Experts Want Establishment Of African Carbon Market

Afonne Emmanuel
Nov, Sat, 2023

Business , Economy/Business

Experts want establishment of African carbon market

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By Lucy Ogalue

Some experts say that the Africa Continental Free Trade Area (AfCFTA) will considerably increase African trade without adding significant pressure on climate change if fully implemented.

The experts said this while presenting their research findings on “AfCFTA and Industrialisation in Africa” at the ongoing African Economic Conference (AEC) 2023 in Addis-Ababa, Ethiopia.

The News Agency of Nigeria (NAN) reports that the event has as its theme “The Imperative for Sustainable Development in Africa”.

They agreed that whether establishing a single or several carbon markets in Africa, continental coordination through AfCFTA around carbon pricing was desired.

Mr Simon Mavel, an economist at the Economic Commission for Africa (ECA), presented a paper on “Greening the AFCFTA” .

His findings showed that pursuing existing National Determined Contributions (NDCs) or establishing an African carbon market on top of the AfCFTA reforms would substantially reduce greenhouse gas (GHG) emissions.

“Although there is a trade-off between reducing GHG emissions and spurring economic benefits, establishing an African carbon market will reduce GHG emissions while preserving foreseen economic benefits from AfCFTA.

“Also, an African carbon market is more efficient than existing NDCs in meeting Africa’s climate objectives, Mavel said.

An economist at the Trade and Industrial Policy Strategies (TIPS), Seutame Maimele, said that countries need to advance climate-resilient development to mitigate the impact of the European Green Deal (EGD) in Africa.

Maimele, in his research on EGD and its implications for Africa, said this could be through creating a regional green industrial policy for Africa, utilising the AfCFTA and creating transformative industrialisation.

“The African Union within the AfCFTA can lead to creating a regional carbon market that can be utilised for selling carbon credits.

“This market can also be used to retain the funds collected by the EU from the continent,” Seutame said.

Regarding the debt for climate swaps, Seutame said that anticipating the climate debt that Africa would pay, it was essential to put measures in place to hold the global north responsible for climate change.

Similarly, Dr Abas Omar, a PhD candidate at the Research Institute of Economics and Management in China, said the BRI was an alternative industrialisation model for Africa.

Omar said this while presenting a paper on whether the Belt and Road Initiative (BRI) boosts industrialisation in Africa.

“The BRI accelerated China-Africa investment. The significant funds are in energy and infrastructure. Combining BRI membership and the value of infrastructure contributions indicates the BRI’s channel of impact on Africa’s industrialisation.

“The BRI significantly promoted Africa’s industry value addition. Moreover, while infrastructure alone is inadequate for African industrialisation, the BRI augments infrastructure to promote African industrialisation.

“Our study findings recommend an extended period of BRI membership, broader institutional and investment climate enhancements and a revision of national/continental priorities for the BRI’s second phase,” Omar said.

On how trade in services affects industrialisation in sub-Saharan Africa, Bouraima Sawadogo, a Regional Integration Consultant at the African Development Bank (AfDB), said African countries need to include services as strategies in their industrial policies.

“The acceleration of implementing AfCFTA’s protocol will increase trade in services within the region, resulting in a higher impact on industries that import services as inputs,” he said. (NAN)(www.nannews.ng)

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Edited by Ese E. Eniola Williams

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