African Carbon Markets Initiative billed as a game changer in Africa

The African Development Bank (AfDB) and the International Emissions Trading Association (IETA), launched the African Carbon Market Initiative (ACMI) to boost carbon trading across the African continent, with the goal being 300 million new carbon credits yearly by 2030. ACMI aims to help African countries participate in the global markets by building institutional capacity, promoting private-sector investment, and creating necessary policies. 

According to the Economic Commission for Africa (ECA) interim Exec Sec. Mr. Antonio Pedro, “Carbon markets are a great opportunity for African nations’ sustainable industrialization, economic transformation and diversification.” Therefore, involved nations have the necessary support from AU to access climate change finance and the mechanism for monetizing carbon credits.

If properly executed, the initiative provides an excellent opportunity for Africa to play a bigger role in global efforts to mitigate climate change. The ACMI is a great way to reduce greenhouse emissions and provide an investment avenue for governments in clean energy and low-carbon technologies. Additionally, the private sector has been mobilized to fill necessary gaps in the growing market. These markets are also projected to reduce poverty and improve vulnerable African livelihoods.

There may be a need to exploit the carbon resources available in Africa. For instance, the vast Congo Forests hold around 8% of the global forest-based carbon, absorbing 1.2 billion tons of CO2 annually. The problem arises in implementing the restrictions, challenges in building institutional capacity and creating an effective policy for such carbon markets.

Also, private sector involvement still needs to be fully addressed, considering some companies might take advantage, endangering Africa’s climate change control. Additionally, carbon markets are subject to price volatility, which may affect the revenue generated.

African Carbon Markets Initiative is an important project with the potential to promote economic development and effectively contribute to climate control. African countries can transition to a low-carbon economy by formulating the right policies, incentives, and institutions. Therefore, necessary steps should be taken, including rehabilitation of the carbon-rich areas for the full realization and implementation of Carbon trading.