Carbon is life. It keeps us moving daily. We breathe and live it. From animal to human, ecosystem, and biodiversity, there can never be us, them, or they without carbon. However, when released into the atmosphere in excessive amounts as carbon dioxide (CO2), it traps heat, leading to climate change known as the "Greenhouse Effect".
Liberia, and other African nations that contribute less amount of CO2, are hugely impacted due to the change in the climate as a result of the excessive amount of CO2 flowing into the atmosphere as a result of burning fossil fuel, charcoal production, Cutting Down Trees, Transportation, and Industry and Manufacturing, which then result into sea level rise, extreme temperature coastal erosion,
As part of climate actions to address these impacts, countries annually submit their Nationally Determined Contribution targeting a specific sector to reduce greenhouse gas emissions. In their NDCs, countries communicate actions they will take to reduce their greenhouse gas emissions to reach the goals of the Paris Agreement. Countries also communicate in their NDCs the actions they will take to build resilience to adapt to the impacts of climate change.
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The Paris Agreement established a framework for climate finance, reaffirming that developed nations must lead in providing financial assistance to more vulnerable, less endowed countries. This finance is essential for a dual purpose: mitigation, which requires large-scale investment to significantly reduce global greenhouse gas emissions, and adaptation, which needs substantial resources to help countries build resilience, adjust to the adverse effects, and reduce the immediate impacts of climate change.
Money is hugely relevant for achieving the NDC target. Many countries, like Liberia, relied on aid from international governments to support climate action outlined in their NDCs; this is where the carbon market comes in.
A carbon market is a system that establishes a financial value for carbon emissions, turning the reduction of greenhouse gases into a tradable commodity (representing one ton of CO2 equivalent). These markets operate in two primary ways: Compliance Markets, often called Cap-and-Trade, are mandatory government-regulated systems that set an absolute cap on total emissions; companies that pollute less than their allocated limit can sell their surplus allowances to those that exceed their cap, creating a direct financial incentive for mitigation.
In contrast, Voluntary Carbon Markets (VCMs) allow corporations and individuals to freely purchase carbon offsets generated by specific projects (like reforestation or clean energy) to neutralize their own emissions and meet internal sustainability goals without a legal mandate.
The carbon market is now a recommendable solution to support NDCs and climate action. But there must be a law or policy to guide the sales and generation of carbon credits. That's why the Liberian government has drafted a policy that will lead the country into the global carbon market.
In this draft document, still undergoing consultation with civil society, donors, and partners, the Government of Liberia regulates and oversees all carbon-related activities and ensures equitable benefit-sharing among communities and all actors involved.
This policy positions the government to manage its natural resources as a sovereign asset for national development and climate resilience.
"So then who drives this?"
The Environmental Protection Agency (EPA) is designated as the statutory authority responsible for regulating and overseeing the approval and trade of all carbon credits. This position is backed by the EPA's 2003 Environmental Management Law, which grants the institution the responsibility for protecting and managing the environment. Also, the EPA is the National Designated Authority for the United Nations Framework Convention on Climate Change (UNFCCC) and other climate change-related activities in Liberia.
Additionally, the EPA is clothed with the responsibility of reporting to the UNFCCC on Liberia's contributions to climate change, including developing and reporting on the Nationally Determined Contribution (NDC).
Carbon credits generated as defined by the policy are known as Internationally Transferred Mitigation Outcomes (ITMOs), a mechanism defined under Article 6 of the Paris Agreement that allows for the cooperative achievement of NDCs
Financial Architecture and Transparency
To ensure financial transparency and management, the draft policy mandates the establishment of two key financial accounts: The Climate Fund Account, managed by the Ministry of Finance and Development Planning (MFDP) at the Central Bank of Liberia (CBL). This escrow account will serve as the primary transitory account for all proceeds from the trade of government-owned carbon credits. Crucially, it is established as separate from the Government of Liberia's General Revenue and Consolidated Account.
Dedicated Escrow Accounts: For projects generated on community or private land, revenue must be deposited into a separate, dedicated escrow account. This account requires signatories of beneficiaries.
All funds generated from the project will be deposited in the Climate Change Fund account
Here's how revenue would be shared
Benefit sharing is triggered by the medium and source through which carbon credits are generated. Both community /private individuals and the government will receive shares depending on the source of the credit and their roles.
for a Community or a privately owned source of credit
The community will receive 50%, the largest share, to support local-level projects, sustainable development initiatives, and climate resilience efforts.
For community projects, a detailed benefit framework must be established at the outset. The Project Developers (PD) will receive 30% as a reward for developing the project.
The National Climate Change Fund (NCCF) will receive 10% for government regulations. The Sector Management Fund (SMF) will get 5% to support the continuation, management, and oversight of the credit-generating sector (e.g., sustainable forest management, reforestation, and conservation). The payment goes to a dedicated account for the regulatory account.
For a Government-Owned source of credit
The National Contribution (NC) will get a 50% share, paid directly to a government-designated account to support social, educational, and health programs benefiting all Liberians, demonstrating a national return on natural assets. The Project Developers (PD) will receive 30% for their role in project development. Again, the Sector Management Fund (SMF) will get a 10% to ensure continued oversight of the credit-generating sector (e.g., sustainable forest management). The payment goes to a dedicated regulatory agency account. The Local Communities (LC), where the project was implemented, will receive 10%
Non-Market Approaches (Paris Agreement Article 6)
In line with the Paris Agreement's Article 6, the policy also addresses non-market approaches. These entail climate initiatives focusing on capacity building, livelihood, and financial assistance to collaboratively achieve the Nationally Determined Contribution.
The Government of Liberia's policy is that all non-market climate actions must be authorized and implemented in accordance with the country's NDC, climate change policy, and the ARREST Agenda for Inclusive Development (AAID). Where applicable, the institutional arrangement used for market approaches will be similarly utilized for non-market activities.
Social and Environmental Safeguards
Interventions contributing to Liberia's carbon agenda must align fully with the NDC and integrate principles of equity, transparency, and respect for local community rights.
- Community Rights: Adequate social safeguards, such as Free, Prior, and Informed Consent (FPIC) rules and guidelines, must be incorporated.
- Social Equity: Projects must mainstream gender issues and promote the rights of disadvantaged and minority groups.
- Livelihoods: While predominantly targeting emissions reduction, interventions must also be designed to address community livelihoods, cultural values, and traditional knowledge.
Before approval, the relevant government agency is responsible for ensuring these elements are built into the project design and are continuously monitored for adherence. A draft climate change law is also in development to complement the proposed policy.
Addressing Public Concerns
The development of the policy has faced concerns from civil society organizations regarding potential government overreach, particularly regarding community land rights and revenue control. While critics fear the government is undermining local property rights, the policy intends to mitigate confusion and chaos in the complex field of carbon markets by asserting centralized regulation and oversight, while guaranteeing significant and direct financial benefits (the 50% largest share) to communities and private owners.
More engagement ahead of the draft policy validation
On Friday, September 26, the National Climate Change Secretariat (NCCS) holds a gathering of a diverse group of stakeholders--including legal experts, civil society, and international partners--for a consultative forum. The goal was to solidify national support and gather input for the development of Liberia's crucial Carbon Policy and Law, a framework
Tinatua Kelvin Kollie, Consultant at the NCCS and EPA, said the meeting was meant to deepen the multistakeholder consultation to gauge the perspective of stakeholders on the draft carbon policy.
"As Liberia tread the path of a comprehensive policy, the views and aspirations of every Liberian and stakeholder are extremely important.".
Legal Experts Demand Urgent Action
A prominent voice at the forum was human rights lawyer and political leader, Cllr. Tiawan Saye Gongloe, who delivered a sobering warning. He cautioned that without robust new legislation to protect the country's remaining forests, Liberia faces the severe risk of desertification.
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Cllr. Gongloe criticized modern practices for disregarding the traditional wisdom that once effectively preserved nature through strong cultural beliefs. He emphasized that Liberia must revert to the wisdom of these traditions and strengthen them with modern legal frameworks to secure what forests remain in counties like Sinoe, Nimba, and Gbarpolu. He also suggested innovative preservation ideas, such as requiring recipients of agriculture loans to commit to planting trees.
Transparency and Direct Community Benefit are Crucial
Madam Elizabeth Gbah Johnson, Country Director for ActionAid Liberia, stressed that the success of the national carbon policy depends entirely on broad inclusivity, especially youth. She highlighted the need to actively involve women, persons with disabilities, and the private sector.
Madam Johnson cautioned against the use of middlemen in negotiations and warned that, based on ActionAid's research, most carbon projects collapse due to a lack of transparency and grassroots participation. She made it clear that "Communities cannot carry the burden of failed carbon projects they had no say in," and insisted that financial benefits must flow directly to them.
EPA Highlights Economic Potential
The government, represented by Christopher B. Kabah, EPA's Director of Planning and Policy, reinforced the economic necessity of the policy. He stated that the ongoing consultations demonstrate Liberia's readiness to leverage its forests as economic assets, positioning the country as a leader in sustainable development and green growth. Mr. Kabah affirmed that the finalized policy would align with the Paris Agreement, unlocking significant opportunities in the global carbon market.
Adding an international perspective, Dr. Annika Hillers, Country Director of the Wild Chimpanzee Foundation, urged Liberia to learn from neighboring nations like Sierra Leone and Ghana, where carbon policies have translated into real financial benefits for communities. She noted that putting the right policy in place could attract huge investment for the country's development.
The overwhelming consensus among all participants was that building a credible national carbon policy--anchored in strong legal backing, transparency, and community inclusion--is a shared national responsibility that will determine Liberia's sustainable and prosperous future.
