Carbon Credit Boom: Climate Opportunity or Unequal Exchange for Kenya

Kenya has also been a fast-tracking country in the carbon markets, receiving the climate finance around the world through the rangeland conservation, the rangeland better cookstove programmes and forestry programmes.

The world bank has reported that Kenya is one of the most prolific players in the voluntary carbon market in Africa taking advantage of its natural ecosystems and community-based land systems to produce carbon credits.

Ranging across the pastoral lands of northern Kenya to community forests and poor families, carbon finance is now being seen as one of the avenues to sustainable development.

But with the rise in the sector, there is increasing concern about equity, transparency and benefits distribution.

In Kenya, foreign investors and international developers usually fund and develop large scale carbon projects which have direct access to the global voluntary carbon markets.

In rangeland projects in counties like Marsabit, Samburu, Isiolo and Laikipia, pastoralists sell large parcels of land to conservation-based land-use activities.

According to a study conducted by the International Institute as regards Environment and Development, although these projects rake in large amounts of tradable carbon credits, which are usually sold to multinational companies, the local populations usually obtain minimal annual payments, local community infrastructure, or temporary jobs.

Such benefits often do not represent the long-term economic worth of carbon assets of communal land.

The same trends are present in enhanced cookstove programmes. These projects also lower the emissions of the traditional biomass cooking and they are well favoured by the international climate finance.

According to the Clean Cooking Alliance, most of the carbon profit is received by the project developers and credit purchasers, even though the households would enjoy the benefit of consuming less fuel and having better health status.

Carbon pricing, revenue flows and benefit-sharing structures are not usually visible to end users and this serves to reinforce the position of end users as passive beneficiaries and not active stakeholders.

Carbon projects based on forestry have other complexities. Long-term afforestation and reforestation treaties- especially in important ecosystems like the water towers of Kenya can provide decades of land-use limitations.

The United Nations Environment Programme argues that these projects may produce trade-offs in conservation objectives and local livelihoods in case they are not appropriately designed.

In the case of community landowners, these contracts can restrict economic opportunities in the future and these opportunity costs will only be realised in the future.

The biggest issue of these obstacles lies in an unequal bargaining power. The land systems in Kenya tend to be poorly supported in both law and technical, whereas carbon contracts are long-run, intricate and business-oriented.

The reforms to control carbon markets are established by the Government of Kenya Climate Change Act, which entails the registration of the project, community consent, and the structure of benefit sharing.

Nevertheless, as observed in policy examinations by the African Development Bank, enforcement ability and coordination among institutions is a major problem, especially on initiatives implemented before regulatory structure.

The other important issue is transparency. There has been little public revelation regarding the carbon prices, the sharing of the revenues and the terms of contracts that have provided a perception that carbon trading can be another history of resource exploitation.

The Transparency International has pointed out that opaque systems of governance in the natural resource-related sectors can increase the chances of elite capture, exclusion and intra-community conflict risks, which equally apply in emerging carbon market.

In the case of pastoralists and community lands, these are particularly governing gaps.

Ineffective protective measures contribute to increment in marginalising the vulnerable groups such as women and youth and subject communities to long-term land-use risks and volatile carbon prices.

Carbon market in Kenya has the potential to be a real instrument of mitigation of climate change and sustainable development. But its long-term credibility will be based on accountability and fairness.

According to the United Nations Development Programme, the best carbon markets should provide the local communities with enforceable rights, access to free legal and financial consultations, clear revenue sharing policies, as well as with an effective say in the decisions.

Climate finance which fails to compensate or pay adequately local landowners can produce on-paper deliveries of emissions reductions, but will compromise equity and sustainability in reality.