Rwanda is set to launch its Carbon Market Framework on Saturday, December 2, at the 2023 UN Climate Change Conference - also known as COP28 - taking place in Dubai, United Arab Emirates (UAE) from November 30 through December 12.
The document will establish a governance and institutional structure to guide Rwanda's participation in the carbon markets, as well as a related pricing, and help the country to position itself well on the global carbon market.
COP stands for Conference of the Parties to United Nations Framework Convention on Climate Change (UNFCCC).
The national carbon market framework is one of more than 20 events that the Rwanda Pavilion will host at COP28, according to the Ministry of Environment.
"We look forward to welcoming visitors from around the world to share Rwanda's experience and learn from one another," the Ministry stated on X, formerly Twitter.
The Rwanda Pavilion will host 20+ events over two weeks at #COP28. We look forward to welcoming visitors from around the world to share Rwanda's experience and learn from one another. Check out the programme of events#GreenRwanda I #InvestInRwanda pic.twitter.com/VJsn3rGLtv-- Ministry of Environment - Rwanda (@EnvironmentRw) December 1, 2023
Carbon markets are trading systems in which carbon credits are sold and bought. Companies or individuals can use carbon markets to compensate for their greenhouse gas emissions by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions, according to the United Nations Development Programme (UNDP).
One tradable carbon credit equals one tonne of carbon dioxide (CO2), or the equivalent amount of a different greenhouse gas reduced, sequestered (absorbed), or avoided. When a credit is used to reduce, sequester, or avoid emissions, it becomes an offset and is no longer tradable.
On August 1, the Minister of Environment, Jeanne d'Arc Mujawamariya, said the country was, at national level, finalising an assessment of the carbon sequestration capacity of its forests and various green projects such as clean cooking technologies, which it could offer as carbon credits, indicating that the carbon market presents a huge opportunity.
She pointed out that there are entities that want to buy carbon credits from Rwanda, with some waiting for the country to publish its national carbon framework so that they start engaging with it in that regard.
The framework, she said, would help the country to set prices for carbon credits.
"We will set prices so that we are not on the losing end in terms of pricing," she said, noting that there is a country in Africa that sold a tonne [of carbon credit] for $8, which is a low price.
Showcasing Rwanda's Green Taxonomy
Again, on December 2, Rwanda is also set to showcase its Green Taxonomy. A green taxonomy is a classification system for defining what can be called environmentally sustainable investments - to determine whether an investment is sustainable or not.
According to the World Bank, a green taxonomy identifies the activities or investments that deliver on environmental objectives, helping drive capital more efficiently toward priority environmentally sustainable projects. The guide can support banks and other financial institutions to create and structure green banking products (such as loans, credits, and guarantees). It can also help investors identify opportunities that comply with sustainability criteria for impact investments.
Some other events
Other events that Rwanda Pavillon will host include The Climate Impact of Plastic Production - The Road to a Global Plastic Treaty; and Rwanda's Climate Finance Partnership: From Paris Summit to COP28, which is expected to be held on December 3.
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Another session due on the same day is Scaling Domestic Resources for Adaptation and Resilience.
On December 4, there will be three including an investor roundtable.
On December 6, there will be an event titled "Wetlands and Urban Climate Resilience: Rwanda's Urban Development Project," while "Scaling Article 6 Investment in Africa: Rwanda as a Proof-of-Concept Nation" is due on December 8.
Article 6 of the Paris Agreement allows countries to voluntarily cooperate with each other to achieve emission reduction targets set out in their nationally determined contributions (NDCs) - climate action plans to cut emissions and adapt to climate impacts.
This means that, under Article 6, a country (or countries) will be able to transfer carbon credits earned from the reduction of greenhouse gases (GHG) emissions to support one or more countries meet climate targets. The article creates the basis for trading in GHG emission reductions (or "mitigation outcomes") across countries.
