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Ambitious new African carbon market plan promises big money, tens of millions of jobs

Updated: Nov 20, 2022

Ambitious new African carbon market plan promises big money, tens of millions of jobs


Seth Onyango, bird story agency


Africa’s energy transition has received a massive shot in the arm with the unveiling of a new carbon offset scheme designed to prioritise carbon credits, generate billions of dollars in revenue and support tens of millions of jobs across the continent.

The Africa Carbon Markets Initiative (ACMI) was unveiled at COP27 in Sharm el-Sheikh, Egypt. It is led by a 13-member steering committee of African leaders, corporate heads and carbon credit experts. In the first phase, from now to 2030, the initiative aims to produce 300 million credits in Africa annually, to haul in US$6 billion in revenue and support 30 million jobs on the continent. From 2030 to 2050, the numbers will jump; 1.5 billion credits; US$120 billion in revenue and support for more than 110 million jobs.


Collaborators of the ACMI include the Global Energy Alliance for People and Planet (GEAPP), Sustainable Energy for All (SEforALL), and the United Nations Economic Commission for Africa, with the support of UN Climate Change High-Level Champions Dr Mahmoud Mohieldin and Nigel Topping.


Damilola Ogunbiyi, the CEO of SEforALL, noted that the current financing scale available for Africa’s energy transition is nowhere close to what is required despite its massive potential.


"Achieving the Africa Carbon Markets Initiative targets will provide much-needed financing that will be transformative for the continent,” she said.


The website carboncredits.com describes carbon credits, or allowances, as being like “permission slips for emissions”. One carbon credit is equivalent to one ton of carbon dioxide or, in some parts of the world, gases equivalent to carbon dioxide. Figures from Good Governance Africa capture just how small a role the continent currently plays in the global carbon market: it accounts for just 2% of trade, most of which is contributed by South Africa and countries in North Africa through projects that fall under the world’s main carbon market, the Clean Development Mechanism.


The ACMI hopes to dramatically increase that participation. It has developed a roadmap that identifies 13 action programmes to support the growth of voluntary carbon markets on the continent. These markets offer a space for governments, businesses, NGOs and private investors to purchase carbon offsets. There have been some green shoots in the African voluntary carbon market, with credit retirements growing by an average of 36% annually over the past five years. Stakeholders all agree that aggressive action will be required to maintain this level of growth in the coming decades.


Several African states, including Kenya, Malawi, Gabon, Nigeria and Togo, have committed to collaborating with ACMI to scale their carbon credit production by activating voluntary carbon markets.

 

Together and at their full potential, these countries could generate more than 300 metric tons of carbon dioxide equivalent (MtCO2e); even as little as 75 MtCO2e) would amount to double the total credits issued across the entire continent in 2021.


Vice President of Nigeria and ACMI steering committee member Professor Yemi Osinbajo said: “Carbon markets can deliver tremendous benefits for Nigeria and for Africa—creating jobs, driving green investment, and reducing emissions. Nigeria is putting the groundwork in place today so that in subsequent years, carbon credits become a major industry that will benefit our people.”


Vice President of Nigeria and ACMI steering committee member Professor Yemi Osinbajo.


This year, Gabon, which has 90 per cent forest cover, became the first African state to receive payment for protecting its forests. The UN-backed Central African Forests Initiative (Cafi) paid 17 million US dollars to Gabon as part of a 150 million US dollar deal, inked in 2019.


This move is meant to incentivise other forested nations to double up on conservation efforts as their rainforests suck out most of the world’s carbon dioxide from the atmosphere.



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