Africa Should Trade its Carbon Credits to Fund Renewable Energy – UNECA

Africa Should Trade its Carbon Credits to Fund Renewable Energy – UNECA

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Energy

Africa must move away from fossil fuels in order to increase its energy security. Here is a picture of a coal-producing plant in Hwange (Zimbabwe). Credit: Busani Bafana/IPS

Bulawayo, Aug 31, 2022 (IPS). According to the United Nations Economic Commission for Africa, (UNECA), Africa needs to trade carbon credits to reduce greenhouse gases emissions, finance the transition from renewable energy, and boost its economic development.

Carbon credits present an opportunity for African countries – many dependent on fossil fuels for energy – to protect themselves against climate change while raising much-needed finance for the transition to renewable energy transition, said Jean-Paul Adam, Director for Technology, Climate Change and Natural Resources Management Division at UNECA.

Jean-Paul Adam, Director Technology, Climate Change and Natural Resources Management Division, UNECA.

Carbon credits are commodities or permits that can be traded globally and allow one tonne CO2 or one ton of carbon dioxide equivalent gas to be traded on national or global carbon markets. These credits can be used to stimulate economic growth and attract financing for different projects.

African countries can sell carbon credits to combat climate change. They can also protect their forests, which store and absorb a certain amount of carbon. Besides, the carbon credits can also be sold as ‘offsets’ to companies unable to cut pollution to reduce emissions elsewhere.

In order to succeed in the expanding global carbon markets, African countries must overcome obstacles such as lack of finance and inability to trade on them. Last year, the carbon pricing revenue grew by almost 60% to $84 billion. World Bank.

Carbon credits: Earning carbon credits

Africa suffers energy insecurity, as seen in chronic power load shedding and blackouts that have a huge cost on people’s livelihoods and economic growth.

Fossil fuels dominate Africa’s energy mix, which comprises crude oil, coal, natural gas, hydropower, wind, and solar power. Africa is a market that has yet to be explored for carbon trading. About two percent of global investments in renewable energy in the last two decades were made in Africa,  according to the International Renewable Energy Agency (IRENA) report.

However, for African countries, it is a Catch-22 situation to let go of fossil fuels. As the world’s demand for fossil fuels decreases, many could lose vital revenue and be left without access to their natural resources.

According to the African Development Bank more than 600 millions people in Africa do not have access. energy, and the continent has some of the world’s lowest electricity access rates for African countries at just over 40 percent.

Adam stated that the UNECA is supporting African countries in raising their resources transparently and reliably through carbon trading. However, he also pointed out the need to have an appropriate supervisory body for transparent credit trading.

He said that African countries are the guardians of some of the world’s important carbon removing assets. Large-scale natural and land-based assets can enable African countries to meet  30 percent of the world’s sequestration needs by 2050.

“We know that the rate of deforestation in Africa is the highest in all regions of the world, and therefore a well-structured carbon credit system can allow African countries to protect at-risk resources and generate income from the protection of those resources,” said Adam.

According to UNECA, Africa could generate between $15 billion and $82 billion annually through nature-based carbon reduction, depending on carbon’s price. For example, at  $50 per tonne, the revenue potential from natural carbon sequestration removal would be $15 billion. Adam stated that the average price of carbon credit in Africa is currently $10 per tonne. This could be increased by the creation high-integrity registry.

Africa’s carbon market was not as well developed as many countries did not have a registry to measure carbon emissions and trade them.

Adam argued that a market for predictive carbon would benefit African countries by providing them with long-term access and affordable energy.

Africa accounts for only three percent of cumulative global CO2 emissions and less than five percent of the world’s annual CO2 emissions. The UN Framework Convention on Climate Change highlights that Africa has made a small historical contribution to the greenhouse gasses causing global warming. However, the UNFCCC also shows that Africa bears the greatest responsibility. bruntClimate change has negative effects.

“African countries on average are spending nine percent of their budgets, that means for every $100 that governments are spending, $9 is being removed right at the onset just for paying for climate change,” Adam told IPS. “Essentially, climate change is putting a tax on African countries that is higher relative to incomes in other countries.”

Adam says Africa has developed an energy transition program to boost energy security. Natural gas is used as a transition fuel because many countries don’t have access to the geothermal or hydropower that could also be used to generate baseload.

Through the African Union, African countries have adopted a common position Energy transition recognizes natural gas as a temporary source of energy. Oil and coal are being phased out, and allow for more investment in renewable energies, including solar and wind.

No to gas

The African Common Position on Energy Access and Transition proposed for adoption by African Heads of State and to be launched at COP27 in Egypt this year comes on the back of the European Union’s recent vote in favour of a new rule that will consider fossil gas and nuclear projects as “green”.

The African Group of Negotiators, (AGN), and the African civil society opposed the plan. They worry it would detract from Africa’s energy access and transition goals while locking the continent into fossil fuels for decades.

“Africa is blessed with abundant wind, solar, and other clean, renewable energies. African leaders should be maximising this potential and harnessing the abundant wind and sun, which will help boost energy access and tackle climate change,” said Mohamed Adow, Director of Power Shift Africa.

Lorraine Chiponda, Africa Coal Network Coordinator, said the acceleration of gas projects in Africa was another colonial and modern ‘Scramble and Partition of Africa’ among energy corporations and rich countries.

While Omar Elmawi, coordinator of #StopEACOP, commented, “Africa needs to wake up and stop behaving like (it’s) Europe’s petrol station and always looking at resolving their (developed nation’s) energy problems. It is time to think collectively about what’s best for the continent and its people. This is a continent ripe with renewable energy potential.”

IPS UN Bureau Report

Source: ipsnews

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