Kenya is taking steps to regulate the trade in carbon credits from projects in the country, in a bid to boost benefits for the state and give the communities that host activities that generate the emissions offsets a quarter of the profit.
The East African nation will start a public-participation process on May 24 to collect views that will be included in a draft legislation for parliament to consider, according to documents issued by the environment ministry. Under the proposals, communities would get 25% of the profit from the programs.
The process that Kenya is following contrasts with Zimbabwe. The Southern African country this week announced that it will take half of revenue generated from the trade of securities generated in the country while local investors would need to get at least 20%. Projects that don’t comply will be voided, it said. The announcement caught investors by surprise and could jeopardize existing offset initiatives.
Kenyan President William Ruto this week advocated for the development of the industry.
We “aim to make carbon credits one of Kenya’s biggest export products,” he said in a speech in South Africa to the Pan-African Parliament, which includes lawmakers from around the continent. “To support this, we are working on the appropriate institutional framework to anchor carbon market regulation, align fiscal incentives and a green investor friendly environment to ensure communities benefit as businesses also flourish.”
Kenya’s plan to pass its Climate Change (Amendment) Bill is another sign that developing countries want to benefit more from the $2 billion annual trade in carbon credits, which are bought by polluters to offset their emissions of climate-warming gases. Each credit represents a ton of carbon dioxide-equivalent either removed from the atmosphere or prevented from entering it in the first place.
Countries from Gabon to Honduras and Papua New Guinea are seeking a greater share of income from the offset programs for state coffers or communities that host projects, such as reforestation, that generate the credits. The global trade is projected to grow to as much as $1 trillion per annum in 15 years.
African nations play a key role in generating the securities. The Democratic Republic of Congo ranked as the fourth-biggest originator of the offsets globally last year, Zimbabwe ranked ninth and Kenya 11th, according to data compiled by Bloomberg.
Ruto said the legislation will be passed within a month and urged other African countries to follow suit.
“I want to encourage us as a continent that that is the future,” he said. “Every other government, every other parliament, must begin to internalize and to work along these lines.”
--With assistance from Janet Paskin.
