The Kenyan government has taken a significant step towards establishing a comprehensive framework for carbon trading within the country. Through proposed amendments to the Climate Change Act of 2016, introduced in the Climate Change (Amendment) Bill of 2023, the government aims to establish regulations governing domestic carbon markets.
Under the proposed changes, various avenues for carbon credit trading are outlined. These include trading facilitated by bilateral or multilateral agreements, participation in voluntary carbon markets, or engagement in trades with private entities. The responsibility for approving and overseeing carbon credit trades lies with the Environment Cabinet Secretary, who will also have the authority to introduce additional regulations to ensure the proper functioning of carbon markets.
The bill further empowers the Cabinet Secretary to enter into agreements with internationally recognized entities that have been approved by credible international bodies to establish or oversee carbon markets. This provision reflects Kenya’s intention to align its carbon trading efforts with established global standards.
A carbon market functions as a mechanism through which both public and private entities can engage in the transfer and transaction of emission-reducing units, offsets, and mitigation outcomes resulting from carbon-related initiatives, programs, and projects. This market-driven approach incentivizes efforts to reduce carbon emissions and combat climate change.
Importantly, the concept of carbon credits is central to this framework. Carbon credits are units generated when the equivalent of one metric tonne of carbon dioxide is prevented from entering the atmosphere. Despite having a comprehensive climate change law in place, Kenya has thus far lacked a well-defined mechanism for trading carbon credits.
The urgency for establishing a functional carbon trading framework is underscored by existing initiatives. Companies like KenGen have already been generating carbon credits, as evidenced by their planned sale of certified emission reduction credits generated from geothermal power projects. However, the absence of clear regulations has hindered the efficient trading of these credits.
Environmental experts, such as Stella Ojango, an environmental lawyer, have emphasized the need for regulatory clarity in carbon trading. While the Climate Change Act of 2016 lays the groundwork, amendments are required to adequately address carbon trading. With the proposed changes in the Climate Change (Amendment) Bill, Kenya aims to create a more robust and effective platform for carbon credit trading, aligning its efforts with global best practices and enhancing its contributions to the fight against climate change.
