Carbon credits, a boon for Africa or a new mirage of green finance?

2023-12-05 11:17:35

Supervising the carbon credit market is one of the priorities on the COP 28 agenda. Because this green finance is supposed to reduce carbon emissions in the South, particularly in Africa, with the money of polluters in the North. , is increasingly controversial.

Its principle is attractive for Western companies. They thus green their reputation and sometimes their suddenly carbon neutral products thanks to these CO2 credits which they decide to acquire freely, according to their needs. Airlines even offer passengers the opportunity to erase the carbon footprint of their trip. From major luxury brands to coal mines, many have rushed into this market dominated by a few private operators.

In the absence of clearly established rules, this private market was developed by climate activists with solid business acumen. And not always very careful about the content of greenhouse gas reduction projects. This is where the problem lies: 90% of the compensation projects developed to protect tropical forests would be ineffective.

Ineffective

“Ghost” credits according to the very serious investigation published at the start of the year by the Guardian British with the help of climate experts. Under the fire of criticism, South Pole, the Swiss carbon offset giant, has just suspended its emblematic project for the conservation of the Kirabi forest in Zimbabwe. Its management was entirely delegated to a local businessman who made his fortune in tax havens, and he also admits to having no skills in decarbonization. The lightness of the controls is also pointed out. Verra, the largest certifier in the sector of this voluntary carbon credit market, is contested: its model tends to exaggerate the effects of reducing or capturing greenhouse gases and hardly provided for control.

In 2022, demand for carbon credits fell by 17% compared to 2021

And the trend is still downward this year. Companies are abandoning them not because they are criticized, but because they now prefer to tackle the reduction of their own carbon footprint. Good news for the climate, not necessarily for the countries of the South. Capital derived from carbon credits is a valuable source of financing. They have a real role to play in green finance. African countries are demanding. This is why they are hoping for concrete decisions in Dubai to facilitate the trading of carbon credits at the state level. Lee Whitethe former Minister of Forestry of Gabon for example, deplores his failure in the marketing of carbon credits that his country was one of the first in Africa to offer directly.

UAE Blue Carbon in pole position

Many African countries are in the process of delegating their carbon credits to the UAE company Blue Carbon. Blue Carbon is a newcomer to this market, with no recognized experience. But with ambitions and disproportionate means to get their hands on the jackpot of carbon credits associated with the African forest. Blue Carbon is in negotiations to obtain exclusive rights to the marketing of carbon credits associated with millions of hectares of tropical forest. Contracts are being negotiated with Zimbabwe, Liberia, Tanzania and Kenya. Not sure that States and the African forest will be the first beneficiaries.