UNECA encourages Africa to leverage renewable resources to generate revenue

Leonard Ncube, [email protected]

THE United Nations Economic Commission for Africa (UNECA) has said African countries could leverage their vast renewable energy resources, tropical forests and marine ecosystems to generate revenue through the export of premium carbon credits.

UNECA, in the 2024 Economic Report on Africa launched at the recently concluded 10th Africa Regional Forum on Sustainable Development (ARFSD-10) in Addis Ababa, Ethiopia, said carbon markets could support Africa’s goals of resilience and prosperity, in line with Agenda 2063 and they also present a potential path for achieving the Paris Agreement’s climate goals.

The report shows that in 2022, while the Voluntary Carbon Markets (VCM) value was a mere US$2 billion, the value of traded carbon permits in global markets reached a record US$909 billion.

“Africa currently realizes only around 2 percent of its annual potential of carbon credits. African countries could leverage their vast renewable energy resources, tropical forests, peatlands, and marine ecosystems to export premium carbon credits, providing a new revenue stream,” read part of the report.

A failure, however, to ensure credit additionality, appropriate governance, and high enough prices could lead to perverse market incentives that increase carbon emissions and slow the climate transition on the continent, says the report.

Acting Director of ECA’s Technology Climate Change and Natural Resource Management Division Mr Nassim Oulmane said there are two types of carbon markets that Africa could invest in.

These are the regulatory compliance market and the voluntary carbon market (VCM).

“Most of the credits in the VCM have come from nature-based solutions, including forest conservation, improved agricultural cultivation and reforestation. Energy savings from fuel efficiency and fuel switching were additional sources,” explained Mr Oulumane.

He said the continent should invest in its untapped renewable energy potential, youthful, rapidly growing workforce, available land and other natural assets and low emissions.

The African Carbon Market Initiative estimates that up to 190 million African jobs can be created by 2050 if the carbon price per tonne reaches US$80 and direct and indirect jobs are added beyond nature-based solutions.

“Proceeds from sales of carbon credits can provide additional revenue for climate-smart interventions. In addition to improving the climate, many of these interventions improve livelihoods, create jobs, spur new economic and sustainable industrial activity,” said Mr Oulmane.

The report was done following a study on investments in a sustainability transition in selected countries.

ECA, established by the Economic and Social Council (ECOSOC) in 1958 as one of the UN’s regional commissions, aims to promote economic and social development among its member states, including Zimbabwe.

Its mission includes fostering intraregional integration and enhancing international cooperation for Africa’s development.

With 54 Member States, ECA serves as both a regional branch of the UN and a crucial element of Africa’s institutional framework.

Commenting on the report, executive director of Africa Voluntary Carbon Credits Forum, Mr. Anglistone Sibanda said it buttresses the rationale behind the initiatives being done in Zimbabwe and in the Southern African region.

“This report is great reference that buttresses what we have been saying and the rationale behind the initiatives that we are carrying in Zimbabwe and in the Southern African region. Our biggest challenge in the region is lack of appreciation of this gigantic opportunity that was created by the Paris Agreement.

“This lack of understanding and of course the lackadaisical approach, exacerbated by bureaucratic bottlenecks and red tape within government structures is making the region miss out on this opportunity to tape into climate finance,” said Mr Sibanda.

He bemoaned lack of action on climate finance.

Mr Sibanda called for capacity building and unlocking of innovation to design and implement projects that avoid, remove or reduce green house gas emissions.

He said there are over 150 options of generating carbon credits and most people focus on AFOLU.

“As Africa Voluntary Carbon Credits Markets Forum AVCCMF, we are on a crusade to raise awareness, build capacity and coordinate initiatives around carbon markets in a bid to accelerate Africa into this gigantic climate economy. In light of that, we run trainings for those interested in becoming project developers so that they understand how carbon project development continuum,” he said.

“We are thus organizing a Southern Africa high level Summit alongside an Enviro-expo to bring together Heads of State, carbon market players across the value chain spectrum to discuss issues of policy frameworks, innovation promotion, financing and find ways to leverage on article 6.2 of the Paris Agreement to get Southern Africa Countries into bilateral agreements under the Internationally Transferable Mitigation Outcomes ITMOs mechanism and private players who are participating in the voluntary markets under Article 6.4 to build their capacities through collaboration in order to tap into the climate finance,” said Mr Sibanda.

In the efforts to tackle climate change, there are concerns on how developing and least developed countries can be expected to put forward ambitious climate pledges under the Paris Agreement, when many do not currently have the means or the resources necessary to enable an economy-wide transition towards a low emissions future.

Article 6 of the Paris Agreement enables international cooperation to tackle climate change and unlock financial support for developing countries.

The agreement allows countries to exchange mitigation outcomes bilaterally and to report their trade, and use them towards their nationally determined contributions (NDCs) and issuance of high-quality carbon credits.


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