Budget plan paves way for carbon trading hub
Posted Monday, July 12 2010 at 00:00
Kenya is set to become a carbon trading hub in Africa if plans to establish a regional carbon emissions trading market prove successful.
During the 2010/2011 budget of June 10, Finance minister Uhuru Kenyatta proposed to develop a frame-work for carbon trading that would outline how to register and participate in the a scheme in which polluters would buy and sell the right to emit carbon.
The framework will also guide how revenue generated from carbon trading would be shared to ensure accountability.
“The Government will establish a carbon Emission Trading Scheme (ETS) in Nairobi to pioneer the carbon market in Africa,” said the minister.
The carbon trading scheme, which is the first in Africa, is set to improve livelihoods of many Kenyan farmers and pastoralists by generating money in exchange for trees planted.
Carbon dioxide, a green house gas responsible for damaging the ozone layer, contributes to climate change through global warming .
The carbon credit market enables entities that emit more carbon than the set limits, to buy credits from those engaged in initiatives that clean up the emissions.
The global carbon trading market is estimated to be worth Sh13 trillion according industry data provider, Carbin Point, but only a very small fraction of this, about two per cent, trickles down to Africa.
The EU’s emissions trading scheme is the largest multi-national carbon trading scheme in the world; with an objective of cutting its emissions by 20 per cent by 2020.
Manufacturers with high carbon dioxide emissions pay up to Sh900 per ton emitted into a set fund, which is then passed to firms involved in activities that help in reducing these gases from the environment.
Last year United Nations Environmental Programme (Unep) named Kenya as one of the countries in the developing world that is on the path to becoming a leader in renewable energy by 2015.
The Copenhagen deal which is to replace the Kyoto Protocol that expires in 2012, also seem to have spurred some action locally, with president Kibaki announcing the start of huge investments amounting to Sh148 billion every year in wind and geothermal power.
These are indications that carbon energy conservation and carbon trading in Kenya may pick up from this year.
“Africa needs both well coordinated regional strategies and an Africa-wide strategy,” said Mr Murefu Barasa, a fellow at Yale University’s school of forestry and environmental studies, adding that Kenya’s efforts to set up an African carbon trading market would not be achieved if the projects engaged in are not sustainable on their own.
It is a prerequisite that before a project is considered as a carbon credit selling venture it should be able to sustain it self from its core activities.