Tapping Carbon Market Opportunities in Africa

Denis Slieker, Managing Director of Face the Future, is in the business of creating projects which earn carbon credits and he believes that Africa is the perfect place to do business. “Everybody speaks about the carbon market but basically there are two carbon markets,” Slieker explains.  “First there is the compliance market which is set by the UN.  In this market, companies and countries have an obligation to reduce their carbon emissions.  Part of their reduction activities can be the purchase of carbon credits.  The other side of the market is called the voluntary carbon market.  There you can find buyers, which can be private people or companies that want to offset the carbon emissions that they cause.”

These two markets can work in harmony and one example of this is in stopping deforestation.  Within the UN, there have been several talks about stopping global deforestation, though so far they have been unsuccessful.   On a global level, there is no formal law that prevents it.  In the voluntary carbon market, however, there are certified projects that work against deforestation.

The voluntary market acts as a place where new projects and ideas can be developed with the hope that they will one day be incorporated into the compliance market.  “In that way, they (both markets) are linked and they do both play a significant role,” says Slieker.  “If you look at the size of that (voluntary) market, I think the voluntary market has been around for 10 years, and every year it has doubled in size.  So, if that continues to double year in and year out for, the next decade, then it will definitely come to a significant volume.” However, if you compare it to the compliance market, in which countries and large corporations have to reduce their emissions and have to buy the carbon credits, it is easily dwarfed by the compliance market with a size at least 20 times more than the voluntary market.

In the voluntary market, once a project has been established and the activities (planting trees, maintaining them, etc.) are carried out, mostly by local communities, it can be certified under a carbon center and start to generate carbon credits.  These credits can then be sold to individuals and companies who want to offset the emissions that they create.  With the income, community projects can grow and create more jobs. 

Slieker has been working on a project in Uganda which employs up to 400 people from local communities.  “We’re talking about an additional revenue stream coming from Western individuals and organizations that cause carbon emissions, and that stream is going in to third world countries or developing countries… It mitigates climate change, it strengthens bio diversity, and it creates a significant amount of employment.”

Slieker says that the only obstacle preventing this from becoming a major industry in Africa, where there is ample room and perfect conditions, is that not enough people are aware of the opportunity.  “There is a true need to bring knowledge into African society, as soon as possible, so they can actually start working on the market themselves – start developing projects and start to become an equal player in all of the financial transactions that take place in this market.  This something that really needs to be paid attention to, projects need to be established in the field by local organizations and the local people.” 

As inclusive growth and climate change are two major issues facing Africa, developing projects of this nature serve as one vehicle to help Africa push back against these challenges for themselves but also place Africa as a key center to guard and preserve the air we all breathe.

By Editorial team Afribiz.net.

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