Seize Opportunities In Carbon Markets, Experts Urge Africa`s Private Sector
Africa’s private sector should realign itself strategically to benefit from a windfall presented by investments in the carbon markets.
As the move towards low carbon economy gathers pace, African Countries must create a conducive policy environment as well as legislative and regulatory safeguards, to anchor a robust carbon credit market.
The proposals were made during the Inaugural Africa Green Business Summit held in Nairobi recently. “Investment opportunities created by the carbon market are tenfold.
African countries can seize the moment by directing more investments towards this endeavor in order to cover a milestone in carbon offsetting as well as lifting economies and livelihoods of the population” says Gregory Pfeifer, Senior Consultant, Africa Practice.
The global carbon market created through Kyoto Protocol enforced clean development mechanism (CDM) is worth US$ 64 billion.
Clean Development Mechanism (CDM) is one of the three flexible mechanisms created by Kyoto Protocol to facilitate trading of credits for carbon emissions reduction. It is the only mechanism available to African Countries, which have no commitment to reduce emissions under the Kyoto Protocol.
Pfeifer says that Africa accrues a partly 2% share of the benefits derived from a range of projects in renewable energy, biomass and reforestation.
Asia and the Pacific have 76% of total CDM projects in the global South.
According to Pfeifer, various hurdles that includes limited technical capacity, limited funds and wanton destruction of forest ecosystem, have dwarfed efforts to strengthen carbon trading in Africa.
“Governments must scale up development of sound policies to enable private companies undertake tree planting, restoration of degraded water catchments and other ecosystems, to boost uptake of carbon”, says Pfeifer.
The private sector should as well invest in biodiversity conservation and activities geared towards reversing land degradation. He says the benefits are legion.
“Private sector investments in carbon offsetting projects will not only broaden economic base, it will assist communities adapt to climate change”, adds Pfeifer.
He challenged utilities in energy, water and conglomerates involved in mining and agribusiness to invest more in carbon offsetting projects and grab a slice of the pie in the 40 billion Euros worth carbon market in Africa.
Betty Maina, CEO, Kenya Association of Manufacturers (KAM), called on the government to provide incentives for small and medium sized companies to enable them actively participate in offsetting carbon emissions.
“The government should provide clear policy guidelines, increase budgetary allocation towards energy efficiency programs and reduce taxation and duties levied on energy saving equipments” she told Africa Science News Service.
Kenya’s manufacturing sector has grappled with the challenge of climate change mitigation through development of sound and cost effective energy efficiency measures.
“Demand for energy in Kenya is growing at a rate of 6% and is largely driven by investors in manufacturing sector”, said Maina.
The manufacturing lobby is encouraging companies to implement “energy efficiency programmes” and document their carbon footprint as a starting point to improved environment change. The industrial sector in Kenya is as well being encouraged to shift over reliance on fossil fuels to agro fuels.
The CEO says that Kenyan industries are presented with 30% energy saving potential and can save an estimated US$ 40 million if they implement these programmes. She however maintains that green investments should reflect on a Company’s bottom lines.