Carbon finance stream from Africa can be scaled up to $200 billion per year: Osinbajo

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Nigerian Vice President Professor Yemi Osinbajo said Africa’s share of the global carbon market can be massively expanded to reach $120-200 billion foreign direct investment (FDI) a year.

This was stated by the Vice President during his opening speech at the Rockefeller Foundation meeting in New York.

He identified a combination of capital flows, job creation, and avoiding long-term climate destruction as critical drivers of African leaders’ interest in supporting this effort.

According to him, Africa currently has only a small part of the carbon market. He explained the importance of this projected carbon finance stream, saying:

  • “For a continent that needs $240 billion a year in mitigation investments alone, this stream of carbon finance could make the difference between making the transition and not making it. As all of us in this room know well, the priorities of the African continent are not only to act decisively on the climate crisis, but also to create significant growth opportunities for our young and growing population.”
  • “The investment required to advance the energy transition in Africa is enormous. World Bank estimates suggest that Africa needs US$6.5 trillion by 2050 just for mitigation actions to keep temperatures below 2 degrees of warming.

Vice President Osinbajo also highlighted that the carbon market pipeline could create 30 million jobs in the next decade, with the potential to create more than 100 million jobs through climate-aligned projects by 2050.

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Africa’s carbon markets: During his speech, Vice President Osinbajo noted that the rapid progress made in Africa benefited from the support of a Steering Committee highly engaged with the United Nations, the Global Energy Alliance for People and Planet (GEAPP), USAID, and a variety of other public and private. stakeholders, resulting in the successful launch of the African Carbon Markets (ACMI) initiative in Sharm-el-Sheikh, Egypt during the COP-27 event.

  • “The strong commitment and presence of other African leaders demonstrate Africa’s will and leadership. We already have 7 African countries (Burundi, Gabon, Kenya, Malawi, Mozambique, Nigeria and Togo) signed up to develop national carbon enablement plans and over $200 million in advanced market commitments, which we must continue to advance as it progresses. to be the fundamental driver of action in the continent”.
  • “I think the time is ripe for Africa to engage more fully in the global carbon market conversation, especially in light of slowing green investment flows to the continent. The work that several of us have done together in recent months makes it clear that while other sources of flows are slowing globally, carbon markets are growing rapidly.” Osinbajo said.

Promotion of carbon markets: Vice President Osinbajo also spoke about the essence of collaborations in the development of carbon markets in the continent. He said collaboration is key to unlocking opportunities in Africa’s carbon markets. He said:

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  • “One of the strengths of ACMI and the way we need to structure it going forward, in terms of governance, is the flexibility to work seamlessly with other initiatives, and there will be many others. Two days before the opening of Cop 27, Senator John Kerry and I had a discussion about the proposed Energy Transition Accelerator and we both agreed that once the details were ironed out, we would work in a collaborative framework with ACMI.
  • “Carbon markets will play a critical role in the implementation of this (Energy Transition) Plan, in mobilizing the capital needed to move to our trajectory of a net zero economy. I want Nigeria to have the first Carbon Market Activation Plan”.

In his contribution, US Presidential Envoy on Climate Change Senator John Kerry praised Vice President Osinbajo for his leadership on the energy transition issue. Kerry said:

  • “We are grateful for the leadership of the VP, grateful for the reception they gave me on my visit to Nigeria. I am honored to share the platform with you on how to move the African Carbon Market Initiative (ACMI) forward.
  • “It is possible to create a high-integrity carbon market to address the aspirations of climate change and African development. We are all united waiting to develop the financing”.

In case you missed it: The ACMI is a new initiative that was launched during the conference of the parties event (COP 27) held in Egypt. ACMI will be led by a fourteen-member steering committee of African leaders, CEOs and carbon credit experts. The ACMI aims to dramatically expand Africa’s participation in voluntary carbon markets.

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