Kenya is often regarded as a continental and global frontrunner in #ClimateChange response. As a strategic move to stay ahead of the pack, the country is making significant strides in responding to the escalating demand in global #CarbonMarkets seriously. The country is proactively and diligently strengthening its policy and regulatory framework to unlock new sources of #ClimateFinance in this burgeoning sector to support its climate-compatible development.

Recent Key Developments

On the carbon markets front, two key developments have occurred in the last 8 months:

• Updated Legislation: In September last year (2023), Kenya amended its climate change framework law, the Climate Change Act, to include a dedicated section on carbon markets that was missing, “PART IVA – REGULATION OF CARBON MARKETS”. This marked a significant stride in the regulation of carbon markets in the country. The inclusion of carbon markets in the Act provides a legal and regulatory framework that facilitates the participation of various stakeholders in the carbon market, laying the groundwork for a transparent and well-defined market.
• Clear Carbon Markets Regulations: More recently, the Climate Change (Carbon Markets) Regulations, 2024 (Legal Notice No. 84) were published. These regulations (DOWNLOAD A COPY) provide stakeholders interested in participating in Kenya’s carbon market with clear guidelines on the operation of carbon markets in the country.

  

Implications and Opportunities Beyond Revenue Generation

Kenya’s carbon market participation goes beyond just securing finances. It has the potential to significantly impact key sectors, with implications for the broader economy.

• Land Use: There are opportunities to incentivise sustainable #land management (SLM) practices that, among others, improve soil health, reduce erosion, and conserve water (note: Kenya is a water-scarce country). Farmers who adopt these practices can earn #CarbonCredits for the carbon they sequester in the soil and vegetation, potentially providing them with additional income, which then makes #SLM practices more financially attractive.
• Agrifood Sector: Forestry, livestock, and crop production could all see a shift towards eco-friendly methods that reduce #greenhouse gas (GHG) emissions, conserve (climate-vulnerable) natural resources, and promote biodiversity. The move could also accelerate Kenya’s ambitious agricultural transformation, especially as per its Agricultural Sector Transformation and Growth Strategy (ASTGS) 2019-2029 and the Kenya Climate Smart Agriculture Strategy 2017-2026.
• Climate Action: Carbon markets can incentivise activities that reduce GHG emissions (e.g., across the #agrifood sector)–SLM practices can capture carbon in the soil while reducing deforestation and enhancing forestation helps to conserve existing and expand carbon sinks respectively. This can contribute to Kenya’s pursuit of its climate goals set out in agreements like the Paris Agreement — for details on how Kenya seeks to contribute to the achievement of the Paris Agreement, see Kenya’s updated first Nationally Determined Contribution (NDC).
• Economic Transformation: A more resilient and environmentally conscious economy could emerge from carbon market participation, particularly by promoting sustainable practices which improve the #resilience of the #agriculture sector to climate shocks like #droughts and #floods; encouraging businesses to adopt greener practices throughout the supply chain; and creating new economic opportunities, with potential for the creation of more decent #jobs (e.g., in carbon projects development, verification, and carbon trading).

Addressing Concerns and Looking Foward

There are standing concerns about the commodification of nature within carbon markets. These concerns are valid and require candid discussions among all stakeholders. Also, the land question in Kenya remains unresolved. Considering that many of the envisaged carbon projects are land-based, there are valid concerns here. The country must streamline and complete land reforms as a strategic action in developing the space for its carbon market. The journey will not be without challenges, but besides environmental and economic benefits, #equity and #justice must be integral focal points in the operationalisation of carbon markets in the country. Thus, there needs to be adequate awareness creation and capacity building to enable the farmers to benefit from the carbon markets–the civil society can play a more active role here. Indeed, it is critical to manage farmers’ high expectations from the carbon market to avoid disappointments and discouragement. At the moment, instead of focusing on the incomes from the ‘carbon trade’, the key emphasis ought to be on the benefits that come from the farm as a result of sustainable land/agriculture management and eco-friendly practices (e.g., increased production and productivity, better farm incomes, healthier soils, reduced soil erosion etc).

Kenya’s leap into carbon markets is and will continue to be, an intriguing case study. I am excited to see the impact this will have on the country’s #environment, economy and wider society. I believe that Kenya could serve as a model for other African nations and beyond in this area.

Join the Conversation!

What are your thoughts on Kenya’s move to participate in the carbon markets? Can carbon markets be a force for good? Share your insights in the comments and/or reach out to chat more!