Malawi has generated a significant K150 million from carbon credit trading, leveraging projects under the Green Development Mechanism and the Reducing Emissions from Deforestation and Degradation (REDD+) programme. According to the Ministry of Natural Resources and Climate Change, this revenue stems from the sale of approximately 75,000 carbon credits, highlighting the country's potential in the emerging carbon market.
The Ministry's report, also featured in the Nico Asset Managers Monthly Economic Report for August, states that the government's green initiatives have produced a total of 1.5 million carbon credits. However, only a fraction has been sold, raising concerns about underutilization of this lucrative market. The government believes the carbon credit initiative could yield as much as $600 million (around K1.05 trillion) annually if properly developed.
Parliamentary Committee on Natural Resources and Climate Change chairperson Werani Chilenga expressed disappointment with the earnings, emphasizing that they fall short of the sector's true economic potential. He attributed this shortfall to the absence of a legal framework to regulate carbon trading, which he believes has deterred serious investment in the sector. "We are underutilizing the available opportunities," Chilenga stated. "We lack a Carbon Credit Act to govern the industry."
Will Coley, energy programme manager at Self Help Africa, echoed these concerns, stressing the importance of developing equitable carbon pricing schemes that benefit local communities affected by carbon projects. "Local communities should have a voice and receive a fair share of both financial and social benefits," he emphasized.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Vice-President Michael Usi, who also serves as Minister of Natural Resources and Climate Change, highlighted that the government has created an Article 6 Framework for International Carbon Market Engagement. This framework is essential for Malawi to participate effectively in the global carbon market, as outlined in the Climate Change Convention.
President Lazarus Chakwera previously identified carbon credits as a potential game changer for Malawi, offering a pathway to generate much-needed foreign exchange while restoring degraded forests. He noted that Malawi's forest reserves could generate an estimated 19.9 metric tonnes of carbon dioxide, valued at over $600 million, through international carbon offset programmes.
As Malawi takes these initial steps in carbon trading, the future remains promising yet challenging. Will the government establish the necessary legal frameworks to capitalize on this potential? And will local communities truly benefit from these initiatives? The world will be watching closely as Malawi navigates this crucial environmental and economic frontier.
