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Carbon credits: Western-dominated schemes won’t solve Africa’s climate crisis [1]
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Date: 2023-09
The Africa Climate Summit 2023 in Kenya last week united African leaders for a discussion on the climate crisis, with a specific focus on Africa and its policy stance ahead of COP28 in Dubai.
One would have expected African leaders to propose sovereign solutions to the challenges faced by their countries. These include recurrent hunger, flooding, drought, resource exploitation, water and soil pollution, and control of food systems by Western corporations.
But sadly, the discussions at the early September meeting in Nairobi, Kenya were dominated by Western interests – particularly regarding carbon markets, in which companies buy and sell carbon credits. These are like certificates allowing them to emit a set amount of pollution.
For example, imagine a big company wants to pollute a bit more than it is allowed but has used up all its existing carbon credits. The legal way to do this would be for the company to buy extra certificates from another company in the carbon market. In essence, carbon credits permit those who can afford it to continue polluting the environment, while shifting the offset burden onto those who cannot pay to pollute.
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Carbon markets have emerged as a Western-promoted tool to incentivise emissions reduction through afforestation and renewable energy projects. But their potential impact on Africa is a cause of concern, according to activists, campaigners and Indigenous peoples.
Consider this: the bulk of financial capital lies in the Western hemisphere. Countries that historically emitted lots of carbon into the atmosphere because of manufacturing have grown very wealthy. As a consequence, they have the money to buy carbon credits from countries that are not as wealthy.
What this means in the long term is that developed countries will continue to increase their level of industrialisation, while poorer ones continue to trade in sectors where they lack control of the market price.
Add to that a scenario in which African countries come to depend on carbon credits, creating a dependency akin to that on foreign aid and stifling the agency to find home-grown solutions.
In fact, if they rely on carbon credits, African countries would forfeit the opportunity to grow their manufacturing capacity and accelerate economic innovation.
Low prices
One glaring problem is the remarkably low pricing of carbon credits – sometimes too low to cover the costs of implementing and operating emission reduction projects.
According to a 2018 report from the Intergovernmental Panel on Climate Change (IPCC), to achieve the goal of limiting global warming to 1.5°C the price of carbon credits needs to be at least $100 (about £80) per ton of carbon dioxide equivalent (CO2e). The EU’s Emissions Trading System, the world’s largest carbon market, currently prices carbon credits at the equivalent of $94 per ton (about £75).
As a result, African countries might not receive equitable compensation for their emissions reductions. Western companies, in contrast, stand to profit significantly, potentially exacerbating economic disparities.
For example, a European airline might purchase low-priced carbon credits from a reforestation project in Africa, allowing them to continue business as usual without making substantial changes to reduce their own emissions. Meanwhile, the African country hosting the reforestation project will receive only a fraction of the benefit compared to what the airline saves.
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[1] Url:
https://www.opendemocracy.net/en/5050/carbon-markets-that-benefit-the-west-will-not-solve-africas-climate-crisis/
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