By Deogracias Benjamin Kalima, Lilongwe
Malawi has so far generated K300 million (US$150,000) through carbon trading. These earnings have been realized from the sale of approximately 75,000 carbon credits. The South East African country, recently leveraged projects under the Green Development Mechanism and the Reducing Emissions from Deforestation and Degradation in Developing Countries (REDD+) initiative.
According to Ministry of Natural Resources and Climate Change, the country in 2023 finalized the Malawi Carbon Regulatory Framework, a legislation designed to facilitate the implementation of carbon trading projects in the country and subsequently started reaping the fruits among which is the revenue from the carbon trading.
“Recently, we finalized the validation of the framework with various experts including those from the Carbon Market Initiative launched in the last quarter of 2023,” said Yusuf Nkungula who is the Secretary for Natural Resources and Climate Change.
He touted carbon credits as one of Malawi’s lifelines, a pathway for Malawi to generate much needed forex and simultaneously restore Malawi’s degraded forests.
Nkungula went on to disclose that Malawi’s potential value of its Carbon Credits is estimated at 19,882,395 metric tonnes per annum which translates into over US$600 million per annum which can assist the country to attain its developmental goals as it works towards the Malawi2063 which is a government blueprint for its dreams to be achieved by the year 2063.
Steve Makungwa, a member of Carbon Markets Initiative said it is time Malawi put its house in order and secure carbon financing through the use of renewable energy technologies and more efficient fuel systems.
“As a country, it is high time we work on our framework and other related issues so that we are able to attract carbon financing which can be used in the renewable energy and add some MegaWatts into the national electricity grid. It can also be used to provide clean and efficient cooking energy to people in urban areas,” he says.
Makungwa goes on to explain that lack of expertise in carbon financing severely puts the country at a disadvantage in maximizing income from carbon markets.
Concurring with Makungwa is the vice chancellor of the Malawi University of Business and Applied Sciences (MUBAS), Ishmael Kossamu who says Malawi has so far failed to tap into the resource of revenue due to its disorganization in the area.
“As a country, we do not have a robust and comprehensive legal framework that would guide the development and implementation of carbon marketing in Malawi.” Says Kossamu who is a professor in environmental management.
One of the organizations implementing a carbon project in the country is Total Landcare whose Project manager, Mphatso Thawe says through their Restore Africa Project in the northern district of Mzimba, landowners are being encouraged to plant and take care of the existing ones and other nature based resources from which they earn credits for the carbon stored on their property. The credits are purchased by corporations to offset their emissions.
The World Bank estimates Malawi can earn between US$25-70 million per year from its forest carbon. Malawi has over 1 million hectares of designated forests reserves including both exotic and indigenous trees while at the same time it possesses the same number of hectares of land under the wildlife conservation parks and reserves which can in turn be traded for carbon credits.
Carbon credits have long gained the status of an effective instrument in the fight against climate change, greenhouse emissions and pollution in general. Several countries have been in carbon trading for the past 15 years with encouraging results. The Kyoto Protocol which is an international agreement linked to the United Nations Framework Convention on Climate Change adopted in 1997, clearly outlines a number of steps to be taken in order to ensure carbon neutrality for the world. In incentivizing that process, now there are a number of countries which offer carbon credits for sale as an investment. A major benefit over simply having returns is actually decreasing the carbon liability in a simple way.
New Zealand, Japan and Australia, the USA and South Korea are the five leading carbon credits generating countries in the world. In Africa, Kenya and Nigeria respectively have taken a lead in carbon credit markets.
Climate finance for the African continent took a major turn recently with the launch of the African Carbon Market Initiative (ACMI) which has unlocked the continent’s carbon credit potential. The initiative seeks to make climate finance available for African countries which in turn could spur increased access to clean energy and sustainable development. ACMI aims to mobilize up to US$100 billion carbon credits per year by 2050.
The REDD+ framework was established by countries to protect forests as part of the Paris Agreement. It is aimed at limiting the global surface temperature rise to below 1.5 Celcius. The ‘+’ stands for additional forest-related activities that protect the climate, namely sustainable management of forests and the conservation and enhancement of forest carbon stocks. Under the framework with these REDD+ activities, developing countries can receive results –based payments for emission reductions when they reduce deforestation which serves as an incentive for their commitment and efforts.