A coal power plant sits at the river's edge at dusk. [Getty Images] Climate change is undeniably the world's biggest threat presenting multiple challenges, mainly to developing countries. While risks linked to the global rising temperatures continue, nations across the world are in a race to curb the rising temperatures. Although African countries are the least contributors of these greenhouse gas emissions, they remain the most affected, yet they have to be part of a journey in financing the economic transformation aimed at reducing the emissions while curbing destruction of nature. As countries race to meet the Paris Agreement targets that set goals to reduce global greenhouse gas emissions, most countries and big organisations are focusing on directly limiting and avoiding emissions from their activities. However, economists came up with the idea of trading to create a financial incentive to curb emissions. This led to rise of voluntary carbon markets, trading systems in which carbon credits are sold and bought. Voluntary carbon markets create platforms where carbon emitters seeking to offset their emissions, meet with carbon credit sellers to purchase carbon credits from projects reducing greenhouse gases from the atmosphere. Rosaline Mumbai, the Carbon project development lead officer at Nature Kenya, says carbon markets are part of a wider approach towards decarbonisation and transition where individuals or companies looking to offset their own greenhouse gas emissions. She says the companies can then put finances to projects that directly captures the carbon or those that reduces or avoid carbon emissions. Such initiatives often include reforestation projects, renewable energy and green technology, regenerative wetland management programmes, climate-smart agriculture programmes, among others. "Companies that emit a lot of carbon, most of those in developed countries are required to cut off their emissions to certain levels. However, there are levels they might not exceed, lest they close business. In such a scenario, they look for projects that offset or remove carbon and buy the carbon credits from them," Mumbai said. This, she says, means the projects selling these credits should be approved by standardisation bodies. The standardisation bodies verify and calculate the amount of carbon a project reduces from the atmosphere. This gives the project developer a green light to now sell those credits to the company. The project, should be already running and undergone certification to show how much carbon it is reducing and qualify for the trade. To get certification, the project owner pays some fees to standardisation bodies. While forestry projects like tree planting might take long to attract carbon accreditation as they take long to grow, the value of the credits, according to Mumbai are high. "Projects like mangroves, for example, are high-value because they offset carbon from the atmosphere, from the sea and from the soil," she said. But for a project to be certified, it must also undergo additionality test. This means it should not be a way of life or something one is obligated to do. Carbon projects also have expiry dates, and most operate in cycles. "Projects are time-bound, and most operate in cycles. Some can run to up to 15 years but are reviewed after every five years," she said. And while there are people and groups who are successfully earning from carbon offsets, Mumbai said awareness is still low, and communities are yet to fully tap on the potential markets. According to the 2022 Africa Carbon Market Initiative roadmap report, global companies are increasingly adding carbon credits that reflect avoidance of carbon emissions or removal of the emissions from the atmosphere as part of their efforts to reach net zero. And now, experts say that voluntary carbon markets represent a major opportunity to accelerate economic development and simultaneously curb greenhouse gas emissions. Recently, a regional voluntary carbon market was held in Nairobi. Full Speech: President William Ruto launches African Carbon Markets initiative at COP27 It brought together buyers and sellers of carbon credits, in a market that rose to become the largest ever carbon market in the world in recent times. During the event, over 2.2 million tones were sold. Regional Voluntary Carbon Markets Company CEO Riham ElGizy said there was need to use every tool at our disposal to tackle impacts of climate change. "This auction demonstrates the role voluntary carbon markets can play in driving funding where it is most needed, to deliver climate action and improve livelihoods across the Global South,"Riham said. According to Riham, the auction offered high-quality credits that met international standards, which can enable buyers operating in a range of industries to play their part in the global transition. Ahmed Rushdy, director at the Regional Centre for Sustainable Finance, said the projects targeted should generate verified credits to avoid green washing. "Verification and validation of credits in global markets is very important. Reduction projects should be verified and validated under recognised validated standards," Rushdy said. Green washing, often happen when there is lack of transparency in verifying the amount of carbon the project offsets. Steps Kenya is taking to regulate its carbon trade. And now Kenya, through the Climate Change Amendment bill of 2023, is stepping in to develop and regulate carbon trade in the country. The new Climate Change Amendment 2023 reviews the 2016 Act to provide for communities to engage in and internationally transact on projects and initiatives that reduce and offsets offsets generated carbon. The new bill will provide guidelines and policy brief to guide the process, which are not entailed in the Climate Change Bill 2016. At the moment, there are no policies and institutional frameworks that guides carbon markets. The new bill now seeks to close the gap and allows for expansion of carbon trade markets. A report by the Kenya Private Sector Alliance shows that the country has a potential to reduce, or avoid ~30 metric tons of carbon dioxide per year. Between 2016 and 2021, Kenya issued ~26 MtCO2e of carbon offsets, more than any other African country and approximately 20 per cent of total African credits, according to KEPSA. The stakeholders say the approach is part of aligning with the goals of the Paris Agreement and being part of the climate change solution. "By 2016, scientists, through IPCC reports had warned that the approaches of talking and blaming each other were not yielding anything, yet impacts of climate change are becoming more adverse. Through such approaches like regulating carbon markets, communities will benefit," Agustine Kenduiwo, the deputy director, Climate Change Mitigation said. The new Bill proposes that carbon trading projects would undergo an environmental and social impacts assessment in accordance with the Environmental Management and Coordination Act.