On August 13, the public was invited to give their views on a Bill that sought to give clear guidance on how communities can benefit from carbon trading.
The Climate Change Amendment Bill, 2023 seeks to amend the Climate Change Act, 2016 to provide for the regulation of the carbon markets.
President William Ruto on the other hand in November 2022 said the carbon credits market should benefit communities fighting the adverse effects of climate change.
Speaking at Sharm El-Sheikh, Egypt during the launch of the African Carbon Markets Initiative, Ruto noted that Kenya is already a leader in the generation of carbon credits in Africa, accounting for more than 20 per cent of the continent’s volume.
What are carbon markets?
Carbon market refers to markets in which carbon credits, in other words carbon certificates are obtained and sold within defined standards for the prevention or reduction of greenhouse gas emissions.
Companies or individuals can use carbon markets to compensate for their greenhouse gas emissions.
They do this by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions.
The carbon market has quickly become a compelling avenue that both individuals and organizations are keen to explore.
There are two types of carbon markets; compliance and voluntary.
Compliance markets are created as a result of any national, regional or international policy or regulatory requirement.
Voluntary carbon markets, both national and international refer to the issuance, buying and selling of carbon credits, on a voluntary basis.
The current supply of voluntary carbon credits comes mostly from private entities that develop carbon projects.
They can also come from governments that develop programs certified by carbon standards that generate emission reductions or removals.
According to Science Direct, demand comes from private individuals who want to compensate for their carbon footprints, corporations with corporate sustainability targets and other actors aiming to trade credits at a higher price to make a profit.
The Paris Agreement however enables the use of such market mechanisms through Article 6.
That’s why around the world, interest in carbon markets is growing.
83 percent of NDCs state the intent to make use of international market mechanisms to reduce greenhouse gas emissions.
Negotiations related to the operation of the Article 6 mechanisms under the Paris Agreement were at the centre of COP26 in Glasgow.
With the decisions taken there, the Paris Rulebook to implement the Agreement was considered complete.
However, some remaining details need to be resolved.
Further progress was made at COP27 and discussions are set to continue at COP28 in Dubai, United Arab Emirates.