Africa’s carbon markets face significant challenges as they continue to prioritize export-oriented strategies reminiscent of the Kyoto Protocol, rather than adapting to the requirements set forth by the Paris Agreement. The shift in global climate reporting necessitates that countries must account for emissions reductions differently, affecting how these countries engage with international carbon trading.
In Kenya, recent developments have highlighted the tension between national climate commitments and the desire to export carbon credits. The Kenyan government has proposed a cumulative limit of 10 million tonnes of CO₂-equivalent for international transfers from 2025 to 2030 to protect its own climate goals. This move comes amid concerns over the ramifications of allowing too many credits to leave the country, which could undermine its climate pledges.
This caution is reflected in the collapse of KOKO Networks in January, a company that had relied on the sale of its clean-cooking carbon credits for its business model. The government’s refusal to issue necessary authorization deprived KOKO of the revenue it depended on, resulting in significant layoffs. As of October, administrators were reportedly unable to secure buyers for the company’s remaining credits.
The complexities surrounding carbon credit transactions are increasingly evident. The international carbon market’s design allows emissions reductions to be sold, but such sales can jeopardize a country’s ability to count those reductions towards its own climate obligations. In contrast, Asian countries like India and Indonesia have started to prioritize domestic needs over international sales, framing their carbon market policies in line with national climate targets.
Experts suggest that for Africa to successfully reform its carbon markets, it needs to enhance institutional capacity, including establishing reliable emissions accounting, predictable authorization processes, and a domestic market that can assign economic value to retained emissions reductions. The Africa Carbon Markets Initiative, launched at COP27, aimed to generate substantial revenue and jobs, yet these goals require a clear strategy to balance international sales with domestic needs.
As the upcoming COP31 in Antalya approaches, discussions are expected to shift toward redefining success in African carbon markets from merely exporting credits to fostering sustainable domestic carbon economies. African governments are being urged to seek support for better emissions accounting and carbon registries, which could lead to a more sustainable framework that benefits local communities while still allowing for some international participation.
