Zimbabwe’s government said it will take control of the production of carbon credits in the country, stipulating that it will be entitled to half of the revenue from the securities.
(Bloomberg) — Zimbabwe’s government said it will take control of the production of carbon credits in the country, stipulating that it will be entitled to half of the revenue from the securities.
The credits, which represent a ton of climate-warming carbon dioxide 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.
All past agreements signed with international agencies and organizations are now “null and void,” according to Monica Mutsvangwa, the information minister. Local authorities are barred from entering into any carbon credit agreements, she said, without providing further detail.
Like Zimbabwe, some other African governments are trying to benefit from the carbon credit trade directly. Gabon wants to be paid for preserving the tropical forests that cover nine tenths of its landmass and soak up carbon emitted elsewhere.
“The growth of the carbon market requires the establishment of institutions to facilitate Zimbabwe’s participation, regulate players and ensure commensurate benefits accrue to the nation,” Mutsvangwa told reporters Tuesday in the capital, Harare at a post-cabinet media briefing.
Under the new framework, put together by Finance Minister Mthuli Ncube, Treasury will be entitled to 50% of any revenue from the credits while foreign investors can earn as much as 30% and local investors must get at least 20%.
Zimbabwe’s most notable carbon credit project is the 785,000 hectare (1.94 million acre) Kariba forestry project owned by South Pole, the world’s leading seller of offsets. The company is reviewing the Zimbabwe government’s announcement and “assessing the implications” for the Kariba project, a spokesperson said.
Right Direction
Other companies have applied to set up forestry programs to generate the credits and Zimbabwe’s state-owned Forestry Commission has plans to set up three programs, Stephene Zingwena, is acting director general, said.
“This policy is a step in the right direction for us,” Zingwena said. “It gives us direction in terms of how we will manage carbon credits as a country.”
Ncube listed a wide range of activities from which carbon credits could potentially be earned. Some, such as reforestation projects, are widely used to generate carbon credits while the promotion of the use of so-called green metals such as lithium are less readily recognized as an activity that could generate the securities.
The southern African nation now intends to “monitor all the movement and sale of carbon credits generated within its jurisdiction,” said Mutsvangwa. The Ministry of Environment, Climate, Tourism and Hospitality through the climate change department has been tasked with oversight on carbon trading. It will create a carbon trade committee.
–With assistance from Alastair Marsh.
(Updates with South Pole comment in 7th paragraph.)
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