Global carbon markets: Are there opportunities for Sub-Saharan Africa?
"Human activities such as fossil fuel burning and deforestation have significantly increased the atmospheric concentration of greenhouse gases (GHG) leading to global climate change. Global climate change and its associated weather extremes pose considerable challenges worldwide, and mitigating the adverse impacts of climate change is a high priority for the international community. To reduce global emissions and curb the threat of climate change, many countries are participating in carbon trading. Carbon trading includes allowance-based agreements that impose national caps on emissions and allow participating countries to engage in emission trading as well as project-based transactions (for example, through the CDM or Clean Development Mechanism). The CDM allows industrialized countries with greenhouse gas reduction commitments to invest in emission-reducing projects in developing countries as an alternative to generally more costly emission reductions in their own countries. Funds made available by the CDM for carbon offsets provide an opportunity for cash-strapped developing countries to fund much needed adaptation measures. The potential annual value stream for Sub-Saharan Africa from mitigating GHG emissions is estimated to be US$4.8 billion at carbon prices of US$0–20/tCO2e. Moreover, agricultural mitigation measures, including soil and water conservation and agroforestry practices, also enhance ecosystem functioning, providing resilience against droughts, pests, and climate-related shocks. Yet the potential for Africa to contribute to global reductions in GHG emissions is quite substantial. Estimates suggest Africa could potentially contribute to GHG reductions of 265 MtCO2e (million tons of carbon dioxide or equivalent) per year at carbon prices of up to US$20 through agricultural measures and 1,925 MtCO2e/yr at carbon prices of up to US$100/tCO2e by 2030 through changes in the forestry sector. These amounts constitute 17 and 14 percent, respectively, of the global total potential for mitigation in these sectors. However, countries in Sub-Saharan Africa are marginalized in global carbon markets. Sub-Saharan Africa's share of the CDM market is nine times smaller than its global share of GHG emissions, including emissions from land use and land-use change. This brief is based on a paper that examines Sub-Saharan Africa's current involvement in carbon markets, potential for GHG emission reductions, constraints to further participation in carbon markets, and opportunities for expanding Sub-Saharan Africa's market share." from text
"Global climate change poses great risks to poor people whose livelihoods depend directly on the use of natural resources. Mitigation of the adverse effects of climate change is a high priority on the international agenda. Carbon trading, under the Kyoto Protocol as well as outside the protocol, is growing rapidly from a small base and is expected to increase dramatically under present trends. However, developing countries, in particular Sub-Saharan Africa, remain marginalized in global carbon markets, with Africa's market share constituting less than 1 percent (excluding South Africa and North African countries). The potential for mitigation through agriculture in the African region is estimated at 17 percent of the global total, and the economic potential (i.e. considering carbon prices) is estimated at 10 percent of the total global mitigation potential. Similarly, Africa's forestry potential per year is 14 percent of the global total, and the avoided-deforestation potential accounts for 29 percent of the global total. Appropriate climate-change policies are needed to unleash this huge potential for pro-poor mitigation investment in Sub-Saharan Africa. Such policies should focus on increasing the profitability of environmentally sustainable practices that generate income for small producers and create investment flows for rural communities. Pro-poor investments, community development, new research, and capacity building can all help integrate the agriculture, forestry, and land-use systems of developing countries into the carbon trading system, both generating income gains and advancing environmental security. Achieving this result will require effective integration, from the global governance of carbon trading to the sectoral and micro-level design of markets and contracts, as well as investment in community management. Streamlining the measurement and enforcement of offsets, financial flows, and carbon credits for investors is also needed. This review paper begins with an overview of global carbon markets, including opportunities for carbon trading, and the current involvement of developing countries, with a focus on Sub-Saharan Africa. This is followed by an assessment of the mitigation potential and options involving agriculture, land use, and forestry. The major constraints to the participation of Sub-Saharan Africa in global carbon markets are discussed, and options for integrating the region into global carbon markets are proposed." from authors' abstract
Climate change, mitigation, carbon markets, Clean Development Mechanism,
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