The purchase and sale of carbon credits are relatively new concepts in Africa, accounting for less than three percent of the $144 billion global carbon credit trade. The system is designed to reduce carbon emissions worldwide by allowing projects that that produce low carbon emissions to sell credits to projects that want to reduce their carbon emissions under the Kyoto Protocol. The carbon trade is starting to pick up in African countries such as Kenya, where a Swiss company is one of many participants.
Something new in western Kenya homesteads: a LifeStraw Family water filter, produced by the Swiss health-products company Vestergaard Frandsen.
Community workers are distributing them for free to 900,000 households.
Through its safe drinking water project, the company aims to turn a profit by selling carbon credits in the $144 billion global carbon market.
"What we are looking at is about two million tons of carbon emissions reduced per year by providing 90 percent of the families in the province with LifeStraw Family," explained Alison Ann Hill, concept development manager at Vestergaard Frandsen's U.S. office.
That calculation is based on the amount of firewood an average family uses to boil water to make it safe to drink.
Vestergaard Frandsen's LifeStraw Family water filter project is one of more than 60 projects in Africa registered under the Kyoto Protocol's Clean Development Mechanism, or CDM. Under the CDM, industrialized countries invest in projects that reduce greenhouse gas emissions in developing countries.
Projects receive one carbon credit for every metric ton of carbon dioxide that is prevented from entering the Earth’s atmosphere. Carbon credits are then sold on the market to others who wish to reduce their carbon emissions under the Kyoto Protocol.
Critics of the global carbon market say the system encourages companies in industrialized countries to continue to pollute, yet meet emissions standards through the purchase of carbon credits.
They also say it is unfair that non-polluting projects in Africa and other developing areas are supporting polluters in developed nations.
But in African countries, carbon credits are the new engine for environmental conservation and economic growth, says Adriaan Tas, managing director of the Nairobi-based consultancy Carbon Africa Ltd.
“A big project like Lake Turkana Wind power -- we estimate that, per year, it will receive 7.5 million euros from the carbon market," Tas said. "If you start comparing these kind of numbers with donor aid -- ODA [Overseas Development Assistance] money -- you actually realize that the carbon markets are almost creating as much cash flow into developing countries as ODA.”
Tas says African countries must decide whether they can develop economically using fossil-based fuels or the more environmentally-friendly renewable energies such as hydro, wind, and solar power.
He says projects starting up in countries such as Kenya that are not registered by the end of next year face a formidable obstacle, when some provisions associated with the Kyoto Protocol run out.
“One of the problems that we are facing at the moment is that the European Union has been very clear that, after 2012, they will only accept carbon credits coming from Least Developed Countries [LDC]," explained Tas. "Kenya for instance is not an LDC, South Africa, Ghana, Nigeria - so suddenly all those countries will not be able to benefit anymore if the European Union sticks to its position there.”
The next U.N. climate change conference is due to be held in Durban at the end of this year.