A wolf in sheep’s clothing: why Africa should shun carbon markets
There is increasing hype and push for so-called voluntary carbon markets in Africa.
Politicians, businesses, some NGOs and big philanthropy are trying to get an African Carbon Market Initiative off the ground, which would allow companies to buy carbon credits in exchange for continued emissions.
It’s become a major topic of controversy in the run up to the Africa Climate Summit this month. But Africa’s leaders should think twice before supporting this wolf in sheep’s clothing.
The idea is that some of the money paid by the corporations for these “carbon credits” – or more accurately, permits to pollute – would go towards projects in Africa that avoid or reduce emissions: renewable energy projects, or land and nature schemes that aim to capture carbon from the atmosphere.
But a number of key questions are being ignored – do they work for African people, the climate and development?
For western polluters, they are a silver bullet painkiller that allows them to keep pumping greenhouse gases into the atmosphere. But for Africa, they are a placebo drug that ends up making the pain of climate change far worse.
Africa is indeed right to demand climate funding from the global north, who caused the climate crisis which is devastating African people, economies, and nature in the first place.
But instead of signing up to a carbon market initiative that is full of booby traps, African leaders should use the opportunity to work together with others in the global south to interrogate where the real and essential money is for the critical role we play in protecting forests and nature, without which the Paris Agreement would fail?
Where is the money for the actions to reduce emissions and adapt to climate change that we need and deserve?
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A string of summits – the Amazon Summit last month, the Africa Climate Summit, the Three Basins Summit, and Cop28 – offer real opportunities for Southern leaders to drive forward financing options that aren’t merely set up to cover for the big polluters.
African leaders have three serious questions to ask about the African Carbon Market Initiative.
The first: will this cut pollution, or enable it? For global corporations, purchasing credits is the cheapest way to avoid real cuts and continue business as usual.
Take Delta Airlines: they claimed to be carbon neutral, in part down to the purchase of tens of millions of carbon credits per year. Meanwhile, they continue to operate 4,000 flights a day.
Calculations like this rely on the argument that a ton of carbon pumped out is equivalent to a ton of carbon avoided, or captured in forests or agricultural land. This is wrong.
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Fossil fuel emissions are permanent, but storing carbon in nature is fragile: forests burn down, loggers move in, and the carbon is released again. That means a hotter world: and for Africa, more droughts, floods and devastating storms.
The second question Africa’s leaders must ask: when we follow the money, who wins? Two players benefit from carbon markets more than anyone else: fossil fuel companies, and the financial brokers who buy and sell credits with huge markups.
Fossil fuel giants see their product legitimised, because polluters can continue to burn it by buying pollution permits.
Carbon credit traders are in line for hefty profits too: one study found that some brokers sell credits for three times the price they pay to the project that actually created them.
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Because they profit from every trade, they’re incentivised to create, trade and speculate on as many carbon credits as possible – so a market claimed to be worth $100 could actually be due to a single $10 credit being traded ten times. African countries will be sorely disappointed when the actual flow of funds is well below the market value they’re promised.
The third question leaders need to answer: Will carbon markets promote development? What do African people gain from this? It won’t be the money they deserve: financial brokers pocket plenty of the cash before it reaches projects in Africa. And promises of economic development by the African Carbon Markets Initiative rely on exaggerated claims for job creation and income.
Indeed, since carbon markets were started more than two decades ago, initially with the Kyoto Protocol, there’s a large body of evidence showing offsetting schemes mean insecurity and land grabs.
Planting new forests requires land, and so does flooding valleys for new hydropower projects.
In the Democratic Republic of the Congo, families were kicked off land they had owned and farmed for generations to make way for a carbon offsetting project for oil giant Total Energies.
Similar stories ripple through countries, like Colombia, who’ve had similar experiences. Which is why Indigenous communities from South America spoke out against carbon markets at Cop26.
Instead, Africa needs to take control of the discussion about how to finance our response to the climate crisis.
There is a lot at stake: adaptation costs in Africa as well as the costs for a clean energy transition and other measures to build zero-carbon societies will amount to hundreds of billions of dollars a year over the coming decades.
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We can’t afford to lock ourselves into the constraints of illusory and non-functioning carbon markets.
Africa is blessed with world-leading talent, the planet’s best sources of wind, sun, biodiversity and geothermal energy, and the ability to leapfrog other continents to the technologies of the future.
We should consider a new “polluter pays” funding mechanism, where polluting businesses would pay towards reducing emissions and adapting to climate change, where Africa defines its own needs.
The amount they pay would increase over time, to incentivise companies to stay within the limits of the Paris Agreement.
The money would boost African capacity for clean, resilient and affordable development led by local communities. It would remove the market brokers and middlemen and maximise money to projects.
We need a plan for debt cancellation, more domestic investment in renewables, an end to fossil fuel subsidies and investments, and a fair share of climate finance for Africa. Africa can’t afford another false solution to the climate crisis.
Mohammed Adow is the founding director of Power Shift Africa, a Nairobi based climate change and energy think tank.
