The African Climate Summit has recorded huge pledges amounting to hundreds of millions of dollars to boost the continent’s carbon credits production by 2030.
Africa’s carbon credit initiative, called Africa Carbon Markets Initiative, received millions of dollars in pledges after Kenya President William Ruto, opened the continent’s first climate summit on Monday.
Among deals from other investors, United Arab Emirates (UAE) pledged to purchase $450 million of carbon credits from the ACMI, which was launched at the COP27 summit in Egypt last year.
Kenya’s President William Ruto has proposed the introduction of a Carbon Tax as a way of cushioning the effects of climate change, which often impacts heavily on the finances of the government.
President Ruto told delegates, “We must see in green growth, not just a climate imperative but also a fountain of multi-billion dollar economic opportunities that Africa and the world is primed to capitalise.”
African leaders at the summit are promoting market-based funding tools like carbon offsets and credits, which can be produced by projects that reduce emissions, typically in developing nations, such planting trees or switching to cleaner fuels.
Companies can then purchase carbon credits to make up for the emissions they are unable to reduce through their own activities, aiding in the achievement of climate goals. One credit is equal to one ton of carbon dioxide avoided or saved.
The organisers of the three-day summit claim that their goal is to promote Africa as a location for climate investment as opposed to an area that frequently experiences floods, droughts, and hunger.
Carbon credits and other market-based financing tools are crucial in the eyes of African governments to raise money that has been slow to come in from wealthy donors.
In January, Shell and Boston Consulting Group predicted that the market for offsets, which had a value of around $2 billion in 2021, might grow to between $10 billion and $40 billion by 2030.
Several speakers at the summit affirmed that little progress had been made in speeding climate financing, considering the nature of hazard caused by climate change in the region’
According to a research released by the non-profit Climate Policy Initiative last year, Africa has only received approximately 12% of the funding it needs to deal with the effects of climate change.
A United Nations climate adviser and former trade minister in Botswana, Bogolo Kenewendo, said, “There hasn’t been any success for an African country in attracting climate finance.”
An African Development Bank Vice-President, Kevin Kariuki, told reporters that the deals announced on Monday were “very welcome” but inadequate.
He added that African states would push further for the expansion of special drawing rights at the COP28 U.N. climate summit in Dubai, at the end of November,
It is believed that if unlocked, the $500 billion worth of climate finance at the International Monetary Fund (IMF) could be leveraged up to five times.
More than 20 presidents and heads of government are expected to attend the summit from Tuesday. They plan to issue a declaration outlining Africa’s position ahead of a U.N. climate conference later this month and the COP28.
The summit seeks to discuss strategies to fund Africa’s environmental priorities and showcase the continent as the primary destination for climate investment, not as a victim of drought, floods, and famine.
According to U.N. statistics, African countries contribute only roughly 3% of carbon emissions across the globe but are on the receiving end of climate change through the impacts of extreme weather.