Zim eyes revenue from carbon credits, to monitor trading
ZIMBABWEAN Government has come up with a carbon credit framework that will see it collecting 50 percent of revenue from the sale of climate mitigation securities.
A carbon credit is a permit that represents the removal of carbon dioxide from the atmosphere and can be purchased by an individual or a company to offset emissions resulting from their industrial production processes, delivery vehicles, or travel.
For every tonne of avoided greenhouse emissions, the project owner receives credits, which can be sold to firms with a voluntary or compliance carbon reduction strategy.
While carbon credits are often created through forestry practices, a credit can be made by nearly any project that reduces, avoids, destroys, or captures emissions.
Information, Publicity and Broadcasting Services, Monica Mutsvangwa, told a post-cabinet briefing on Tuesday that the Government, using the proposed National Carbon Credit Registry, shall monitor all the movements and sale of carbon credits generated within its jurisdiction.
Incomes from the carbon credit will be deposited into the National Climate Fund and channeled towards funding climate-friendly projects.
Revenue to local investors has been capped at 30 percent while foreign investors will be entitled to at least 20 percent.
“The increasing occurrence of natural calamities such as cyclones, floods, drought and wildfires in some parts of the world is universally acknowledged to emanate from the relentless emission of dangerous gases,” Minister Mutsvangwa said.
“Accordingly, the Carbon Credit Framework for Zimbabwe seeks to enhance Zimbabwe’s role in reducing Green House Gas emissions, mobilise climate change finance and increase technology development and transfer from the compliance and voluntary carbon markets. The framework aims to ensure integrity, accountability and transparency in carbon trading and provide guidance on sharing of proceeds.”
Minister Mutsvangwa said there are additional co-benefits associated with carbon trading, including biodiversity protection; prevention of pollution; public- health and education improvements; and job creation. Initiatives and activities which individuals, companies and the government can implement to earn carbon credits include reforestation, use of renewable and alternative energy, promotion of the use of minerals that form components of green energy products such as lithium and implementation of climate-smart agricultural practices, including conservation farming, soils reconditioning and renewable energy use.
Other projects that are eligible to earn carbon credit are waste management in managed landfills; waste-to-energy projects and processing of waste from agriculture into products, including composting; and fuel blending initiatives such as bioethanol, or biodiesel which produce less carbon-intensive petrol or diesel.
The funds from the National Climate Change Fund would be utilised as follows: Climate change adaptation by local communities, 15 percent; investment in low carbon development projects, 10 percent, regulatory and Local authority levies, 5 percent; administrative costs and capacity enhancement of the Designated
National Authority, Registry, Carbon Trade Committee and Cabinet Committee on Climate Finance, 5 percent; and Treasury Value Added Tax requirements, 15 percent.
Climate, Tourism and Hospitality Industry, through the Climate Change Management Department, will now be effectively empowered to serve as the Designated National Authority (DNA) on carbon trading and the creation of a Carbon Trade Committee, and no entity, including local authorities, is allowed to enter into Carbon Credit Agreements with international agencies or organizations without the approval of the Government, said Minister Mutsvangwa. Some climate change experts, however, said while having a local entity mandated to issue carbon credits was a noble idea, the high costs involved in engaging international institutions and achieving global recognition might be very difficult.
The Kariba Project in Zimbabwe, operated by the carbon finance group South Pole, is one of the world’s largest REDD+ forest protection projects. The project has come under heavy criticism for allegedly overestimating the quantity of avoided emissions.
The project area measuring 785 000 hectares of forest consisting of woodland and open woodland) spans four Zimbabwean provinces: Matabeleland North, Midlands, Mashonaland West and Central. The project is community-based and consists of the implementation of activities in conjunction with locals and is administered by four Rural District Councils: Binga, Nyaminyami, Hurungwe and Mbire.