Africa should trade its carbon credits to finance renewable energy – Expert


Africa needs to switch from fossil fuels to renewable energy sources to increase energy security. Pictured here is a coal factory in Hwange, Zimbabwe. Credit: Busani Bafana/IPS
  • by Busani Bafana (bulawayo)
  • Inter Press Service

Carbon credit offers African countries — many of which rely on fossil fuels for energy — an opportunity to protect themselves from climate change while raising much-needed funding for the transition to renewable energy, said Jean-Paul Adam, Technology Director, Climate Change and Natural Resources Management Division at UNECA.

Carbon credits are globally traded goods or permits that allow emissions of one tonne of CO2 or one tonne of carbon dioxide equivalent gases to be traded on national or international carbon markets. These credits, which can be used to stimulate economic growth and attract financing for various projects, are traded on the carbon offset markets.

By selling carbon credits, African countries can also tackle climate change by protecting their forests that absorb and store a measured amount of carbon. In addition, the carbon credits can also be sold as ‘compensation’ to companies that are unable to reduce pollution to reduce emissions elsewhere.

Lack of funding and capacity to trade in global carbon markets are hurdles African countries must overcome in growing global carbon markets, where carbon price revenues rose nearly 60 percent last year to about $84 billion, according to the World Bank.

Redeeming CO2 credits

Africa suffers from energy insecurity as evidenced by chronic power outages and power outages that come at huge cost to people’s livelihoods and economic growth.

Fossil fuels dominate Africa’s energy mix, which consists of crude oil, coal, natural gas, hydropower, wind and solar energy. Africa is an untapped market for carbon trading. According to the report of the International Renewable Energy Agency (IRENA), about two percent of global investments in renewable energy over the past two decades have been made in Africa.

But letting go of fossil fuels is a catch-22 situation for African countries. Many could lose vital revenues and risk losing natural resources if global demand for fossil fuels declines in favor of renewable energy.

More than 600 million people in Africa have no access to energy, according to the African Development Bank, and the continent has some of the world’s lowest rates of access to electricity for African countries at just over 40 percent.

UNECA supports African countries to increase their resources reliably and transparently through carbon trading, Adam said, pointing out the need for an appropriate oversight body for transparent trading of carbon credits.

He said African countries are the guardians of some of the world’s important carbon-removing assets. Large-scale natural and land-based assets could enable African countries to meet 30 percent of the world’s sequestration needs by 2050.

“We know that the rate of deforestation in Africa is highest in all regions of the world, and therefore a well-structured carbon credit system can enable African countries to protect risky resources and generate revenue from protecting those resources,” said Adam.

UNECA projects that through nature-based carbon removal, Africa could generate between $15 and $82 billion annually, depending on the price of carbon. For example, at $50 per tonne, the revenue potential of natural carbon sequestration removal would be $15 billion. Adam said the average price for carbon credit in Africa is currently about $10 per tonne, which can be increased by creating high-quality registers.

Africa’s carbon market was not as well developed as many countries did not have registers to measure and trade carbon emissions.

Adam argued that a predictive carbon market would benefit African countries that have long-term access to affordable energy.

Africa is responsible for only three percent of the cumulative global CO2 emissions and less than five percent of the world’s annual CO2 emissions. The United Nations Framework Convention on Climate Change (UNFCCC) emphasizes that Africa has made the smallest historical contribution to the greenhouse gases that cause global warming, but suffers the most from the negative effects of climate change.

“African countries spend an average of nine percent of their budgets, meaning that for every $100 governments spend, $9 is immediately cut just to pay for climate change,” Adam told IPS. “Essentially, climate change puts a tax on African countries that is higher compared to incomes in other countries.”

Adam says Africa has put in place an energy transition plan to increase energy security using natural gas as a transition fuel, as many countries did not have access to geothermal and hydropower that could also be used to generate baseload.

African countries, through the African Union, have adopted a common position for the energy transition, recognizing natural gas as a temporary energy need, phasing out oil and coal and enabling greater investment in renewable energy, especially solar, wind and geothermal energy. created.

No to gas

Africa’s Common Position on Access to and Energy Transition, proposed for adoption by African Heads of State, to be launched this year at COP27 in Egypt, is the result of the European Union’s recent vote for a new rule that takes into account with fossil gas and nuclear energy projects as “green”.

The African Group of Negotiators (AGN) and African civil society have opposed the plan. They fear it would undermine Africa’s energy access and transition goals, while the continent was tied to fossil fuels for decades.

“Africa is blessed with an abundance of wind, solar and other clean, renewable energy sources. African leaders should maximize this potential and harness the abundant wind and sun, which will help increase access to energy and tackle climate change,” said Mohamed Adow, director of Power Shift Africa.

Lorraine Chiponda, coordinator of the African coal network, said the acceleration of gas projects in Africa was another colonial and modern ‘Scramble and Partition of Africa’ among energy companies and rich countries.

While Omar Elmawi, coordinator of #StopEACOP, noted: “Africa needs to wake up and stop acting like (it is) Europe’s gas station and always look to solve their (developed) energy problems. It is time to think together about what is best for the continent and its people. This is a continent ripe for renewable energy.”

Report of the IPS UN Office

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© Inter Press Service (2022) — All rights reservedOriginal source: Inter Press Service

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