Carbon markets that benefit the West will not solve Africa’s climate crisis
Western interests dominated the Africa Climate Summit. Time for African nations to put themselves first
The Africa Climate Summit 2023 in Kenya last week united African leaders for a discussion on the climate crisis, with a specific focus on Africa and its policy stance ahead of COP28 in Dubai.
One would have expected African leaders to propose sovereign solutions to the challenges faced by their countries. These include recurrent hunger, flooding, drought, resource exploitation, water and soil pollution, and control of food systems by Western corporations.
But sadly, the discussions at the early September meeting in Nairobi, Kenya were dominated by Western interests – particularly regarding carbon markets, in which companies buy and sell carbon credits. These are like certificates allowing them to emit a set amount of pollution.
For example, imagine a big company wants to pollute a bit more than it is allowed but has used up all its existing carbon credits. The legal way to do this would be for the company to buy extra certificates from another company in the carbon market. In essence, carbon credits permit those who can afford it to continue polluting the environment, while shifting the offset burden onto those who cannot pay to pollute.
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Carbon markets have emerged as a Western-promoted tool to incentivise emissions reduction through afforestation and renewable energy projects. But their potential impact on Africa is a cause of concern, according to activists, campaigners and Indigenous peoples.
Consider this: the bulk of financial capital lies in the Western hemisphere. Countries that historically emitted lots of carbon into the atmosphere because of manufacturing have grown very wealthy. As a consequence, they have the money to buy carbon credits from countries that are not as wealthy.
What this means in the long term is that developed countries will continue to increase their level of industrialisation, while poorer ones continue to trade in sectors where they lack control of the market price.
Add to that a scenario in which African countries come to depend on carbon credits, creating a dependency akin to that on foreign aid and stifling the agency to find home-grown solutions.
In fact, if they rely on carbon credits, African countries would forfeit the opportunity to grow their manufacturing capacity and accelerate economic innovation.
One glaring problem is the remarkably low pricing of carbon credits – sometimes too low to cover the costs of implementing and operating emission reduction projects.
According to a 2018 report from the Intergovernmental Panel on Climate Change (IPCC), to achieve the goal of limiting global warming to 1.5°C the price of carbon credits needs to be at least $100 (about £80) per ton of carbon dioxide equivalent (CO2e). The EU’s Emissions Trading System, the world’s largest carbon market, currently prices carbon credits at the equivalent of $94 per ton (about £75).
As a result, African countries might not receive equitable compensation for their emissions reductions. Western companies, in contrast, stand to profit significantly, potentially exacerbating economic disparities.
For example, a European airline might purchase low-priced carbon credits from a reforestation project in Africa, allowing them to continue business as usual without making substantial changes to reduce their own emissions. Meanwhile, the African country hosting the reforestation project will receive only a fraction of the benefit compared to what the airline saves.
If they rely on carbon credits, African countries would forfeit the opportunity to grow their manufacturing capacity and accelerate economic innovation
Another problem is the potential for projects that do not genuinely reduce emissions to be legitimised.
In March, US carbon offset certifier Verra suspended credits issued by the award-winning Northern Kenya Grassland Carbon Project, operated by the Northern Rangelands Trust, because of problems with validation and methodology.
Land grabbing and exploitation of communities can also occur when wealthy nations or corporations, both local and foreign, acquire land for carbon offsetting projects.
The Northern Rangelands Trust in Kenya, for instance, wants to use 4.7 million acres of land in a high conservation area for a carbon offsetting project, which it envisions will last 30 years. Borana pastoralists who once grazed their animals freely on community lands have been kicked off and had their Indigenous practices altered.
In the Democratic Republic of Congo, villagers in Bofekalasumba were allegedly exploited by a company selling carbon credits. Similar projects have led to the displacement of the Luwero community in Uganda, upending their livelihoods and cultural heritage, when more than 2,900 acres of land were donated to foreign investors for reforestation of depleted forests.
A few months before the Africa Climate Summit, Kenya’s parliament passed two pieces of legislation. One amended the 2016 Climate Change Act to include carbon markets. The other, the Carbon Credit Trading and Benefit Sharing Bill 2023 – outrageously – defines a “community” as “a group of people who may be displaced to make way for carbon credit trading business”. It also says the region covered by a carbon trading permit “includes any area either above or below the land and airspace of the Republic of Kenya including forests, internal and territorial waters and the seabed underlying these waters”.
This can be seen as giving carbon trading companies the exclusive rights to own natural resources that should be used by local communities in Kenya.
This is similar to what happened in the Agadez region of Niger, where US carbon trading corporation African Agriculture Inc. was granted a 50-year lease with access rights to groundwater and exclusive rights to a total of two million hectares for the production of carbon credits.
What should happen instead?
The potential for economic exploitation, greenwashing and displacement of communities should give African countries pause in blindly embracing carbon markets.
Efforts to address the climate crisis and safeguard the environment must always place communities at the centre. African leaders must also advocate for real solutions that help communities adapt to the climate crisis, such as creating infrastructure to help them access food during prolonged periods of droughts, containing floods, and providing water for pastoralist and farming communities.
If African governments want to trade in carbon markets, they should consider establishing community-owned and managed projects that benefit the local communities that preserve these natural resources.
As the saying goes, he who pays the piper calls the tune. It has long been Africa’s experience that any treaties and agreements made with the Global North have always been in favour of the Global North. What makes these carbon markets any different?
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