The African Development Bank (AfDB) has announced plans to launch a continent-wide carbon markets support facility to help African nations tap into urgently needed climate finance.
The initiative, disclosed on Thursday during the bank’s annual meeting in Abidjan, aims to position Africa as a more active participant in the global carbon credit economy.
The Africa Carbon Support Facility, which is still in its design phase, will have two main components. The first will assist governments in crafting robust carbon trading policies and regulatory frameworks, while the second will focus on stimulating the supply and demand for carbon credits, including strengthening the infrastructure required to support these markets.
“Through this, we envision a future where carbon credits can become a tradable commodity on Africa’s stock exchanges,” said Anthony Nyong, AfDB’s Director for Climate Change and Green Growth.
Carbon credits, generated from projects like tree planting and renewable energy installations, represent one metric ton of carbon emissions avoided or removed from the atmosphere. While Africa currently generates credits largely through forestry, land use, and agriculture, these are mostly sold on voluntary markets, where prices remain low.
The AfDB aims to shift more African carbon credits onto compliance markets, where prices can be up to ten times higher, significantly increasing revenue for countries and developers. “Carbon market development is an imperative for the continent,” added Kevin Kariuki, AfDB’s Vice President for Power, Energy, Climate Change and Green Growth.
Despite contributing a small fraction of global greenhouse gas emissions, Africa bears a disproportionate burden of climate change, with recurring droughts, cyclones, and floods devastating livelihoods across the continent. Regions such as the Horn of Africa and countries along the southern coastline have experienced intensified weather patterns linked to global warming.
Yet, Africa receives only 1% of annual global climate finance, a figure government officials say highlights the urgent need for more inclusive and equitable funding mechanisms.
In a related announcement, the AfDB also confirmed the election of Sidi Ould Tah, former Finance Minister of Mauritania, as the bank’s new president. His leadership will likely be central to pushing forward initiatives like the carbon support facility as Africa seeks more climate-resilient development pathways.
As the AfDB sets its sights on building a functional carbon credit market infrastructure, the facility could mark a significant turning point in how Africa leverages its environmental assets for sustainable growth.
Melissa Enoch
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