COP27: Expert Calls on Africa to Tap Into Multi-Billion-Dollar Carbon Market

delegates at a panel
Timescape Magazine
,
Sharm el-Sheikh, Egypt

COP27: Expert Calls on Africa to Tap Into Multi-Billion-Dollar Carbon Market

As the world gears up to avoid a climate catastrophe by limiting global warming to 1.5 to 2 degrees Celsius, there is growing evidence that engaging in carbon market schemes could become a more flexible way of reaching that goal.

It could either be through carbon pricing or through emissions trading schemes both of which operate on the “polluter pays” principle, which efficiently encourages switching to more sustainable sources of energy and reducing emissions-intensive activities.

In any case, the global carbon market is estimated at nearly $900 billion and growing. Africa, which accounts for less than 3% of greenhouse gas emissions, doesn’t yet benefit.

This low uptake of the carbon market dynamics worries Anil Bhatta, the Managing Director of the South African firm, Carbon & Clean Energy Solutions.

He told Timescape Magazine that his company manages carbon market projects across the globe, but unfortunately, “Africa has been left behind.”

“And honestly, the opportunities to create Carbon credits are much higher in Africa than in other continents …,” he asserted.

Following are excerpts of that conversation. 

two men pose for a selfie
Anil Bhatta with reporter Killian Ngala at COP27 / Credit: Anil Bhatta. 

What is the outlook of the carbon market today?

It’s very promising. We agreed to a carbon market in the COP26. So it comes under article 6.2 and article 6.4 and COP27 is all about implementation, making action plans, modalities and communications which is very exciting.

So, what are you proposing in terms of implementation?

First and foremost, we need capacity building for developing countries. They do not have proper registry systems, they do not know how to participate in the carbon credit scheme, and how to generate carbon credits. Apart from that, a registry needs to be created; there needs to be testing as well in my view, on how the whole system works, how you have a global registry from where countries can buy and sell carbon.

Please, explain how the whole system works and how you calculate the cost of a ton of carbon.

The cost comprises very many different elements. For example, when you develop a carbon project, if it is a forestry project, you need to buy land, buy seedlings, you need to hire a consultant to develop your project, you need to register the project to appropriate carbon standards, then you need a team of auditors who would audit the project and verify how many tons of carbon have been saved or offset; you estimate your cost of producing a single ton of carbon, and you just add your margin onto it and that is how the final cost of a ton of carbon is calculated.

The Congo Basin Rain Forest for instance is considered the second lung of the Earth after the Amazon. Officials in that region say if they keep carbon in trees, then alternatives must be provided for them to grow their economies, given that it is by felling trees that they can develop their economies. Are carbon credits enough for them to keep carbon in trees and still grow economically?

Some projects create carbon footprints from conservation: greenwashing. So, I think we need to do the real implementation, real action. You need to grow a tree, nurture it, and bring it into a forest. That will store carbon for many, many years to come and that is the most sustainable way of doing carbon projects.

That takes a rather long time!

It does.

If I want to get into the carbon market business, I buy seeds, and I plant and I nurture the trees in a forest. How do I start getting carbon credits? Must the tree get to maturity before I start drawing the benefits?

You get carbon credits at various stages of the tree, it’s all been calculated, and this is scientific. So, if you are planting eucalyptus or pine trees, for instance, there is data that will tell you that if the tree is four years old it will absorb this or that amount of carbon. So based on that, you will be able to get carbon credits at the different stages of the tree’s growth.

How much does a ton of carbon cost today?

It varies from country to country. For example, in Australia, we are helping some clients with a plantation forestry project. The carbon is sold between $35-$45 per ton, but globally, the standard varies between $8 to $30 based on different parameters. The cost of carbon is not just about carbon, it’s also about how much is being brought into the communities.

Are there any projects anywhere in Africa that are already yielding benefits to communities?

A good example is a project we are doing in Ethiopia. My company manages the carbon side of the project and we have been generating carbon credits every year. And the beauty of this project is that  the majority of the money generated from carbon credits goes back to the community. So, the community uses that money for different income-generating activities such as buying sheep, fattening the sheep, and selling at a higher price. Some communities use the income to engage in farming activities and so the carbon money is really flowing down to the communities, and they are benefiting a lot from that, especially women who are participating in income-generating activities.

Are there any figures attached to this project in terms of the amounts of money that might have gotten back into communities in the past two or three years?

I won’t have the exact details, but I can easily say that in the past two years, we have channeled over a million Euros into the communities.

You are taking part in the COP27 in Sharm el-Sheikh.  What decisions would you like to see taken that should generate interest, especially among Africans in investing in carbon markets?

I really believe that Africa needs to be benefiting from carbon markets because Africa has been left behind as compared to other countries in the carbon space. And honestly, the opportunities to create carbon credits are much higher in Africa than in other continents and I am saying this from experience after having worked in several parts of the world and across Africa. Africa should be awakened. An opportunity needs to be tapped from the carbon market space of which the benefits accrue to communities. So, I believe in designing projects that are community–centered, and with the involvement of community members. If we do it that way, we will go a long way because to succeed, communities must be involved in the implementation.

the congo forest
Carbon credits are expected to incentivize conservation in developing economies, such as Congo's / Credit: jbdodane via Flickr.

This story was produced as part of the 2022 Climate Change Media Partnership, a journalism fellowship organized by Internews' Earth Journalism Network and the Stanley Center for Peace and Security. It was first published by Timescape Magazine on 8 November 2022 and has been lightly edited for length and clarity.

Banner image: Delegates at the COP27 venue / Credit: Killian Ngala. 

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