Government has ordered the review of all carbon credit projects in the country, weeks after President Lazarus Chakwera announced the creation of a government agency to oversee the trade and marketing of the offsets in the country.
A carbon market is a trading system through which countries may buy or sell units of green gas emissions through carbon credits to meet national limits on emissions.
The pressure for this change comes from the concern that local African communities are not receiving optimal benefits from the offset industry.
Malawi’s announcement is the latest attempt by an African government to profit from the growing trade in offsets. Zimbabwe this year decreed that the state will get half the proceeds of any carbon credit programs while Kenya is putting in place regulation to oversee the trade.
Speaking to MIJ online, Michael Usi, Minister of tourism culture and wildlife said to address this issue it is important that all carbon dioxide offset deals made prior to the emergence of the regulatory agency should now be reconsidered and modified to justly include local people and authorities.
“Those projects which started a long time ago must be revisited,” Usi said.
However, Usi did not state a specific percentage to be allocated to the government, adding on the matter: “I do not want to commit to any percentage, but we will go for the highest possible.
Nonetheless, at the United Nations Climate Summit (COP 27) held last year in Egypt, Malawi president Lazarus Chakwera, told delegates that the nation has potential to produce five million carbon credits which could rake in $100 million and support close to 20 thousand jobs .
Chakwera also said the funds to be realized through generation of carbon credits would be used to improve lives of vulnerable Malawians through social protection programs.
Meanwhile, Macdonald Mafuta, secretary to the treasury has confirmed that the agency tasked to oversee the trade and marketing of carbon credits will organize an inventory to establish a national carbon registry.
Mafuta also disclosed that the agency will seek to find carbon credit opportunities as well as marketing and trading the securities and has hired Switzerland’s Klik Foundation to assist in assessing carbon opportunities.
A single carbon credit represents a ton of climate-warming carbon dioxide or its equivalent that’s either removed or prevented from entering the atmosphere.
The credits are bought by companies to offset their greenhouse gas emissions as tighter legislation forces them to do more to slow global warming.
The demand for CO2 offset services is on the rise as governments around the globe impose requirements on industries for preventing or removing harmful emissions generated by business operations.
As a result, more and more carbon-cutting solutions emerge, and the global trade in carbon offsets is projected to grow to as much as $1 trillion within 15 years from $2 billion now, according to estimates from BloombergNEF.
Meanwhile several African countries, including Kenya, Nigeria, Gabon and Togo have committed to boost production of carbon credits following the launch of the Africa carbon markets initiative at COP 27.
The initiative aims to encourage production of 300 million carbon credits annually across the continent by 2030 as means for unlocking billions of climate finance.
