African nations should cease promoting land rights cheaply if they’re to extract extra worth from the “tarnished and depreciated” world carbon credit market, based on a brand new report from the Africa Finance Company (AFC).
Africa is house to among the planet’s most essential pure carbon repositories – together with forests, grasslands, peatlands and mangroves – giving the continent a possible monumental supply of worth on the worldwide carbon credit market. But beneath the present system too many nations are promoting their helpful belongings for meagre returns, the AFC says.
“As a substitute of maximising financial worth from our pure belongings, nations are partaking within the wholesale lengthy leases and sale of land – our valued birthright – to overseas intermediaries that hope to revenue from a extra appropriately priced carbon market of the longer term. That is akin to the useful resource curse of previous many years. We should guard towards complicit preparations that undervalue our pure belongings whereas enabling the industrialised world to maintain on polluting, with Africa struggling the largest prices from world warming,” writes Samaila Zubairu, president and CEO of Africa Finance Company, within the foreword to How Africa Can Unlock World’s Most Promising Web Zero Answer.
“As a substitute of promoting our land rights into immediately’s tarnished and depreciated carbon markets, we should always give attention to conservation and reforestation – with native actors driving the tasks, the financing, the verification, and the buying and selling. Our continent’s pure belongings will solely obtain their true worth by way of strong mechanisms that assure lasting advantages delivered to native communities and governments to maintain conservation lengthy after the preliminary funding is spent.”
“What we all know for sure is that Africa’s interplay with the worldwide carbon markets should change,” says the report. “We should take possession of the conservation and growth of our forests. We have to create our personal carbon emissions discount worth chain with world participation that captures and retains worth for Africa and the world for generations.”
Flaws in carbon markets
Carbon markets are a significant matter of debate on the ongoing Cop28 world local weather convention in Dubai, with nations discussing the institution of a UN-run multilateral carbon credit scheme, together with adopting standardised methodologies for figuring out credit score issuance.
The AFC says that world carbon markets supply a realistic method ahead, with scope to draw significant and much-needed finance for conservation, power transition and local weather resilience. But, as issues stand, the market dangers enabling polluting nations and industries to disregard the burden of their “air pollution per capita” duties and justify backsliding on pressing emission reductions by hoovering up low-cost carbon credit. Moreover, a lot of the worth of carbon credit is captured by merchants and monetary establishments within the wealthy world (for additional particulars see “How can Africa get a good value for its carbon credit?”).
Criticism of the carbon market has intensified this 12 months, amid a sequence of high-profile media stories exposing carbon offset tasks that seem to have obvious flaws of their design and methodology.
Exposés in worldwide media have drawn consideration to REDD+ tasks – a kind of scheme during which the proceeds of carbon credit can be utilized to guard present forests. Investigations have prompt that many of those schemes exaggerate their affect – in some instances, credit have allegedly been offered to “shield” forests that aren’t really in speedy hazard. Such schemes are mentioned to be “nugatory”, in that the acquisition of carbon credit makes no distinction to the quantity of carbon being faraway from the ambiance. The impact of this reporting has been to solid a shadow over the complete voluntary carbon market. Non-profit group Carbon Direct estimated final month that carbon credit score issuance is ready to say no by 7% between 2021 and 2023.
The injury to market confidence from these recurring exposés is proven by “a dramatic decline in issuance and costs of carbon credit,” says AFC. Local weather tasks in poorer nations have been the largest casualty: representing practically three-quarters of general issuance in 2021, the growing world’s share has dropped to 53% in 2023.
“In a correctly functioning carbon market, offsets based mostly on preserving and increasing Africa’s distinctive carbon sinks should inevitably be prime quality and excessive worth, precisely what the world wants at this essential juncture,” the AFC says.
Africa should take a lead
The report notes that halting deforestation and increasing Africa’s carbon repositories is easier and cheaper than the experimental carbon seize and storage applied sciences which may be adopted wholesale by the wealthy world in response to the chaos within the carbon markets. Pure options usually tend to profit Africa and the world, it argues.
“For this reason we’re advocating for African management to catalyse a shift in the direction of high-quality nature-based carbon removing offsets that allow our continent to guard its helpful carbon sinks, whereas rising the worth of Africa’s offset credit to finance additional conservation, reforestation and various livelihoods that maintain the environment,” says the report.
“We should reshape the flawed logic of guidelines governing carbon markets, putting emphasis on incentivising the preservation and growth of our forests. The prevailing idea of additionality undervalues the historic and present significance of African forests in sequestering carbon dioxide, inadvertently accelerating deforestation… It’s important that the continent’s political and financial management take a strategic strategy to harness the total advantages of a viable future carbon market, which Africa should lead,” Zubaira concludes.
