What do all these climate words mean?

Carbon financing refers to the financial mechanisms and market-based approaches aimed at supporting projects that reduce greenhouse gas emissions and promote sustainable development. It operates through two primary structures: carbon credits and carbon offset projects.

Carbon credits are tradable units that represent a reduction or removal of one metric ton of carbon dioxide equivalent emissions. These credits are generated when projects successfully reduce emissions below a defined baseline.

They can be bought and sold on carbon markets, allowing businesses and organisations to offset their emissions by purchasing credits from projects that have reduced emissions.

Carbon offset projects involve investing in emission reduction initiatives to compensate for unavoidable emissions elsewhere. These projects can include renewable energy projects, afforestation efforts, energy efficiency improvements, or methane capture initiatives.

By supporting these projects, individuals and businesses can balance their carbon footprint and contribute to global emission reductions.

In Kenya, carbon financing presents opportunities for individuals, businesses, and project developers. It provides a means to access additional funding for sustainable projects, stimulates clean and green investments, and helps address climate change challenges.

Participating in carbon financing can have multiple benefits, including potential financial returns, improved livelihood due to adaption of cleaner technologies, enhanced sustainability practices, and positive environmental impact.

Understanding the basics of carbon financing and exploring opportunities for project development or investment can contribute to Kenya’s sustainable development goals and align with global climate action efforts.

Edward Mungai is a sustainability expert