Individuals and communities will soon claim a fair stake in multi-billion shilling carbon trading business if a proposed Bill before the National Assembly sails through.
The Carbon Credit Trading and Benefit Sharing Bill, 2023 sponsored by Laisamis MP Joseph Lekuton seeks to ensure fair and equitable sharing of benefits among stakeholders while promoting development of carbon credit trading sector in Kenya.
The Bill will establish the Carbon Credit Trading and Benefit Sharing Authority which will provide policy direction and guidance to both levels of governments on carbon credit trading business.
“The Authority will issue carbon trading permits to a person or a company that intends to carry carbon trading business in Kenya,” reads part of the bill.
In Northern Kenya, conservancies are increasingly moving away from tourism as their mainstay to now invest in carbon projects as a source of revenue.
On November 8, 2022, President William Ruto said the carbon credits market should benefit communities fighting the adverse effects of climate change.
Speaking in Sharm El-Sheikh, Egypt, during the launch of African Carbon Markets Initiative, Ruto noted that Kenya is already a leader in the generation of carbon credits in Africa, accounting for over 20 per cent of the continent’s volume.
Kenya has limited regulatory framework and lacks requisite laws which make carbon trading in the country an almost opaque undertaking.
The country lacks a clear framework for buying and selling carbon credits locally.
Kenya Private Sector Alliance (KEPSA) notes that despite its exemplary performance, Kenya is producing only a fraction of its total maximum annual potential.
KEPSA projects that Kenya can achieve 30 metric tons of carbon dioxide equivalent (30 MtCO2e) by 2030 which will generate Sh85 billion annually.
Kenya is not alone in lacking proper regulation for carbon trading. Most of the carbon credit markets in the developing world are unregulated by law. There are no agreed prices for carbon credits.
The Bill by Lekuton provides for the establishment of a regulatory framework for the trading of carbon credits and benefit sharing in carbon credit trading
The authority will also oversee registration and regulation of the carbon credit trading business; and establishment of the Carbon Credit Trading Tribunal.
It will also regulate and provide effective oversight over carbon credit trading business in Kenya.
“Permits fees of Sh100,000 will be paid by individuals intending to participate in carbon credit trading. The number of traders is assumed to be 1,000 in the first year, and will grow by 30 per cent annually,” the proposed legislation states.
Carbon credit is a tradable instrument which represents 1 metric tonne of carbon dioxide removed from the atmosphere.
Carbon credit trading is the process of buying or selling verified or certified carbon emissions, reductions, and removals in accordance with internationally recognised carbon credit standards.
