Zambia says it plans to regulate the sale of carbon credits and take a share of the proceeds for its own coffers, following similar moves by Zimbabwe and other African countries aimed at tightening control of the burgeoning market.
“The biggest issue in this market is revenue sharing,” Collins Nzovu, minister of the green economy and environment, said in a telephone interview. “If we got 50% we would be very happy, those are the figures we are looking at as well.” Zambia will likely negotiate revenue-sharing deals on a case-by-case basis, added Nzovu.
In May Zimbabwe announced that it would void past deals between carbon credit program developers and local authorities and make 50% of the revenue payable to the treasury and a further 20% to local investors. Kenya is putting place rules to regulate the industry and Malawi last month said it had set up an agency to oversee the trade and marketing of the offsets.
The credits, which represent a ton of climate-warming carbon dioxide or its equivalent either removed or prevented from entering the atmosphere, are part of a rapidly growing global trade. The securities are bought by greenhouse gas producers to offset their emissions as legislation tightens with many nations acting to slow global warming.
The global market for the offsets is currently worth $2 billion and is projected to grow to as much as $1 trillion within 15 years, according to BloombergNEF.
When Zimbabwe enacted its rules it said that many programs had been concluded with local municipalities or traditional rulers, known as chiefs, and very little revenue had come back to the communities where the programs were sited. Nzovu said the industry has followed a similar pattern in Zambia.
Zambia is Africa’s fifth-biggest producer of carbon credits, accounting for 6% of the continent’s output from its 60 projects and 0.7% of global production, RippleNami Inc., a California-based data-collection company, said in a presentation at a conference in Victoria Falls, Zimbabwe on Thursday.
The parliament will consider a climate change bill in the fourth quarter of this year and will aim to increase regulation of the industry, Nzovu said.
Zambia will seek to split revenue fairly between program developers and the government so that it’s still attractive to invest in the country. “We are not looking at killing investors,” Nzovu said.