Zambia Leads Regional Dialogue On Carbon Markets And Article 6 Implementation
Lusaka, Wednesday 28 August 2024 – The Ministry of Green Economy and Environment (MGEE) chaired the first regional High Level Policy Dialogue on Carbon Markets in Sub-Saharan Africa. This event was supported by the German government through the Supporting Preparedness for Article 6 (SPAR6C) Programme.
The aim of the High-Level Policy Dialogue was to discuss the role of carbon markets in the achievement of Nationally Determined Contributions (NDCs). Discussions focused on Carbon Markets under the Paris Agreement, and the opportunities and risks for host countries. Furthermore, participants from the various countries shared their statuses of National Carbon Market Frameworks, the key barriers perceived and the nature-based solutions and implications for Carbon Markets under the Paris Agreement.
The Paris Agreement, signed by 197 countries in 2015, represents a historic global effort to combat climate change by limiting global warming to well below 2 degrees Celsius above pre-industrial levels. Article 6 of the agreement is the cornerstone for international cooperation, fostering global Carbon Market mechanisms that enable countries to reduce greenhouse gas emissions while fostering sustainable development.
In attendance were delegates from; MGEE, the German Ministry of Economic Affairs and Climate Change, the German Embassy in Zambia, GGGI, GIZ as well as Climate Change focal points from Kenya, Namibia, Senegal and Zambia.
Speaking at the event, the Permanent Secretary of the Ministry of Green Economy and Environment Dr. Douty Chibamba, stated that the Zambian Government had made significant progress towards the institutionalisation of the Paris Agreement and has embarked on the development of its Carbon Market Framework. He cited the launching of Guidelines for the Submission and Evaluation of Mitigation Activities under Article 6 of the Paris Agreement: Part 1 of the Carbon Market Framework for Zambia and the decisions taken on the design and incorporation of a national carbon registry including the process for migration of existing voluntary carbon projects.
Dr. Chibamba said Zambia faces many challenges in its low carbon development and climate change is adding to these challenges. He said the recent drought is putting a heavy strain on Zambia’s power sector and has also left many farmers that rely on subsistence farming, without any food and income.
“More specifically, in our power sector, we are facing increasing demand where the country has to close a supply gap of 2.6 GW of installed capacity by 2026 and 3.7 GW by 2030 and in the face of more unreliable rainfall in key watersheds, Zambia can no longer rely on large hydropower projects but must explore photo voltaics, wind and geothermal energy sources,” he said. “What this means for Zambia, is that we now have a US$10 billion investment challenge over the next decade that is split broadly between US$5 billion for on-grid generation, US$2.5 billion for transmission and distribution and US$2.5 billion for off-grid generation. It is for this reason that Zambia is considering emission trading as a co-financing source to address such challenges.”
He acknowledged that the Paris Agreement and the Nationally Determined Contribution change the rules of the of the game in that if Zambia authorises a carbon project with corresponding adjustment, the project’s emission reductions will have to be added to Zambia’s greenhouse gas balance.
The Permanent Secretary said whilst this corresponding adjustment avoids double counting of emission reductions on a global scale, this requires more national decision-making processes and institutional arrangements, functions that were previously provided by the clean development mechanism or the voluntary carbon standards now have to be provided by the Government.
Dr. Douty Chibamba said this opportunity for cooperation on low carbon development investment also requires strategic direction and alignment to national policy and development objectives including NDC achievement.
He said Zambia has since taken decisions on the design and incorporation of the national carbon registry, the migration of existing voluntary carbon projects, of which Zambia currently has 65 projects registered under different standards, and Zambia’s share of proceeds for issuing emission reduction certificates.
“With the challenges at hand, we hope that this provides a clear and transparent framework for the use of carbon finance to support our low carbon development without jeopardising our NDC achievement,” he said in a speech read for him by Ministry of Green Economy and Environment Acting Permanent Secretary Mr Ranford Simumbwe.
Dr. Chibamba said the road to effective use of carbon finance is long and cumbersome and acknowledged that many Africa countries face similar challenges.
“Many African countries have questions pertaining to, how to approve or reject project proposals, the institutional arrangements required and the definition and application of share of proceeds,” he said.
AGN Chair Mr. Ali Mohamed said regional collaboration under Article 6 could be pivotal to advance Africa’s climate goals, achieve sustainable development, and gain a stronger foothold in the international carbon market.
Mr. Mohamed said collaboration will help Africa avoid a ‘race to the bottom,’ where buyers shop around for the lowest-cost carbon credits, potentially undermining the quality and value of projects. He said collaboration would also allow countries to learn from one another’s experiences and negotiate collectively for fair and beneficial Article 6 rules.
“This includes securing the right allowances and flexibility for avoidance or reduction projects, ensuring Africa maximises the benefits of Article 6. However, while joint strategy and negotiations are crucial, it’s important not to over-harmonise regulations. Each country’s carbon market framework would need to remain firmly rooted in national regulations and aligned with its own climate goals,” he said.
German Federal Ministry for Economic Affairs and Climate Action (BMWK) Mr. Thomas Forth called for a functioning global market.
Energy Commissioner for Africa, Federal Ministry for Economic Cooperation and Development – Germany Ms. Barbel Hohn emphasized the need to promote high quality projects.
During the German mission, German Parliamentary State Secretary of the Ministry of Economic Affairs and Climate Change and the Ministry of Green Economy and Environment will hold bilateral discussions to strengthen relations between the two countries. It is hoped that this high-level policy dialogue will be the first of many, held by African countries to stimulate regional cooperation and alignment in the development of carbon markets to increase carbon finance for low carbon and sustainable development.
The President of the Republic of Zambia in his address to Parliament on 10th September 2021, proposed the creation of the Ministry of Green Economy and Environment (MGEE). This was done in order to promote the focus on environmental sustainability through the strengthening of the institutional framework for implementing climate change commitments and effectively utilising the nation’s enormous natural wealth.
Subsequently, the Ministry was formally created through the Government Gazette Notice No. 1123 of 2021 with the responsibility of promoting effective and sustainable use of the environment, while at the same time, facilitating support for adaptation to and mitigation of the effects of climate change through low carbon developments.
About the Global Green Growth Institute (GGGI)
The Global Green Growth Institute (GGGI) is a treaty-based international, inter-governmental organisation dedicated to supporting and promoting strong, inclusive, and sustainable economic growth. GGGI supports its 47 Member States’ transition into a low-carbon green economy. GGGI provides policy advice and technical support in the development of green growth plans, policies and regulations, and mobilisation of green investments.
About Supporting Preparedness for Article 6 Cooperation (SPAR6C)
SPAR6C is a five-year funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), through the German government’s International Climate Initiative (IKI). The programme supports stakeholders in Colombia, Pakistan, Thailand, and Zambia to become prepared to engage in carbon transactions under Article 6 of the Paris Agreement.
SPAR6C provides decision support to government counterparts, capacity building for private sector and technical assistance to identify and prepare potential mitigation activities. In Zambia it works with the GFA Consulting Group and the UN Environment Program Copenhagen Climate Centre, led by GGGI.
