Earlier this week, Kenya unveiled its carbon trading rule book, setting a limit of 10 million tonnes on the emissions reductions it can sell internationally up to 2030. In effect, the country has an export quota on a rather unusual commodity.
Unlike traditional commodities such as tea, coffee, and cut flowers, carbon sales entail no customs barriers and no shipping; in fact, no physical commodity truly leaves the country. What changes hands is the right to claim that one tonne of greenhouse gases was kept out of the atmosphere.
Yet, that transaction can be just as consequential. And that is the reasoning of the government: that the country must not wake up, years from now, to discover that it sold to foreign entities emissions reductions it needed at home to meet its own international climate change obligations.
That rationale is based on the accounting rules of the 2015 Paris Agreement, which dictate that once a reduction achieved in one country is transferred to another country, the seller must strike it from its own books so it is not claimed twice. This essentially means that if Kenya sells a solar project's avoided tonne of carbon dioxide, it can no longer count it towards its own emissions reduction targets. Of course, the new cap only applies to those credits that carry government permission for international transfer and therefore affect Kenya’s ability to meet its own national targets.
In a world where Africa constantly grapples with lopsided trade terms, carbon trading has, for years, seemed to turn entirely on a financial question, namely: how much can the continent extract from its forests and renewable energy potential? Kenya’s export caps, however, present a more searching question: how much of a country’s potential to reduce emissions can it realistically afford to sell?
Put differently, once avoided emissions begin to carry consequences for a nation's climate accounts and international obligations, can they still be treated as ordinary commodities, or do they graduate to a scarce national resource, requiring more strategic considerations often applied to energy, minerals, food security and, even foreign exchange?
This is, in essence, a question of carbon sovereignty, i.e., the capacity to decide how much mitigation potential to sell abroad, how much to keep, what price reflects its true value, and who benefits in the end.
At the heart of this calculation is a simple economic fact. Not every tonne of emissions costs the same amount to eliminate. The cost of replacing a diesel generator with solar power, for example, may not equal that of decarbonising cement. The former simply requires replacing the fuel source and providing the necessary supporting infrastructure, while the latter calls for changing both the energy source and the fundamental chemical processes through which cement is produced.
In other words, while both actions may enter the climate books as one tonne of carbon dioxide equivalent, they may cost very different amounts to produce, and may also command different prices in the market. The biggest strategic risk for a country like Kenya, therefore, would be to uncritically offer for sale its cheapest tonnes now at prices that do not reflect their full value, only to discover later that meeting its own climate commitments requires far more expensive interventions.
Granted, Kenya expects international finance, technology and other forms of support to cover nearly four-fifths of the cost of meeting its present climate targets. Rather than dogmatically holding onto all the cheapest reductions, the sensible policy would, therefore, be to sell only where the transactions finance action that would otherwise not happen and brings enough money, technology and development value to justify what Kenya gives up.
Carbon trading, properly conceived, can be genuinely different. Different from the extraction of gold, cobalt, or rare earth that leaves a hole behind, a carbon transaction typically finances something tangible that stays behind, such as actual forests, cookstoves, solar installations, and so on.
But many analysts have rightly pointed out that carbon trading does not automatically escape the old extractive model simply because nothing physical leaves the country. If the emissions reductions are exaggerated, the contracts are unfair, or the communities feel excluded, financial value can still be extracted from African landscapes and ways of life while control and profit accumulate elsewhere.
Kenya's Climate Change (Carbon Markets) Regulations of 2024 require free, prior and informed consent, which must also be documented before any land-based projects can proceed. At least 40 per cent of revenue from such projects, and 25 per cent from cookstoves and similar technologies, must reach local communities and the recently-launched national registry must keep track of every credit issued.
Yet, the record on the ground has not been rosy, as the recent protests in Kajiado and the court cases targeting the Northern Kenya Grassland Carbon Project illustrate. The disruptions and investor hesitancy such controversies trigger demonstrate that public participation and community consent are not just constitutional imperatives, but they form the very economic foundation of a credible carbon market.
True carbon sovereignty must therefore include the country’s ability to protect its climate future, the public’s right to know how a scarce national allowance is distributed, and the community’s power to say no and be listened to.
Dr Ageyo is the Editor-in-Chief of the Nation Media Group. He holds a PhD in media studies with a focus on science and environment communication. [email protected]
