Africa’s transition to a lower-carbon economy would greatly benefit from setting up a carbon pricing scheme that encourages innovation, puts a price tag on pollution and unlocks revenues that can be poured into clean energy technologies, according to the European Commission.
Kicking off the Africa Climate Summit, part of the wider U.N. Africa Climate Week taking place in Nairobi, Commission President Ursula von der Leyen Tuesday pitched carbon pricing and “true carbon credits” as vital tools to accelerate the net zero transition in Africa.
“I believe … that setting a price on carbon emissions is one of the most efficient and one of the most effective tools in our hands,” she said.
Von der Leyen also stressed that bolstering the development of carbon markets would allow Africa to tap into new income streams for its carbon sinks. So far, only South Africa has a carbon tax in place.
In a sign that carbon pricing in Africa will be a major theme at this year’s COP28 climate summit, the United Arab Emirates, which will host the talks, on Monday announced its intention to invest $450 million to purchase carbon credits generated in Africa by 2030.
The growing focus on carbon markets builds on the African Carbon Markets Initiative launched at COP27, which aims to ramp up Africa’s carbon credits to 300 million by 2030.
The EU’s carbon tax, meanwhile, will go live next month, threatening to complicate trade relations with African countries like Mozambique.