Fiscally challenged African nations are seeking a substantially larger portion of the projected $2 billion carbon credit market, which is expected to expand fivefold by 2030.
Despite possessing the world’s second-largest rainforest and extensive carbon-absorbing ecosystems such as mangroves and peatlands, Africa currently contributes a mere 11% of the global offsets.
During the inaugural climate summit on the African continent, Kenyan President William Ruto kick-started an ambitious initiative aimed at increasing Africa’s carbon credit production by a staggering 19-fold by the year 2030. This initiative garnered pledges totalling hundreds of millions of dollars on Monday.
- Speaking during the summit, President Ruto said, “They have the potential to absorb millions of tons of CO2 annually, which should translate into billions of dollars” as reported by France24.
Objective of the sumit
The organizers of the three-day Nairobi summit have a primary objective: to present Africa as an attractive destination for climate investment, shifting the narrative away from portraying the continent solely as a victim of floods, droughts, and famine.
African governments recognize the significance of carbon credits and other market-based financing mechanisms as essential tools for mobilizing funds that have been slow to materialize from wealthy donor nations.
A report by the non-profit Climate Policy Initiative from last year revealed that Africa had only received approximately 12% of the required funds to address the impacts of climate change.
- Speaking to delegates at the summit, host- President Ruto said, “For a very long time we have looked at this as a problem. It is time we flipped and looked at it from the other side.
- “We must see in green growth not just a climate imperative but also a fountain of multi-billion dollar economic opportunities that Africa and the world is primed to capitalise.”
Investments during the summit
CBNCAfrica reports that one of the highly anticipated transactions involved the United Arab Emirates (UAE) pledging to purchase $450 million worth of carbon credits from the Africa Carbon Markets Initiative (ACMI).
Climate Asset Management, a partnership between HSBC Asset Management and Pollination, a specialized firm focusing on climate change investments and advisory services, also revealed a substantial commitment of $200 million towards projects aimed at generating ACMI credits.
Meanwhile, the United Kingdom announced that UK-supported initiatives worth £49 million ($62 million) would be unveiled during the summit, while Germany disclosed a €60 million ($65 million) debt swap agreement with Kenya, facilitating funds for environmentally-friendly projects.
What you should know
The ongoing African Climate Summit in Nairobi aims to address Africa’s climate challenges with African-led solutions. A primary objective of this summit is to establish a unified African stance for COP28 scheduled for November in UAE-Dubai.
At the end of the three-day summit, all attending African leaders will endorse the Nairobi Declaration on Climate Change. This declaration will outline Africa’s proposed remedies for the climate crisis, notably emphasizing the significance of renewable energy.
Africa possesses substantial renewable energy potential. It has the capacity to generate up to 40% of the world’s solar power, although currently, it only contributes about 1% to global solar energy production. Additionally, the continent has harnessed less than 1% of its wind energy potential.
