Download logoA carbon tax regime that covers carbon taxes on fossil fuels, maritime transport and aviation could generate additional resources to support Africa’s energy transition, says Claver Gatete, Executive Secretary of the ECA during a dialogue on carbon markets and development held is kept on the sidelines of the tenth century. Africa Regional Forum for Sustainable Development (ARFSD-10) in Addis Ababa, Ethiopia.
“In combination with other policies, the carbon tax could help reduce residual emissions that cannot be addressed by carbon credit markets or subsidies and technologies. Such a tax could enable countries to better respond to their commitments to contribute to reducing climate instability,” Gatete said.
Referring to the ECA’s preliminary studies on the benefits of carbon taxing, Mr Gatete noted that carbon taxing in global supply chains could allow countries such as Egypt and Ethiopia to raise substantial revenues that could be reallocated to research and development in the aviation and maritime sector. transports.
ECA studies also show that investments in nature-based solutions in African countries could generate up to $82 billion annually at a price of $120/ton of CO2 equivalent.
“Renewable energy and carbon sinks from forests and other ecosystems indeed represent a major potential that countries should tap to generate additional revenues and support ongoing efforts to build climate- and disaster-resilient green and blue economies. This would enable countries to make greater progress towards their sustainability goals,” said Mr Gatete.
Albert Muchanga, Commissioner for Economic Development, Trade, Industry and Mining at the African Union Commission, stressed the importance of decarbonizing economies and increasing revenue streams through clean energy, saying that decarbonizing economies through carbon tax is crucial to tackling the climate crisis. However, this requires strong engagement with stakeholders at national and global levels, which is necessary for success.
“African economies are small and fragmented, integrating them is necessary for a unified approach to promote a green transition across the continent,” said Mr Muchanga.
Discussions during the dialogue session focused on the four themes of carbon markets: voluntary carbon markets, carbon market compliance, Article 6 of the Paris Agreement, and carbon tax markets. Experts underlined that relying solely on carbon credit trading is insufficient and that fair negotiations and resource allocation are necessary to effectively address development disparities.
In her contribution to the discussion, Ahunna Eziakonwa, Regional Director of the United Nations Development Program (UNDP), said climate carbon credits have the potential to address the financial challenges facing the continent, but favorable deals and ensuring resources are spent on development initiatives are crucial. ensure that climate action in Africa is effective and sustainable.
“Beyond just understanding the carbon market space and carbon credits, there is a need for experts to advise governments on the different options available to Africa and help them understand the opportunities offered by carbon markets as a source of development finance and how they function,” said Ms. Eziakonwa adds that this requires strong involvement from producers, consumers, investors and many other stakeholders.
“Implementing the carbon tax requires evidence-based analysis and engagement with stakeholders, including policymakers, investors and civil society organizations.”
Jan Hoffmann, Head of the Trade Logistics Branch, Division on Technology and Logistics, shared the results of key findings of carbon emissions in the shipping industry and said climate change is having a disproportionate impact on small islands, developing countries and coastal countries.
“Carbon dioxide emissions have increased by 21% in the shipping sector over the past decade, which is a major problem in African countries. There is a need for alternative fuels for Africa to become competitive,” he said.
“For African countries to become suppliers of alternative fuels, investments in infrastructure and trade are needed to offset the higher costs resulting from climate change mitigation,” he added.
Explaining why blue and green economies are important for Africa to mitigate climate change, James Kairo, a Senior Research Officer at the Kenya Marine and Fisheries Research Institute, said mangrove forests and other blue carbon ecosystems are crucial to achieving the SDGS, in in particular SDG14 because they provide vital habitat for fisheries and support biodiversity.
However, Mr Kairo said these ecosystems are threatened by a lack of awareness, capacity building and resource mobilization. To address these, we must prioritize the protection and restoration of these ecosystems and raise awareness of their importance in achieving the SDGs.
Therefore, countries should encourage forest conservation and restoration efforts, while promoting sustainable forest management practices.
Experts at the dialogue session agreed that engagement, especially from investors and civil society organizations, is crucial for effective implementation of the carbon tax regime. Engagement strategies tailored to countries (and/or a cluster of countries with a similar context) were proposed to optimize support to governments in resource allocation and negotiation processes, thereby promoting fairness and sustainability. Furthermore, emphasis was placed on building institutional, legal, technical and financial capacities, in addition to appointing contact points and assessors for the implementation of Article 6.
The Dialogue on Carbon Credits was organized by the Regional Collaborative Platform (RCP), which brings together all UN entities working on sustainable development to ensure full cooperation and coordination of UN resources in addressing key challenges that cut across national borders. The RCP is chaired by the Deputy Secretary-General and co-chaired by two Vice-Presidents, the Executive Secretary of the ECA and the Regional Director of the UNDP.
Distributed by APO Group on behalf of the United Nations Economic Commission for Africa (ECA).