Africa Needs Carbon Markets
Carbon markets have gained significant traction in recent years, with roughly 23% of global emissions now covered by some form of carbon pricing. But the global carbon market remains chaotic and volatile, and it largely leaves out Africa, without which global climate goals cannot be achieved.
NEW YORK – World leaders have mounted a resolute response to the war in Ukraine, the consequences of which are being felt far beyond the warzone. They must start showing the same resolve in the fight against climate change, which threatens to cause far greater damage. We already know what this demands: a shift to a net-zero or low-carbon economy, powered by renewable energy. Building effective carbon markets in which African countries are active participants would go a long way toward advancing this goal.
While Africa accounts for the smallest share of greenhouse-gas emissions globally, its fast-growing economies, bold development ambitions, and rapidly growing population mean that its energy use will drastically increase in the coming decades. Ensuring that the continent’s development trajectory aligns with a just energy transition is thus essential to achieving global climate goals.
It will be expensive. In Sub-Saharan Africa alone, the net-zero transition will cost an estimated $1.7 trillion by 2030. Official development assistance – which was in decline even before the COVID-19 pandemic put added pressure on donor-country budgets – simply cannot be expected to cover these costs. Innovative new climate finance is needed.