(Bloomberg) -- Zimbabwe is rushing to ready itself for a new era of carbon trading under a United Nations framework that allows countries to buy and sell carbon credits from each other, as well as companies, to help meet their climate goals.
The government has started developing its policies and will finalize the Article 6 Policy Framework and Carbon Strategy at the end of the year in time for integration with its planned Climate Change Management Bill, Sithembiso Nyoni, the environment minister told reporters Thursday in the capital, Harare.
Article 6 of the Paris Agreement, a legally binding international treaty on climate change adopted in 2015, requires the keeping of a national emissions ledger in which every carbon credit exported will needed to be logged in order to prevent two countries using the same unit. While a general framework was finalized at the COP26 international climate summit in 2021 and a number of countries have begun to strike deals, the detailed rules are yet to be finalized and many developing countries still lack the infrastructure to implement the market.
“Zimbabwe hopes to attain full Article 6 readiness in the first half of 2025,” the minister said. Zimbabwe “would like to provide reassurance that all projects both new and existing will benefit from an improved regulatory environment.”
Zimbabwe, like a number of other African countries, is seeking to regulate the production and sale of carbon credits to garner a greater share of the revenue generated for the government and the communities where the projects are situated. The southern African nation is the third-biggest producer of carbon credits on the continent, accounting for about an eighth of Africa’s production, RippleNami Inc., a California-based data company, said last year.
A single carbon credit represents a ton of carbon dioxide or its equivalent either removed from the atmosphere or prevented from entering it in the first place. Those securities are bought by producers of the climate-warming gases who want to offset their emissions.
Zimbabwe wants to give carbon credit projects in the country, many of which are based on carbon-absorbing forestry projects, the option of selling into the new Article 6 market, a quasi-compliance market through which polluting countries can buy emissions savings achieved elsewhere in other to meet their national climate targets. Currently the projects operate in the voluntary market, which is subject to less oversight.
Zimbabwe wants to give carbon credit projects in the country, many of which-are based on carbon-absorbing forestry projects, the option of selling into the so-called compliance market, which is regulated by Article 6 and is based on the limits to the amount of greenhouse gases nations can emit. Currently they operate in the voluntary market, which is subject to fewer regulations.
Last August, Zimbabwe adopted a law which allow the state to take as much as 30% of carbon-credit revenue for the first 10-years of a project, with the balance going to developers, who are required to invest a quarter of their earnings in community projects. Some of the revenue going to the government will be channeled into a climate fund meant to fight the impact of global warming.
The country is reeling from the impact of an El Nino induced drought which cut corn production by about 70%, drained a lake that supplies the country’s biggest power plant and led to the declaration of state of disaster.
The industry in Zimbabwe has been dogged by controversy. Last year one of the world’s biggest carbon-offset programs, Kariba, emerged as one of the most controversial projects in the market for carbon offsets. Carbon Green Investments, its owner, lost its contract with South Pole, one of the world’s biggest sellers of carbon credits, following a string of investigations pointing to misleading claims of Kariba’s climate impact.
--With assistance from Desmond Kumbuka.
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