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Africa: Continent Told 'Stop Playing the Victim'

Kristin Palitza

12 November 2009

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Cape Town — Critics of carbon trading, a strategy meant to combat global warming, say the buying and selling of carbon credits is being exploited.

"CDM (the Kyoto Protocol's Clean Development Mechanism) was never meant to be a cash cow, but meant for developed countries to reduce their emissions.

"But this is now being abused. They changed the original intention of CDM. Now it's business against environment," lamented Margaret Mukahanana, permanent secretary of national resources management of the Zimbabwean Department of Environment.

Mukahanana was addressing delegates at the Carbon Markets Africa Conference, held Nov. 10 and 11 in Cape Town.

Largely non-industrialised countries in Africa have little opportunity to develop greenhouse gas reduction projects that can earn them carbon credits, she says: "There are no big CDM projects in Africa, because, apart from in South Africa, countries' emissions are so low. So what are you going to reduce? The only thing you can do is avoid future emissions."

Kyoto Protocol signatories have agreed to cap - and later reduce - their greenhouse gas emissions at specific levels, but carbon trading schemes allow polluters to exceed these quotas by buying carbon credits. The credits are generated by projects that reduce emissions, mainly in developing countries.

Critics like Mukahanana believe that the scheme is not actually reducing emissions, but rather providing a smokescreen for industry to continue polluting - but with a cleaner conscience.

According to World Bank, about 140 million carbon credits - each credit should represent a tonne of CO2 - have been issued by the United Nations since 2005, with only about 1.6 million credits issued for projects in Africa.

Unlike China, Brazil or India, few African countries have large-scale industrial projects that can introduce carbon reduction projects. As a result, many nations in Africa can only obtain carbon credits through preventing deforestation and similar initiatives, which are rewarded with temporary instead of permanent credits.

"But no developed nation is interested in buying temporary credits," complained Mukahanana. The only way for African countries to benefit more from CDM schemes, she said, is for the CDM Executive Board to make agricultural and land-use projects - of which there are plenty on the continent - eligible for carbon credits.

But the response of the CDM Executive Board, which manages the global carbon trade and reports to the countries who signed the Kyoto Protocol, strongly indicated that complaints like Mukahanana's will not be taken into consideration.

"(Countries) have to stop playing the victims here in Africa," said CDM Executive Board chair Lex de Jonge. "CDM is not easy. It's complex, and I acknowledge that there are quite some challenges. Most proposed projects never come to life. But that's just a reality of the business."

He explained that the rules that stipulate which type of projects qualify for carbon trading were strict to protect environmental integrity but conceded that "we try to make the regulatory environment as easy to navigate as possible".

To make it easier for Africa to enter the global carbon trading market, de Jonge recommended African countries should not try to reinvent the wheel by asking for agricultural carbon trading projects but rather duplicate profitable initiatives elsewhere.

"Don't start from scratch. Learn from well-working, existing projects," he said.

Other foreign experts showed more understanding, however.

"What is missing at the moment is to find viable projects because there is no viable baseline (amount of carbon emissions that developing countries produce) and can offset against," admitted Nikolaus Schulze, director of project finance of German carbon asset management firm First Climate.

But he believes that "although CDM has not held its promises in delivering from Africa, it has some future in this region", insisting that African countries can become players in the global carbon trading market if they develop CDM projects based on the demand from businesses in developed countries. "The first question has to be: where is the demand for buying the credits (a project earns)?"

One South African entrepreneur agreed with his European colleagues. "Africa needs to forge its own path in the market. We cannot rely entirely on United Nations agencies to deliver the climate change solutions we need," said Anton Cartwright, coordinator of the Cape Town-based Promoting Access to Carbon Equity (PACE) Centre. "We, in Africa, have to make the carbon market work for us."

If projects are credible and based on internationally approved carbon trading principles, they will attract investment, he believes, suggesting that African businesses focus on developing large-scale, renewable and long-term sustainable projects with big profit margins.

"It's no use to invest in something small-scale. You need to make it viable in terms of cost," Cartwright reckons.

In May, one such carbon trade project, developed for the South African Rugby Union, purchased a credit for 40 tonnes of CO2 saved by solar-powered stoves in Soweto, Johannesburg's biggest township, to offset its 2015/19 Rugby World Cup bid.

A solar-powered stove can save between one and two tonnes of CO2 a year. However, Cartwright noted that this credit was bought on the voluntary carbon market, which does not have to meet the same strict technical and verification requirements as the CDM market because it operates outside of the confines of the U.N. and government-backed schemes.

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