The African Development Bank has announced its official membership in the African Carbon Markets Initiative (ACMI) as of 30 May. This strategic move is set to empower African countries and the private sector in securing additional resources to combat climate challenges effectively.
Dr. Kevin Kariuki, the Bank's Vice President for Power, Energy, Climate, and Green Growth, made the announcement during a round table at the 2024 Annual Meetings of the Bank Group, held in Nairobi, Kenya, from 27 to 31 May.
"I am pleased to announce that the African Development Bank is now an official member of the African Carbon Markets Initiative. Through this decision, the Bank is committed to establishing a mechanism to support carbon market initiatives across our continent," said Kariuki.
Kariuki highlighted the necessity of financial innovation and the immense potential of raising climate finance through carbon markets. He urged African countries to seize opportunities for trading carbon credits under the Paris Agreement's compliance markets, where prices for emission reductions are significantly higher than in voluntary markets.
The event, moderated by Anthony Nyong, Director of Climate Change and Green Growth at the African Development Bank, gathered ministers of finance and heads of international organizations. They shared ideas and experiences, providing recommendations on addressing challenges and leveraging opportunities in carbon markets for African countries.
Dr. Alexander Ampaabeng, Deputy Minister of Finance in Ghana, shared Ghana's experiences and policies in the carbon market, emphasizing the need for countries to enhance transparency through strategic investments in technologies. "Through digital monitoring, reporting, and verification, Africa will attract better carbon pricing," he noted.
Mr. Mze Abdou Mohamed Chanfiou, Minister of Finance of Comoros, emphasized the critical need for capacity building to help African countries, especially small island developing states (SIDS), embrace and capitalize on emerging innovations. "This will enhance knowledge and enable countries to unlock the benefits of these innovations and strategies," he added.
Mr. Simplex Banda, Malawi's Minister of Finance and Economic Affairs, described Malawi's unique approach to the carbon market through investments in renewable energy projects, enabling countries and corporations to gain carbon credits.
Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development Dr. Bärbel Kofler called for addressing the challenge of double counting and ensuring investments consider the effects on communities, human rights, and the environment. "We must maintain high ambitions globally in the standards we uphold in the carbon markets," she emphasized.
Dr. Hanan Morsy, Deputy Executive Secretary of the United Nations Economic Commission for Africa, highlighted the need for global regulations to standardize pricing and ensure sufficient compensation. She pointed out the disparity between voluntary and compliance market prices, which disadvantages African countries. She also recommended deploying more technologies to close gaps in data reliability and reporting.
Dr. Rebekah Shirley, Deputy Director for Africa at the World Resources Institute, underscored Africa's substantial contribution to carbon removal and the potential of carbon markets on the continent. She stressed the importance of Africa's active participation, representation, and engagement.
Dr. Julius Court, Chief Operating Officer of Conservation International, stressed the importance of strong regulations and revenue-sharing arrangements among governments, developers, and communities to benefit the entire value chain and turn opportunities into reality.
Aurelia Micko, Senior Advisor of Carbon Markets and Climate Finance at USAID, spoke on the need for integrity and transparency in carbon markets. She highlighted USAID's efforts in supporting the development of policies and frameworks on transparency, benefits-sharing, and using proceeds from carbon markets to finance countries' Nationally Determined Contributions.
William Asiko, Vice President for Africa at the Rockefeller Foundation, emphasized fostering an environment where African carbon credits are perceived as transparent and embody integrity.
The round table facilitated an exchange of ideas and experiences among participants, providing valuable recommendations for addressing challenges and leveraging opportunities in carbon markets across African countries.
