Kenya’s carbon market ambitions: Opportunities and controversies
The Gazi Women Mangrove Boardwalk Project at Gazi in Kwale County which is helping the community by using carbon credit sales to support other beneficial projects.
What you need to know:
- The country, which hosts more than 400 carbon credit projects, is positioning itself as Africa’s carbon credit hub, leveraging its natural assets and policies to attract climate finance.
Countries around the world are grappling with how to tackle the climate crisis against the backdrop of a warming planet and extreme weather events that are upending lives.
And, ideas abound. The UK, for instance, is researching a model that involves spraying particles into the atmosphere that would scatter sunlight back into space, among other climate intervention approaches.
Meanwhile, Kenya is betting on a different approach that is as controversial as it is uniquely appealing. It’s a system where wealthy nations and big corporations, often major polluters, pay Kenya through various organisations and entities to protect its forests, plant trees, or adopt clean energy initiatives — all to reduce planet-heating pollution.
In climate circles, this financial exchange has a name: carbon credits.
For two days, under the leadership of the Ministry of Environment and the climate envoy, hundreds of individuals huddled at a Nairobi hotel for a carbon markets conference with the theme “Delivering on Carbon Finance”. The central message: Kenya is ripe for green investments and is positioning itself as Africa's premier hub for carbon credit projects and their associated markets.
According to Mr Ali Mohammed, Kenya's Special Envoy for Climate Change, the country currently hosts more than 400 carbon credit projects. He further highlighted Kenya's continent-leading status, noting that 25 per cent of all African carbon credit projects are located within the country." “And we can say so while creating new businesses, new jobs and improved and resilient livelihoods.”
In a nutshell, this is how this system works:
Imagine a large factory in a wealthy nation that produces a lot of planet-heating gases. Now, imagine a community in Kenya that decides to protect a vast forest, preventing it from being cut down, or starts a new project to bring solar cookstoves to homes, reducing the need to cut trees for firewood. These actions prevent carbon from going into the atmosphere.
For every tonne of carbon saved or removed by the Kenyan community's efforts, they generate what's called a “carbon credit.”
This credit is like a certificate, proving that a specific amount of pollution was avoided, thanks to their actions.
These carbon credits can then be bought and sold in global carbon markets. So, the polluting company can buy these credits from the Kenyan community. For the company, buying the credit helps them meet their pollution reduction goals, while for the Kenyan community, selling the credit brings in money.
For Kenya, it is both an environmental miracle and a financial windfall. To understand where this is coming from, you have to go back to 1997. It was then, in Kyoto, Japan, that countries came together for a big meeting on climate change. Recognising that some countries had built their wealth through heavy pollution, while others had vast natural areas that naturally cleaned the air, they introduced a mechanism that gave countries the leeway to buy and sell rights to emit carbon.
This led to the birth of carbon credits, essentially certificates representing a tonne of carbon dioxide that has been prevented from reaching the atmosphere or removed from it. The goal was to give richer, more industrialised countries a flexible way to meet their emission reduction targets, while providing a financial incentive for developing nations to protect their environment and invest in clean energy.
Also read: Saudi Arabia to buy carbon credits from Kenya at $8 per tonne against recommended price of $80
Fast forward to today, and the global carbon market is a complex, ever-evolving landscape. In 2021, during the Conference of Parties (COP) climate talks in Glasgow, Scotland, broad frameworks for carbon markets were agreed upon. Like the name suggests, the carbon market is a platform where carbon credits are bought and sold.
Last year in Baku, Azerbaijan, where thousands gathered for COP29, rules for the global carbon market (including bilateral country-to-country trading) were made.
Key to Kenya’s climate ambition is its carbon market strategy, aiming to cut greenhouse gas emissions by 32 per cent by 2030. For African nations as a whole, carbon markets are emerging as a critical path to global climate finance.
The underlying principle is to make environmental protection profitable. This means monetising actions like tree planting, forest preservation, or adopting solar power, turning them into valuable, tradable credits. For governments, this opens doors to foreign investment and the growth of green economies. For communities, it promises jobs, better infrastructure, and direct financial rewards for their environmental efforts.
“We have worked closely with our stakeholders to develop and refine our policies, streamline the regulatory processes, and strive to ensure Kenya remains a leader in carbon markets. In our pursuit to remain a leader in climate action, Kenya signed its first bilateral agreement under Article 6 of the Paris Agreement with the Swiss Confederation, a second major strategy to advance Switzerland on the margins of the Besser-Stockholm-Rotterdam Convention Conference,” explained the climate envoy lead.
The rush for carbon credits is reshaping the global conversation around climate action, but not without its share of controversy. The surge in demand for credits has sparked a wave of protests, exposing glaring gaps in the industry.
When Climate Action published a video explainer on carbon credits, questions came in real quick. One asked, Who are the real winners in the carbon credit industry? Why are governments so quick to endorse projects that benefit foreign investors and large corporations, yet leave local communities with little more than empty promises?
Another wanted to know why polluters are being allowed to continue destroying the environment and outsourcing the burden to countries that are already facing the impacts of climate change.
On platform X, another posed: Are these projects a true solution to climate change, or do they simply serve as a convenient way for the rich to cash in on the planet’s environmental resources?
In just two months, Climate Action has reported two major protests where local communities decried being sidelined in the process
In May 2024, Kenya gazetted a carbon framework that regulates the sector.
The National Environmental Management Authority (Nema) is the designated national authority that oversees the development and implementation of carbon projects.
Sign or not
“So, therefore, if a person is signing up to the agreement, they ought to be informed, and you have to do that informing. You have to inform them what you intend to do so that they can make a decision, which is based on information, whether to sign up to the agreement or not. They don't need to sign; it is an optional decision which they have to make, based on the information that you will share with them, as transparently and as inclusively as possible,” Dr Anne Omambia, deputy director Programmes and Partnerships at Nema, said at the conference.
Mr Ali said that Kenya alongside Singapore and the U, are launching a government-led coalition that will be signed during the London climate action week scheduled for next month “to unlock demand and scale the highly technical use of carbon credits by 2030 and beyond.
While the proponents believe in the potential for carbon markets, not everyone is convinced that the markets are a silver bullet. Many civil society groups have raised concerns about how projects are implemented, how benefits are shared, and who profits. Others warn that heavy reliance on offsets could allow major polluters to delay actual emissions cuts — essentially paying to continue polluting elsewhere.
