By Faridat Salifu
The African Development Bank (AfDB) has officially joined the African Carbon Markets Initiative (ACMI), a strategic move aimed at empowering African countries and the private sector to secure additional resources for combating climate challenges.
This announcement was made by Dr. Kevin Kariuki, Vice President for Power, Energy, Climate, and Green Growth at the AfDB, during a roundtable at the Bank Group’s 2024 Annual Meetings, held from May 27 to 31.
“I am pleased to announce that the African Development Bank is now an official member of the African Carbon Markets Initiative. Through this decision, the Bank is committed to establishing a mechanism to support carbon market initiatives across our continent,” said Dr. Kariuki.
Dr. Kariuki emphasized the necessity of financial innovation and the potential of carbon markets to raise climate finance.
He urged African nations to seize opportunities for trading carbon credits under the Paris Agreement’s compliance markets, where prices for emission reductions are significantly higher than in voluntary markets.
The roundtable, moderated by Anthony Nyong, Director of Climate Change and Green Growth at the AfDB, gathered ministers of finance and heads of international organizations to share ideas and experiences, providing recommendations on addressing challenges and leveraging opportunities in carbon markets for African countries.
Dr. Alexander Ampaabeng, Deputy Minister of Finance in Ghana, highlighted Ghana’s policies in the carbon market, emphasizing the need for strategic investments in technologies to enhance transparency.
“Through digital monitoring, reporting, and verification, Africa will attract better carbon pricing,” he noted.
Mr. Mze Abdou Mohamed Chanfiou, Minister of Finance of Comoros, stressed the critical need for capacity building to help African countries, especially small island developing states (SIDS), capitalize on emerging innovations.
“This will enhance knowledge and enable countries to unlock the benefits of these innovations and strategies,” he added.
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Mr. Simplex Banda, Malawi’s Minister of Finance and Economic Affairs, described Malawi’s unique approach to the carbon market through investments in renewable energy projects, enabling countries and corporations to gain carbon credits.
Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development, Dr. Bärbel Kofler, called for addressing the challenge of double counting and ensuring investments consider the effects on communities, human rights, and the environment.
“We must maintain high ambitions globally in the standards we uphold in the carbon markets,” she emphasized.
Dr. Hanan Morsy, Deputy Executive Secretary of the United Nations Economic Commission for Africa, highlighted the need for global regulations to standardize pricing and ensure sufficient compensation.
She pointed out the disparity between voluntary and compliance market prices, which disadvantages African countries, and recommended deploying more technologies to improve data reliability and reporting.
Dr. Rebekah Shirley, Deputy Director for Africa at the World Resources Institute, underscored Africa’s substantial contribution to carbon removal and the potential of carbon markets on the continent.
She stressed the importance of Africa’s active participation and engagement.
Dr. Julius Court, Chief Operating Officer of Conservation International, emphasized the importance of strong regulations and revenue-sharing arrangements to benefit the entire value chain and turn opportunities into reality.
Aurelia Micko, Senior Advisor of Carbon Markets and Climate Finance at USAID, spoke on the need for integrity and transparency in carbon markets.
She highlighted USAID’s efforts in supporting the development of policies and frameworks on transparency, benefits-sharing, and using proceeds from carbon markets to finance countries’ Nationally Determined Contributions.
William Asiko, Vice President for Africa at the Rockefeller Foundation, emphasized fostering an environment where African carbon credits are perceived as transparent and embody integrity.
The roundtable facilitated a valuable exchange of ideas and experiences, providing recommendations for addressing challenges and leveraging opportunities in carbon markets across African countries.
