By Sharon Atieno

The quest for Africa to unlock investment in its vast resources through carbon markets has received a US$ 650 million boost.

The commitment was made by the United Arab Emirates (UAE) Independent Climate Change Acceleration (UICCA) and Climate Asset Management during a panel session at the Africa Climate Summit. UICCA pledged US$ 450 million while Climate Asset Management committed US$ 200 million.

Africa aims to unlock its carbon market potential from a paltry 2% to 40 percent by 2030. Though the global carbon market is valued at US$ 2 billion, between 2016 and 2021 Africa only accounted for 11 percent of this market.

The continent targets to reach its goal through the Africa Climate Market Initiative (ACMI), formed during the 27th United Nations Climate Change Conference of Parties (COP27) in Egypt.

The initiative is a collaboration between Sustainable Energy for All (SEforALL), the UN Economic Commission for Africa and The Global Energy Alliance for People and Planet (GEAPP).

According to William Asiko, Vice President Rockefeller Foundation, Africa Regional Office, ACMI serves as an umbrella organization to scale carbon markets run by Africans situated in Africa and representing African interest in the global market.

The initiative is aiming to help Africa create 300 million credits every year, which would create 30 million jobs and US$6 billion in new income, he noted.

By 2030, ACMI hopes to produce more than 1.5 billion credits yearly in Africa, generating over US$120 billion and supporting more than 110 million jobs.

According to Asiko, carbon credits are a way to mitigate the effects of climate change, they are not a ticket out of the effects of greenhouse gas emissions.

“Africa has an opportunity to develop carbon markets at scale.  Carbon markets have a demand from high emitting countries to equalize their emissions and bring them to net zero,” he said.

“If we can be the world’s supplier of carbon credits, it is estimated that between now and 2030, Africa could develop enough carbon credits to raise US$ 30 billion in revenue.”

Supporting the development of this market in Africa, John Kerry, US Special Presidential Envoy for Climate said the carbon market is one more tool to accelerate the millions of dollars needed to reach net zero.

However, he noted that Africa and the global south can benefit from the carbon market only if it can grow and reach billions in order to work effectively.

“For that, we need to ensure the environmental integrity of the market. This is critical not only to protect the climate but also to create a thriving market because people won’t take the risk of getting in a market that doesn’t have the right standards and guidelines,” Kerry said.

On his part, Ambassador Majid Al Suwaidi, COP 28 Director General said credible and high-integrity carbon markets can help mobilize lots of cross-border financing commitments, particularly in the global south.

Al Suwaidi noted that in its current form carbon market faces a crisis of sorts; a lack of unified standards is undermining its integrity and diminishing interest.

Our primary objective must be to restore confidence and ensure that the highest integrity standards are firmly in place and actively employed.

The ongoing climate summit is anchored under the theme “Driving Green Growth and Climate Finance Solutions for Africa and the World.” Carbon markets are one of the areas the continent is looking at as a solution for driving climate finance.