The Kenyan Scholar

Shifting the production of energy from thermal power plants to renewable energy sources like hydro and geothermal represents a vital source for the generation of carbon credits. This is because the shift guarantees that the volume of released greenhouse gases declines in the atmosphere. It explains the reasons for the report that renewable energy activities represent 45% of projects registered to generate carbon credits worldwide and still dominate the supply within carbon credit markets.

The government maintains that the increase in Kenya’s e-mobility is expected to reduce the dependence on fossil fuels, eliminate urban air pollution, and enhance public health. Carbon revenues have the potential to subsidise technology for electric vehicles and promote adoption while leveraging additional climate financing through private-public partnerships. Furthermore, Kenya aims to solve energy access challenges by using carbon financing to subsidise transformative high-tier technologies for clean cooking by the end of this decade, which will benefit 45 million Kenyans lacking access to clean cooking.

All this can and will benefit the ordinary Kenyan.

How can ordinary Kenyans, as individuals or average groups, benefit from carbon trading?

The carbon market structure provides an opportunity for ordinary Kenyans to benefit by incentivising the market. For this to happen, however, it has to be implemented at scale, which means individuals must register as a community or group and conduct projects together.

This is so since the transaction cost for most carbon projects is extremely high, necessitating the importance of carrying them out at scale that makes economic sense. Hence, it is crucial to explore how Kenyans can transform carbon market opportunities within priority industries into actual investment.

Experts in Kenya have been describing as a result the different models for innovative financing and the role that can be played by local financial institutions in supporting project developers in the private sector. This has also included unpacking the intricacies of building infrastructure and pricing to promote transparency, accounting, and integrity. To deploy carbon trading initiatives, multiple approaches for syphoning carbon dioxide from the atmosphere exist.

The most significant reduction of emissions represents some opportunities that are largely based on land in most cases; hence the reason for the significant interest in forests and trees. This is what is dubbed nature-based solutions. Carbon dioxide is absorbed by a tree from the atmosphere to release oxygen, and thus the more trees there are, the more photosynthesis takes place. However, there is no immediate answer for the number of trees one needs because there is no similar way used by trees to sequester carbon.

Difference exists in sequestration between: a younger tree and an old one; huge trees that grow slowly and tiny trees that grow fast; and a European tree and an African tree. Kenyans have an advantage because the tree species here in Africa are the best globally in sequestration; hence the significant interest in carbon trading.

Biofuel use also represents another opportunity for carbon trading in Kenya, apart from using trees. Climate change research points to the presence of the transition threshold from petro-economy, driven by carbon from fossil fuels, to bioeconomy based on biomass created via photosynthesis. Overwhelming carbon positivity is underpinned by the petro-economy in adding carbon to the already-imposed load at the rate of about 8 gigatonnes per year. Bioeconomy, conversely, is widely regarded as carbon neutral, where carbon emission from burning replaces carbon absorbed back by growing crops.

Shifting from systems powered by fossil fuels to clean energy such as wind, solar, hydro, or geothermal features a potential carbon project.

Some of Kenya’s geothermal projects have in fact been funded using carbon finance. The Kenya Electricity Generating Company (KenGen) has booked revenue worth Sh12.7 million generated by trading carbon credits. With its generation portfolio of 86% energy from renewable sources, KenGen is deliberately acting to decrease carbon emissions through commitments and actions, both internationally and locally. KenGen has been awarded global funds through its emission reduction actions to usher in a net-zero future.

Other few entities appearing on the Nairobi Securities Exchange also made steps in offering performance metrics regarding carbon footprint reduction. This illustrates that there is an opportunity for Kenyan companies to leverage economic opportunities created by carbon markets.

Based on its 2023 annual report, Safaricom PLC presented carbon reduction targets that are science-based to help the company plan its progress towards transforming into a net-zero carbon-emitting firm by 2050. The company reduced its overall emissions by 6% in the financial year 2022.

East African Breweries Ltd. (EABL) highlights in its 2023 annual report that the company has decreased its carbon footprint significantly by installing and deploying biomass boilers in its production sites located in Kisumu and Nairobi. As a result, the company’s carbon emissions reduced by 55% in 2023. The project also saw the increase of renewable energy use to 65% across its sites by the end of last year.

An opportunity exists to develop technical capacity and create employment routes for our burgeoning population. Integrity that is end-to-end in carbon markets is essential to ensure the effectiveness and credibility of carbon market activities, which provides confidence to stakeholders and investors that carbon credits indicate genuine social and environmental benefits. It protects against double counting while also fostering transparency that promotes trust in the system for the carbon market.

President William Ruto unveiled the Africa Green Industrialisation Initiative at the world's largest climate conference in Dubai (COP28) last year. It built upon the Nairobi Declaration with a vision to drive green industries in Kenya and on the continent.

With Kenya’s endowment of abundant renewable energy, aspirations are to boost renewable energy production to 100 GW from the current 3 GW by 2040. This ambitious target will position the country as a premier industrial hub, welcome international ventures, and nurture the adoption of technologies for carbon management.

A lot goes on environmental-wise in Kenya. It is one of a handful of country states globally generating and utilising electricity from renewable sources, almost completely. Moreover, the nation’s capital, Nairobi, boasts of being the home base for the UN environment.

Deals on carbon credits as conducted by the government have not been apparent to most Kenyans. This why the government must endeavour to do things like going for meetings, discussing possible investment opportunities as well as collaboration frameworks with investors and partners, in broad daylight.