStockphoto]Caption Kenya's move to cede millions of acres of land to Blue Carbon, a young Dubai firm, for creation of carbon credits just days to the highly awaited Cop 28 is a clear demonstration of how the controversial emission offsetting programme will feature as one of the biggest agendas at the summit. "The FOC (Framework of Collaboration) was signed with the State Department of Environment and Climate Change and underlined Blue Carbon's commitment to explore and support Kenya's Article 6 readiness as per the Paris Agreement, whereby carbon credits are generated in the form of Internationally Transferable Mitigation Outcomes (ITMOs) and aligned with national climate targets," said Lesia Buinoza, a spokesman for Blue Carbon. Although the Kenyan government is yet to make the deal public, FOC agreement between Blue Carbon and the Kenya's Ministry of Environment is being treated as big news by major news networks in the United Arab Emirates (UAE). The contract is set to be announced as one of the deals that will be made in Dubai by the host nation for Cop 28. Similar contracts Blue Carbon has been ramping up similar contracts across Africa taking up tens of millions of acres of carbon sinks that it will use to trade to other gulf countries. Apart from Kenya whose total acreage under the deal is still unknown, countries that have already signed deals with Blue Carbon include Zimbabwe (18 million acres), Liberia (2.5 million acres), Zambia (20 million acres) and Tanzania (20 million acres). Various conservationists have termed this as the new scramble for Africa being led by Sheikh Ahmed Dalmook Al Maktoum, a senior member of the Ruling Royal Family of Dubai and the patron of Blue Carbon. "There is a scramble for Africa's Forest carbon," Saskia Ozinga, co-founder of Fern, a European environmental justice NGO told the Yale School of Environment about the controversial nature of deals being signed by African government with companies such as Blue Carbon. "But these deals risk defrauding the countries, the forest communities, and the climate, and appear to be negotiated by African governments who don't understand carbon markets or are personally benefitting from the deals." Carbon offsets Carbon credits, also known as carbon offsets, are permits that allow polluters to emit a certain amount of carbon dioxide or other greenhouse gases. One credit permits the emission of one ton of carbon dioxide or the equivalent in other greenhouse gases. The carbon credit is half of a so-called cap-and-trade programme. Companies that pollute are awarded credits that allow them to continue to pollute up to a certain limit, which is reduced periodically. The companies buying the credits are also allowed to sell unneeded credits to those that need them. While the whole concept looks very complicated, the long and short of it is that carbon credit markets offer a mechanism for developed nations and businesses to counterbalance their carbon emissions by investing in eco-friendly projects elsewhere. Each carbon credit or offset symbolises the removal of one metric ton of carbon dioxide from the Earth's atmosphere through a scientific concept known as carbon sequestration. This the net rate at which carbon is removed from the atmosphere. It is measured as a time-dependent carbon flux, which is the difference between gross carbon removals and emissions. And although this concept has been there for decades, it was only known among climate activists during the Kyoto Protocol of 1997, when for the first-time international participation in carbon markets was recognised. Then at Cop 21 in Paris, France, the voluntary exchange of carbon credits was officially recognised as one of the ways of managing global warming. "Through this mechanism, a company in one country can reduce emissions in that country and have those reductions credited so that it can sell them to another company in another country. That second company may use them for complying with its own emission reduction obligations or to help it meet net-zero," says Article Six of the Paris agreement. In the years that have followed Cop 21 in 2015, there has been a mad rush across the world by the big polluters to accumulate as many carbon credits as they can. According to the World Bank, the global carbon credit market is valued at around $909 billion. The United Nations Environmental Programme (UNEP) estimates that "23 percent of global emissions is now covered by some form of carbon pricing. The value of traded carbon dioxide permits soared by 164 percent since Cop 27." The global carbon market however remains "chaotic and volatile." The price can range from less than $10 per ton of CO2 equivalent to more than $100 per ton of CO2. "Changing climate goals and policies, economic hardship and uncertainty fuelled by crises like the Covid-19 pandemic and the war in Ukraine, rising oil and gas prices, and growing speculation in the carbon market, all fuel volatility," says UNEP. But despite this volatility, the carbon market at $909 billion is still one of the biggest industries in the world and it is going to get bigger as more companies like Netflix, Nike, Apple hop sign up to trade emissions from their factories. Yet, amidst all this growth, Africa with its immense potential to reap billions of dollars annually from the global carbon credit market is still lagging behind. African forests, which are predominantly in equatorial countries, are currently huge carbon sinks. On balance, these forests remove about 1.1 Gigatonnes of Carbon Dioxide from the atmosphere annually. Carbon sink A recent study published in the Nature Journal said: "Intact tropical mountain forests in Africa store about 150 tonnes of carbon per hectare, over 1.5 times more than they were originally thought to absorb. A single hectare of those rainforests, which is about the size of two and a half football fields, absorbs the equivalent of emissions from powering 100 homes with electricity for a year." In total, Africa's carbon sinks have the ability of absorbing 20 percent of annual European carbon emissions or 75 percent of African carbon emissions. Yet, efforts to monetise these natural carbon absorption systems are still at a very nascent stage on the African continent. Since the Paris Agreement, only 11 percent of carbon credits issued worldwide between 2016 and 2021 came from projects in Africa. There is a silver lining though. A number of countries in Africa like Kenya, Tanzania, Zambia and Zimbabwe have in recent years come up with regulations on how to tap into the global carbon credit market while ensuring that their communities where the projects are located will benefit. At Cop 27, during the launch of the Africa Carbon Markets Initiative (ACMI) in Egypt last year, Kenya's President William Ruto said that Carbon Credits have a potential for becoming Africa's biggest export by the year 2030. "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, we will align incentives among polluting producers and sequestration enterprises to achieve net zero industrialisation and shared green prosperity," said Ruto at Cop 27. Africa Summit This carbon credit agenda which has been criticised as being dominated by Western interests featured heavily at the recently held Africa Climate Summit which was hosted by Kenya in September. One of the biggest deals from the summit was a pledge by investors from the United Arab Emirates (UAE) to buy $450 million of carbon credits from the Africa Carbon Markets Initiative (ACMI), which was launched at Egypt's COP 27 summit last year. The Nairobi Declaration, signed by 19 African heads of state at the summit, has however been criticised by activists as "an attempt to rewrite the narrative of African climate objectives, focusing less on the areas of disagreement (fossil fuels), and far more on the opportunities for Africa and the (global) financing architecture that is needed for a successful African climate action." More than 500 civil society groups argued that African leaders have in essence allowed foreign corporations to continue to pollute, while bringing limited benefits in terms of African development. The risk "While monetising Africa's natural climate sinks is a legitimate option for a continent where capital is already hard to come by, the risk is that an overreliance on carbon credits, in the absence of more ambitious action to phase out fossil fuels, may further deepen the long-term climate risk African countries are exposed to," said the Centre of Africa-Europe relations. "Instead of dealing with pollution from companies and countries, the Nairobi Declaration means that polluters can continue with their emissions as long as they pay some meager amount of money to Global South countries," said Omar Elmawi, a Kenyan environmental activist. But despite the opposition by think tanks and activists against the concentration on carbon credits by African leaders at the expense of dealing with the effects of climate change, it appears that the agenda for Cop 28 by the continent has already been set. -Achuka writes for ClimaNews, a climate communication project of Steward Africa Limited.

Carbon credits may top agenda as UN climate forum begins

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Carbon credits may top agenda as UN climate forum begins

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