Green gold: Uplifting rural economies through carbon credits
By Santina Benson, Steve Kisakye and Jackson Mahenge
Mwalimu Nyerere once said, “Wizi ulio mbaya ni kumwibia mtoto wako ambaye hajazaliwa, ni kumwibia mjukuu wako mali yake. Kuharibu mazingira ni kuiba mali ya vizazi ambavyo havijazaliwa…”
To paraphrase, Mwalimu Nyerere meant that conserving the environment is key to ensuring livelihoods for our children and their children. Nature contributes to our day-to-day activities in our health, wealth, food, and security. To illustrate this, let’s focus on forests. It is estimated that one in every four people directly depend on forests for their livelihoods. Forests play a vital role in rainfall formation to support Tanzania’s predominantly rainfed agriculture, employing about 65 percent of Tanzanians . Forests are also critical in the fight against climate change as they represent an important natural carbon sink.
Despite the importance of forests, deforestation is still a reality when rural communities are forced to exploit forest resources for their livelihoods. Tanzania loses about 469,420 hectares of forest per year . In simple terms, a forest three times the size of Dar es salaam is lost every year. Communities are clearing these forests in search of livelihood as a means of agricultural expansion, harvest of forest resources (such as timber and charcoal), etc. Therefore, to protect forests, there is a need to attach a monetary value to their conservation which is where carbon credit markets can step in to do just that.
Carbon credits attach a monetary value to forests by paying communities to conserve the forests in their communities. A simplified version of how carbon markets work is that carbon credits offer payment as an opportunity cost to communities for not destroying the forest. Carbon credits (in this case, forest-based carbon credits) are developed through either avoiding deforestation, or restoring forest areas that results in the reduction of carbon dioxide (CO2) in the atmosphere. These carbon credits are traded in the international markets where organizations purchase them to offset their emissions.
For example, Carbon Tanzania, a REDD+ project developer, develops and manages carbon assets with rural communities to generate carbon credits. Carbon Tanzania has provided communities with over Tshs 3 billion of carbon revenue shares from the sale of carbon credits since 2013. These carbon revenues have financed community healthcare expenses, educating community children, funded construction of health and education infrastructure to mention a few.
Carbon credits are not limited to forests alone; there are pilots using the carbon credit model to pay smallholder farmers to adopt climate-smart agricultural practices. The model works by tracking the amount of carbon sequestrated in soil or crops over time utilizing climate-smart agricultural practices. For example, in partnership with Microsoft, Rabobank is piloting this model with smallholder farmers in agroforestry across Africa. Rabobank is targeting to reach 15 million farmers by 2025.
Another emerging segment for carbon credit application is the Blue economy, producing “Blue carbon credits”. Blue carbon credits are generated as blue ecosystems such as mangroves, seagrasses, and salt marshes sequester carbon from the atmosphere. For example, Mangrove forests grow in coastal areas, are important in preventing floods, and are crucial for maintaining healthy aquatic ecosystems. However, one of the key causes of deforestation of the mangroves is by coastal communities in search of livelihoods. This model is important to Tanzania given the country’s large coastal area and Zanzibar’s major dependency on the blue economy for livelihood.
To fully capitalize on these markets, there will be a need for investment in enabling policies, technical capacity, and technology. Enabling policies will guide carbon credit trading and incentivize investments in the sector. Good policies will protect the rural communities’ ownership of these carbon assets and their revenue share. As part of the REDD+ phase II, the government is working to mainstream the climate agenda within sectorial policies. Specifically, within the carbon credit trading, the government under the Vice President’s Office is developing guidelines to support the growth of the sector and safeguard communities.
Another key aspect within carbon credit trading is Monitoring, Reporting, and Verification (MRV) which provides proof and basis of compliance to agreed international standards in carbon asset development. Technology and technical capacity work in parallel in MRV. MRV requires technical knowledge on tracking and monitoring of carbon captured. Technology increases the accuracy of the measurements and tracking. For example, Rabobank partnered with Microsoft to leverage remote sensing, Artificial Intelligence, and Machine Learning expertise.
The potential for carbon credits in supporting communities is enormous. It supports the livelihood of communities, providing them with an alternative income stream, and incentivizing communities to become actual custodians of their environment. This model reflects the importance of having local communities at the center of conservation efforts. The global carbon credit market stage is set for countries to play their roles, and what remains is for Tanzanians to cement their foothold in this market.
Disclaimer: The opinions, statements and views expressed in this column are solely those of the author and do not necessarily represent those of The Citizen
