Yes, you can trade in carbon credits
Natasha Otolo is a programme officer and carbon finance expert at Hivos East Africa. She spoke to Leopold Obi on how small farmers can tap into greenhouse gases reduction efforts
Let’s begin from the basics, what is carbon credit?
Let’s begin from the basics, what is carbon credit?
Carbon credit, also known as carbon offset, is a tradable certificate issued per tonne of carbon dioxide or carbon dioxide-equivalent greenhouse gases reduced from the atmosphere from an emission reduction project.
The certificate has a value and it is sold in a market.
Using the case of biogas for instance, it displaces the use of firewood or charcoal which are notorious emitters of carbon dioxide.
Once those emission reduction calculations are verified by the United Nations Framework Convention on Climate Change — an accredited validation and verification body — they are reviewed by a third party certifier, then the emission reductions are issued with carbon credits, which can be sold in carbon markets to companies, individuals or countries wishing to offset their own emissions.
How can farmers get involved in carbon trading?
The essence is to have an initiative or project that has emission reductions outcomes. Beyond that, I would recommend getting in touch with consultancy firms or other organisations that are experts at determining the feasibility of the project as being a carbon offset initiative.
They can then advise on how to get into the carbon trading schemes. The key thing is whether there are emission reductions taking place, the scale of the project, the resources available to the project developer, the cost of the design and implementation of the carbon programme and under which mechanism the carbon credits will be developed.
Does carbon credit trading only apply to those in agroforestry?
No, as long as there is emission reduction taking place, that project is eligible for carbon credits. This can range from renewable energy such as use of solar or wind power, use of water purification systems, displacement of use of firewood or charcoal and a host of other emission reduction initiatives.
Are there misconceptions about carbon trading?
The intention of any carbon programme is to ensure that an offset project is sustainable in its lifetime by offering revenue streams (carbon finance) to allow this to happen.
The objective is not necessarily to provide extra profits for the organisation or the individual who owns the programme.
Sustainability has to be demonstrated and also socio-economic benefits to the people living within the project boundary.
Therefore, I personally don’t classify it as a moneymaking scheme, but as a way to create social change in a sustainable way.
How are carbon credits traded and where is the market?
The carbon market is simply an environment where there is a buyer and seller and a commodity (carbon credits).
Project developers have two options in trading carbon credits — either they use a broker who will link them to a buyer and a seller of carbon credits at a commission, or a project developer can use a reseller, who will essentially buy the carbon credits from the project developer and resell them at a price of their choice.
What is the value of participating in this kind of initiative?
As stated earlier, this is a very good revenue stream to ensure sustainability of green projects. At the socio-economic level, these programmes have a key emphasis on sustainable development benefits such as creation of employment, training in green jobs and reduction of indoor air pollution (health benefits), among others.
How far is Kenya in developing policies to guide carbon trading?
A lot of groundwork has gone into developing a conducive policy framework for climate action in Kenya. Key of these is the Kenya National Policy on Climate Finance Draft, Kenya’s Nationally Determined Contribution and National Climate Change Action Plan II (2018-2022) that have set mitigation objectives of emission reduction goals.
A lot of work is also going into greenhouse gas accounting by training of local experts. However, the mere fact that all this work has gone into developing frameworks around mitigation means that there is huge potential in moving into carbon trading schemes.
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