Zim set to start carbon credit trading
ZIMBABWE anticipates starting carbon trading within nine to 12 months, as it seeks to generate at least US$400 million annually from the climate securities, Environment, Climate and Wildlife Permanent Secretary Professor Prosper Matondi has said.
Since the establishment of a legal framework for regulating the carbon credit market, the Government has already received over 30 applications from project proponents.
The move aligns with the growing multi-billion-dollar global voluntary carbon offset market, where polluters of the atmosphere purchase credits from emission-reducing projects such as those on renewable energy or tree planting to compensate for their environmental hazards.
The regulations offer project developers 70 percent of revenue for the first 10 years, with the remaining 30 percent collected by the Government as an environmental levy.
The structure incentivises developers while ensuring a contribution to climate change initiatives.
Prior to implementation of the regulations, Zimbabwe’s carbon credits market was characterised by a significant presence of unregulated projects. This lack of oversight raised concerns about transparency, accountability and the overall effectiveness of these projects in achieving their intended environmental benefits.
This comes as a new World Bank report has outlined the significant financial burden the nation faces in tackling climate change.
The report, titled “Country Climate and Development Report”, estimates that the country will require a staggering US$14,8 billion by 2030 to adapt to the changing climatic conditions and mitigate further emissions growth.
Under current public investment levels, Zimbabwe faces a glaring funding gap of US$11 billion.
Prof Matondi expressed optimism about the progress made in registering carbon credits, highlighting the diverse range of sectors.
“We have seen significant progress in registering the projects and we should start trading in nine to 12 months,” he said.
He added that global capital had been difficult to access but carbon trading offered a promising avenue to bridge the funding gap faced by African countries, providing crucial resources for climate mitigation and adaptation projects.
Carbon trading, Prof Matondi said, presented a significant opportunity for African countries to address the climate crisis and secure resources for sustainable development.
The innovative approach allows Africa to actively participate in the global fight against climate change, while generating much-needed capital for crucial environmental projects.
The World Bank said the substantial funding shortfall for Zimbabwe necessitated a drastic increase in investment from various sources to bridge the gap and ensure adequate resources for climate action. The report noted the support must come from a diverse array of stakeholders, including the private sector, development partners and climate finance initiatives.
“Though the projected impacts of climate change are significant, there is limited scope to build more resilience or reduce emissions growth under the BAU (business as usual) scenario,” said the WB. “Flows of climate finance from global funds and other existing donors to Zimbabwe have also been low, a mere US$121 million between 2014 and 2018.”
Despite facing significant financial challenges, Zimbabwe has been prioritising climate change programmes to mitigate its impacts. The initiatives include revamping irrigation systems and adopting climate-smart farming techniques such as Pvumvudza/Intwasa.
The programme has been instrumental in boosting agricultural yields for the nation. In addition, Zimbabwe has established a legal framework for regulating the carbon credit market, marking another crucial step in its fight against climate change.
However, the limited budget seriously compromises Zimbabwe’s ability to invest in essential climate resilience measures such as large-scale land restoration projects, and low-carbon energy and transport infrastructure. These crucial investments are urgently needed to safeguard the country’s future and effectively address the challenges posed by climate change.
The report further details the adverse effect of the limited budget, highlighting its crippling impact on crucial aspects of Zimbabwe’s social fabric.
Due to the lack of sufficient resources, the growth of critical programmes — particularly those focusing on climate-smart social safety nets, education and healthcare — will be severely restricted. This would have a detrimental impact on the vulnerable populations that rely on these programmes for necessities, education and health services.
Climate-smart social safety nets play a
crucial role in protecting vulnerable communities from the adverse effects of climate change.
These programmes might include cash transfers, food assistance and livelihood diversification initiatives, all designed to help communities adapt to changing weather patterns, droughts and other climate-related shocks.
Similarly, education and healthcare programmes are essential for building resilience and empowering communities to cope with climate change.
Education allows individuals to understand and adapt to the changing environment, while access to quality healthcare is crucial for managing climate-related health risks, the bank said.
Addressing Zimbabwe’s climate challenges effectively requires a concerted effort from all stakeholders involved, with each playing a crucial role in mobilising the necessary resources.
According to climate experts, the country must urgently prioritise climate adaptation and mitigation measures to safeguard its future.
Substantial and sustained cooperation among the Government, the private sector and the international community was essential to address the growing financial demands of climate change and reduce the risks of severe environmental hardship in Zimbabwe.
“Zimbabwe must urgently prioritise climate adaptation and mitigation measures to safeguard its future,” climate expert Tracey Sadziwa said, pointing out the need for substantial and sustained cooperation among the Government, the private sector and the international community to address the growing financial demands of climate change and reduce the risks of severe environmental hardship.
Despite contributing minimally to climate change, African countries disproportionately bear the brunt of its impacts.