24 July 2012

Africa: Reaping From Carbon Credits

Photo: Fred Noy/UN Photo
A Sudanese farmer harvests sorghum.

Carbon credits have become big business as more affluent countries offset their pollution by reimbursing developing economies to launch clean energy projects and plant trees as well.

An unforeseen scenario, however, is that tackling climate change can also be of economic benefit to developing nations. According to the World Bank, the carbon market can earn poor nations more than $25 billion annually.

Furthermore, numerous companies also have the potential to earn carbon credits through reduction of emissions.

One of these is the Rwanda Natural Energy Project which purifies water using ultraviolet radiation by mainly targeting rural areas. The company operates in several sites across the country, among them, FAWE Girls School and Shyira in Gasabo District, Kigali.

According to Jean Ntazinda of Rwanda Environment Management Authority (REMA), the country counts various benefits from the carbon market.

"First, through such projects, the country demonstrates its role in combating climate change as a party to the Kyoto Protocol. Secondly, local people are introduced to new clean technologies that remain useful to them after the project's life-time," he explains.

Ntazinda observes that through such projects, jobs are created and thereby earning the country tax revenues. He adds that carbon projects also contribute to the protection of the environment by reducing carbon emissions and deforestation, combating soil erosion, among many others.

According to Rwanda Environment Management Authority (REMA), one carbon credit stands for one tonne of carbon dioxide. Credits are bought and converted into cash in accordance to the Kyoto protocol.

So far, the country has a total of three registered projects with another five in the pipeline. The latter have already reached the validation level.

Companies dealing with cooking stoves, domestic biogas and green charcoal can earn credits as can those involved in small-scale hydroelectricity, LED lighting, solar water heaters and water purification and industrial companies in the cement, bio-diesel and sugar sectors.

Kigali-based FAWE Girls, which has a student population of 800, serves as an example of a huge community that has access to purified water using clean technology without any carbon emissions.

In one of REMA's newsletters, Christina Barstow, on behalf of Manna Energy, the inventor of the technology, clean technology is different from the previous source of energy because earlier methods of purifying water posed health hazards, was time consuming yet it also emitted carbons.

Currently, tanks fitted with smart technology are connected to the solar panels erected on top of buildings beside water tanks. Using the solar energy, water is purified and directly flows to taps for use by the end user.

According to the United Nations Environmental Programme (UNEP), the low global carbon price may have made the carbon markets less attractive to African countries. Prior to the financial crisis projections, the projections of the price of a carbon credit was to range from €30-€40 per tonne of emissions by 2030, yet the crisis means that carbon credits are currently worth a meagre €4 per tonne.

The United Nations Environmental Programme (UNEP) in partnership with the World Agro-forestry Centre, last year, launched a scheme to calculate how much carbon trees and soils actually absorb and estimated that selling 100 million carbon credits would earn African economies an estimated $1.2 billion each year.

According to the Climate Action, which partners with UNEP, this year, a loan scheme and guidelines adopted at African Carbon Forum in Addis Ababa, Ethiopia are aimed at smoothing Africa's entry into the carbon market with East Africa set to play a leading role.

This is designed to allow more African countries to adopt the Clean Development Mechanism (CDM), introduced by the United Nations Framework Convention on Climate Change (UNFCCC), which involves implementing emissions reduction projects and earning carbon credits.

This has been adopted by many developing countries, but so far, Africa has been lagging behind as a result of lack of methodology. Of the registered 3,927 CDM projects across the world, only 84, which represent just over two percent, are in Africa.

In 2011, countries that are party to Kyoto Protocol met in Durban, South Africa, to discuss the international response to climate change.

The conference of parties (COP) is provided within the protocol with the aim of discussing the implementation of the protocol and the way forward on the United Nations Convention on Climate Change (UNFCCC). As party to the protocol, Rwanda strives to fulfill its responsibilities thus its presence on the carbon market.

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