AFRICA – The African Development Bank (AfDB) has announced its participation in the African Carbon Markets Initiative (ACMI) during its 2024 Annual Meetings in Nairobi, Kenya.

This strategic move aims to mobilize additional resources to address the pressing climate crisis.

Despite ongoing debates surrounding carbon credits, AfDB is committed to contributing to developing this mechanism in Africa.

The institution’s decision to join ACMI, announced on May 30, 2024, underscores its dedication to leveraging carbon markets for climate action.

Kevin Kariuki, AfDB Vice President responsible for Electricity, Energy, Climate, and Green Growth, views this decision as strategic.

He believes it will empower African nations and the private sector to access additional resources to tackle climate challenges. ACMI was launched during the 27th United Nations Conference of the Parties on Climate Change (COP27) in Sharm el-Sheikh, Egypt.

The initiative aims to foster voluntary carbon markets across Africa while bolstering the continent’s contribution to global CO2 emissions reduction efforts under the Paris Agreement.

ACMI, headquartered in Nairobi, is spearheaded by the Global Energy Alliance for People and Planet (GEAPP), Sustainable Energy for All (SEforALL), and the United Nations Economic Commission for Africa (UNECA).

Kevin Kariuki affirms that by joining ACMI, the AfDB commits to establishing a mechanism that supports carbon market initiatives continent-wide. He envisions this initiative as a driver of financial innovation essential for financing Africa’s adaptation and resilience to climate change.

Alexander Ampaabeng, Ghana’s Deputy Finance Minister, who also participated in the AfDB’s round table discussion, emphasized the importance of enhancing transparency through strategic technology investments.

He stressed the role of digital monitoring, reporting, and verification in ensuring Africa benefits from improved carbon pricing mechanisms.

Africa’s carbon market ambitions face regulatory hurdles

According to the Kenya Institute of Public Policy Research and Analysis (KIPPRA), limited awareness and understanding of carbon markets among policymakers, businesses, and communities is another key constraint to the carbon market growth in Africa.

This hampers the implementation of carbon market initiatives, as stakeholders may not fully comprehend the potential benefits or mechanisms involved.

The presence of inconsistent and underdeveloped legal frameworks further indicates a broader deficiency in comprehensive understanding and engagement at the policy level.

Inadequate legal structures may impede the establishment of clear regulations, standards, and incentives necessary for the successful operation of carbon markets, hindering the creation of an enabling environment.

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