European Commission advocates for establishment of pricing scheme in Africa

The European Commission advocates for the establishment of a carbon pricing scheme in Africa as a pivotal step toward transitioning to a lower-carbon economy. This initiative aims to incentivize innovation, assign a cost to pollution, and generate revenue that can be directed towards advancements in clean energy technologies, according to Commission President Ursula von der Leyen.

Addressing the Africa Climate Summit, a part of the broader U.N. Africa Climate Week held in Nairobi, von der Leyen emphasized the importance of carbon pricing and "true carbon credits" as essential tools to expedite Africa's journey towards achieving net-zero emissions. She asserted that setting a price on carbon emissions is not only highly efficient but also one of the most effective strategies available.

Furthermore, von der Leyen highlighted the potential of bolstering the development of carbon markets, allowing Africa to access new income streams associated with its carbon sinks. Currently, South Africa is the sole African nation with a carbon tax in place. The significance of carbon pricing in Africa is underscored by the United Arab Emirates' recent announcement, preceding the COP28 climate summit, of its intent to invest $450 million to acquire carbon credits generated in Africa by 2030.

The heightened focus on carbon markets aligns with the objectives of the African Carbon Markets Initiative, inaugurated at COP27, which seeks to elevate Africa's carbon credits to 300 million by 2030. Concurrently, the European Union is preparing to launch its carbon tax next month, a development that could potentially complicate trade relations with African countries such as Mozambique.