How might COP28’s outcomes impact the Private Sector in Africa?
On the side-lines of the COP, a series of climate finance announcements were made that could advance private sector climate investment on the African continent. Countries were able to reach agreement on key milestones such as renewable energy and energy efficiency which will undoubtedly shape global demand and supply chains. However, stalled progress on carbon markets and Article 6, and weak text on the phase out of fossil fuels may dilute the effectiveness of these milestones.
Malawi orders review of Carbon Credit projects as Kenya introduces new Carbon Markets Bill
Malawi and Kenya are both seeking to firm up their domestic policy on carbon markets, with a focus on ensuring more benefits for communities. Echoing Zimbabwe, Malawi has stated an intention to revisit existing contracts, while Kenya is looking to devise a more detailed set of rules on benefit sharing, governance and legal processes.
African Countries Move to Regulate Domestic Carbon Markets and Claim Revenue
A Kenyan county governor has made a bold move to revoke existing carbon credit contracts, similar to what happened in Zimbabwe a few weeks ago. The statements follow a push to develop more domestic regulations and guidelines to govern carbon credit activity on the continent.
Zimbabwe to Seeking to Take Over its Carbon Credit Market
Zimbabwe plans to nullify existing carbon credit agreements and to claim 50% title to carbon credit revenue from offset projects, with foreign investors limited to 30%
Africa Carbon Markets Initiative announces 13 action programs
The African Carbon Markets Initiative (ACMI) was launched at COP27 in November last year, with the ambition of having at least 300 million carbon credits from projects on the continent retired annually by 2030. At its Steering Committee meeting in January this year during the Abu Dhabi Sustainability Week, ACMI launched 13 action programmes to achieve this goal. This includes the development of “country carbon activation plans” which Kenya, Gabon, Malawi, Mozambique, Togo, Nigeria, and Burundi have all signed up to do.
Developing countries adopt proactive stance on future carbon markets
Article 6 of the Paris Agreement places greater responsibility for and control over domestic mitigation efforts in the hands of national governments. In response, various developing country governments such as Peru, Papua New Guinea and Indonesia are intervening into their domestic markets to secure locally generated carbon assets to support national climate commitments. This has taken different forms in different countries but most recently includes moratoriums on certain types of projects in Papua New Guinea, and the temporary halting of the issuance of certain credits in Indonesia.
First Meeting of the Article 6.4 Supervisory Body under the Paris Agreement
The initial administrative steps required to kick-start processes under Article 6.4 of the Paris Agreement have commenced with the first meeting of the Supervisory Body held between 25 to 28 July 2022, in Bonn, Germany. The newly created Supervisory Body of the Article 6.4 Mechanism has a fundamental role to play in framing the future of the international carbon market. The evolution of the carbon market has direct relevance to African countries, most of which have expressed an intention to rely on Article 6 as part of their NDC implementation plans.
