Eastern Africa, like the rest of the continent, is owed significant carbon credits created by industrialization in the more developed world, African Development Bank said in its latest report. Carbon credits (often referred to as offsets) have an important dual role to play in the battle against climate change. They enable companies to support decarbonization beyond their own carbon footprint, thus accelerating the broader transition to a lower-carbon future. The lender’s ‘Regional Economic outlook 2022’ released Friday, October 29 said that the region’s estimated carbon credit, using the discounted social cost of carbon, is $4,956 on a per capita basis during 2022–2050, implying that the region is owed $1,960 billion. That means that if compensated annually during 2022–2050, East Africa should receive an estimated $67.59 billion per year in climate change compensation under “common but differentiated responsibilities” principles accounting for historical climate damage. Furthermore, East Africa’s carbon credit exceeds Africa’s other regions. Speaking to The New Times in an exclusive interview, Faustin Munyazikwiye, Deputy Director General, Rwanda Environment Management Authority (REMA) explained that the credits translate into a voluntary carbon market. “Rwanda, like other countries, is supported in financing projects that aim to cut down carbon emissions, which will be needed to neutralize residual emissions that will persist even under the most optimistic scenarios for decarbonization.” Munyazikwiye said that compensations are not in the form of monetary value, but rather in the support of reaching different partnerships. Climate finance key According to the report, climate finance is a key aspect in bridging the gap around current and future generational equity with regard to climate impacts, and in line with the UN’s Sustainable Development Goals (SDGs). For instance, data published in the report indicates that the region’s revised Nationally Determined Contributions (NDCs) to climate financing needs are estimated at $725.61 billion on average during 2020–2030, with adaptation and mitigation financing needs estimated at $219.04 billion and $389.95 billion, respectively. On average $65.96 billion is required each year, during 2020–2030 to implement the NDCs. If East Africa receives the same annual amount of climate finance as was received over 2016-2020 ($5.77 billion per year), the resulting financing gap is estimated at $60.19 billion a year during 2020-2030. These current trends demonstrate that Africa’s conditional NDCs are unlikely to be delivered as well as other multiple SDGs. High vulnerability Eastern Africa’s high vulnerability to climate change is attributed to the sensitivity of the region’s livelihood and economic sectors, according to the report. “Climate change presents significant ecological, socioeconomic, and strategic risks to the region. These impacts are becoming dynamic and are compounded by other shocks including commodity prices, health, and insecurity.” As estimated by the AfDB, climate change led to an average annual loss in GDP per capita growth of 5-15 per cent in Africa during 1986–2015, with these losses varying according to economic structure and exposure to climate change.
