Zambia Joins African Countries in Demanding a Share of Carbon Credit Profits
Zambia recently announced plans to regulate the sale of carbon credits and secure a portion of the proceeds for its own benefit. This follows similar moves by Zimbabwe and other African countries as they look to tighten control over the burgeoning carbon market.
Collins Nzovu, Zambia’s Minister of the Green Economy and Environment, highlighted revenue sharing as the main issue in this market. He expressed that Zambia would be satisfied with receiving 50% of the profits. The country intends to negotiate revenue-sharing deals on a case-by-case basis.
In May, Zimbabwe declared its intention to void previous deals between carbon credit program developers and local authorities. Under the new rules, 50% of the revenue from carbon credits will be payable to the treasury, with an additional 20% allocated to local investors. Kenya is also in the process of implementing regulations to govern the industry, while Malawi recently established an agency to oversee the trade and marketing of carbon offsets.
Carbon credits represent a unit of climate-warming carbon dioxide or its equivalent that has been removed or prevented from entering the atmosphere. These credits are bought by greenhouse gas producers to offset their emissions, with many countries imposing stricter legislation to combat global warming.
The global market for carbon offsets is currently valued at $2 billion and is projected to reach up to $1 trillion within the next 15 years, according to BloombergNEF.
Zimbabwe’s decision to enact new rules came after realizing that programs had been concluded with local municipalities or traditional rulers, known as chiefs, without significant revenue returning to the communities where the projects were located. Collins Nzovu affirms that Zambia has faced a similar situation.
Zambia is the fifth-largest producer of carbon credits in Africa, accounting for 6% of the continent’s output from its 60 projects and 0.7% of global production. The Parliament of Zambia plans to consider a climate change bill later this year and aims to strengthen industry regulations.
While Zambia intends to ensure a fair distribution of revenue between program developers and the government, Nzovu emphasizes that it is not their intention to discourage investors. They strive to strike a balance that makes the country an attractive investment destination.
Overall, African governments are increasingly demanding a share of the profits from carbon credits as the market continues to grow. These measures aim to ensure transparency, benefit local communities, and provide appropriate regulation for the industry.
