Kenya’s Climate Change Amendment Act: Striking a Balance with Carbon Markets Commentary
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Kenya’s Climate Change Amendment Act: Striking a Balance with Carbon Markets

As regions of the world grapple with the devastating impacts of climate change, Kenya’s Climate Change Amendment Act stands as landmark legislation that shifts the trajectory of the nation’s commitment to climate justice. The amendment serves as a comprehensive and forward-looking response to the escalating climate crisis.

The Act introduces innovative provisions aimed at aligning Kenya with its international climate commitments, fostering sustainable development, and fortifying the nation’s resilience to climate change impacts. The Amendment Act seeks to bridge the loopholes in the initial 2016 Act and establish a connection between domestic climate policies and worldwide climate agreements, with a particular focus on the Paris Agreement. It has recognized Kenya’s role as a global climate leader by emphasizing equity, intergenerational responsibility, and the protection of vulnerable communities.

The Paris Agreement, referenced by Sections 2 and 7 of the Act, has committed member states to limiting global warming to well below 2 degrees Celsius and pursuing efforts to limit it to 1.5 degrees Celsius, besides establishing a global carbon trading mechanism.

Section 6 of the Act has been significantly modified to expand the mandate of the Climate Change Council. As a result, the council is now empowered to provide clear and decisive guidance and policy direction on carbon markets to the national and county governments, the public, and all other stakeholders.

In accordance with Section 8 of the Act, the Cabinet Secretary has been granted additional powers and responsibilities in relation to carbon trading. This includes the obligation to designate the National Authority and ensure the proper administration of the National Carbon Registry as outlined in Section 23G.

Additionally, the legislation stipulates the requirement of community development agreements, which are expected to include yearly social contributions. This contribution, expressed as a proportion of the cumulative earnings from carbon trading projects in the preceding year, must be incorporated into the agreements: the local community with the contribution set at 40% per annum for land-based projects and 25% per annum for non-land-based projects.

While the legislation has established a number of amendments, this section of the commentary will specifically focus on the largest addition covered under Part IVA, “Regulation of carbon markets.”

The Climate Change Amendment Act has incorporated carbon markets and participation in them as well as non-market approaches, in compliance with international obligations and policy direction on the same to the national and county governments, the public, and other stakeholders. Benefit-sharing mechanisms in carbon markets are also included in the amendment.

Carbon markets offer a dynamic approach to addressing climate justice while balancing economic prospects. At the heart of carbon markets lies the idea of economic incentives for reducing carbon emissions as stipulated in Section 23C(3) of the legislation. By placing a price on carbon, these markets will allow industries in Kenya to transition towards low-carbon practices as clean energy becomes more profitable. The approach is specifically ideal as it aligns economic growth with environmental responsibility, ensuring sustainable progress for the country. The mechanism allows nations with cost-effective emission reduction opportunities to assist those facing more significant challenges. In this way, carbon markets will foster global collaboration for the country by allowing trading of emissions credits.

Despite the aforementioned views, Kenya’s pursuit of climate justice through carbon markets does not come without challenges. Ensuring the integrity of carbon markets is of paramount importance; failure of which may result in issues such as the commodification of pollution by financial entities and an overall increase in global emissions. Additionally, critics have argued that international carbon markets might potentially be utilized by industrialized nations that have already exhausted their carbon budgets to procure carbon credits from developing nations like Kenya and, in turn, enable continued consumption of fossil fuels under the ideology that this makes them “carbon-neutral..”

In view of the bigger picture, carbon markets essentially undermine the achievement of the Paris Agreement, highlighting a speckle of contradiction in the Climate Change (Amendment) Act 2023. The workings of carbon markets fail to deliver reductions in line with those provided in the Paris Agreement, which has been a significant reference point for this amendment. In a report called “Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities, and Regions,” the use of carbon credits to offset ongoing emissions is dismissed as a valid strategy to achieve net-zero emissions and recommends actual reductions.

Critics have further argued that selling carbon credits from sectors such as Protected Areas wrongfully attributes environmental damage to Indigenous communities, despite their conservation track record.

“The African continent is one of those that are mostly affected by the impacts of climate change. Why should African governments not just put emphasis and develop proposals for richer countries to compensate for the damages they caused rather than offsetting the carbon?” A critique by Dr. Laban Rotich posed during the virtual public participation meeting.

This critique posits that carbon markets, by assigning a price to carbon emissions, create a “market right to pollute”. This conception thus gives the idea that industries or other entities with financial resources may continue to emit greenhouse gases without actually making substantive efforts to reduce their emissions. Through purchases of carbon credits, entities that may not afford to participate in carbon trading end up bearing the burden of reduction and, in turn, affecting the country’s emission reduction targets. An analysis from DeSMog shows that the chief beneficiary of growing voluntary carbon markets “may not be the climate — but the bankers and brokers betting that carbon trading is on the cusp of exponential growth.”

It elucidates that developed countries have historically contributed significantly to greenhouse gas emissions and therefore pursuing compensation acknowledges this historical responsibility. That those who contributed the least to the problem should not bear the brunt of its consequences.

Will Kenya’s bold step to incorporate carbon markets into the Climate Change Amendment Act be counterproductive? Provided the mitigation hierarchy of avoid-reduce-compensate is adhered to in the implementation of the amendment, the nation will be at the hands of a structured and effective approach to addressing the ruinous impacts of climate change. Regulatory measures such as transparent regulation and community engagement will play a fundamental role in ensuring the same. These will help establish mechanisms to prevent market manipulation and implement rigorous third-party verification processes.

















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