Financial experts have called for the development of a clear framework for buying and selling carbon credits locally, saying the unregulated trade is costing the country billions in unrealized revenue in this booming sector to worldwide.
The value and potential of carbon trading has grown globally as more countries and companies become aware of the adverse effects of global warming.
The trade follows an offset system, where large greenhouse gas emitters buy permits and credits from carbon negative partners.
The Nairobi International Financial Center (NIFC), which recently announced plans to establish a carbon exchange in the country to enable small-scale trading, says a formal framework would unlock income for Kenyan forest farmers and small producers of green energy.
“We are in talks with several players and regulators to develop a framework for carbon trading to expand activity in the country, but this is an unregulated space,” the acting chief executive said. from the NIFC, Oscar Njuguna.
“Let’s start with the ground and create a good precise framework to sell carbon credits.” NIFC signed a collaboration agreement in July with AirCarbon Exchange (ACX) and the Nairobi Securities Exchange (NSE) to work on a carbon exchange in Kenya.
The partnership would establish a carbon ecosystem in Kenya connected to ACX’s international customer order book, enabling buyers and sellers, international and domestic, to transact efficiently and transparently.
A sustainable financial ecosystem is key to channeling global capital flows towards Kenya’s high-impact environmental projects such as climate risk mitigation, water and sanitation, reforestation and land restoration, among others.
“Carbon trading is a huge opportunity for Kenya, it could be at the center of Africa’s response to climate change. We have the assets we can use to demand from the Global North (large emitters) to connect our resources to their demand and secure revenue streams that will accelerate the economy and create jobs,” said Mr. Kelvin Massingham , Director of the Risk and Resilience Financial Sector. Deepening (FSD) Africa.
Kenya’s 32% greenhouse gas emission reduction target for Nationally Determined Contributions has been increased from the previous target of 30% by 2030 in the energy sectors , transport, industrial processes, agriculture, land use, forestry and waste.
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