Over 3,000 Rwandan forest farmers and cooperatives could soon get additional money as an incentive for protecting and preserving their trees under the carbon market scheme, The New Times has learnt.
The revelation was made during the ongoing 28th UN climate summit, known as COP28, in Dubai, UAE.
It comes as Rwanda is planting 63 million trees, most of which are indigenous trees expected on the carbon market.
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A carbon market is a trading system in which carbon credits are sold and bought. This market enables "climate polluters" to fund projects that reduce carbon emissions in other countries, and they can then include these emission reductions in their own climate targets while still emitting greenhouse gases.
One tradable carbon credit equals one tonne of carbon dioxide.
Climate finance and carbon markets are among key topics at COP28 that need collective action.
ALSO READ: Can Rwanda make the best out of carbon markets?
A carbon market scheme is one of the mechanisms which investors and African governments, including Rwanda, are using to mobilise finance for climate mitigation and adaptation projects.
However, civil society organizations are urging governments to ensure the carbon market doesn’t become a scam in Africa, from large polluters - developed countries.
The development of the new project in Rwanda comes after the country launched a carbon market framework at the beginning of COP28.
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Concorde Nsengumuremyi, the Director General of Rwanda Forestry Authority, confirmed that with the new investor in the carbon market, awareness campaigns and meetings will be launched to educate forest landowners about the carbon market.
"We are planning to conduct awareness activities through different meetings and workshops. Wherever possible, we will use various social media,” he told The New Times.
Adam Bradford, Director of CO2 Cap Projects Africa, told The New Times that, "they are now in partnership with Rwanda Forestry Authority on a programme to help foresters, beginning with co-operatives, to monetise their forests in a sustainable way.”
CO2 Cap Projects Africa, supported by its parent holding company, CSG, is exploring carbon market opportunities in Rwanda, specializing in scaling verified carbon credit projects through forest restoration and agroforestry using blockchain technology.
"Initially, in our inaugural project, we will work with co-operatives to reach over 3,000 Rwandans. However, this will grow as we continue to collaborate with other landowners and institutions, with the continued drive to implement Rwanda’s new carbon trading framework in collaboration with the country’s leadership and public bodies,” he said.
He said the new Rwanda Carbon Trading Framework is a great start in the country’s journey to selling high quality, robust carbon credits.
"Our aim as CO2 Cap Projects Africa, from our entry into Rwanda, has been to help in creating a strong and fully verified internal market so that Rwanda can be the market leader in auditable, impactful carbon credits of the highest value,” he noted.
He said that as every tree absorbs a certain amount of carbon, they will calculate the carbon tonnes from each hectare of land and tree type.
"All of this data is stored using our technology and is converted into carbon credits – this is how the foresters receive money for their forest land. This is maintained under the condition that landowners preserve their forests even though they can still use their land for other purposes,” he noted.
The model, he said, helps to protect existing forests but also to support these local communities to develop socio-economically.
"Our model is also open to any other private landowners who wish to monetise their land and contribute to mitigating climate change.”
He said there should be a campaign as most landowners would not be aware that amongst the varying types of land and plants that they have, there is an opportunity to contribute to conservation and to generate new income streams.
"In partnership with Rwanda Forestry Authority, we are hosting an open consultation event with any stakeholders who might be interested in opportunities in the carbon trading market on December 19, in Kigali,” he added.
What could be the price per tonne of carbon credit?
For the country to reach its ambition of a high trading price and entry into the compliance market, there is a need for Rwanda to further develop its regulations, standards and crucially its implementation plan to realise its 2030 targets, Adam added.
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"Through partnerships with the private sector, the government will need to create its own carbon credit standard and could ideally position itself as a trading hub for the continent. We are already testing the feasibility of this through our projects,” he added.
Rwanda seeks to reduce 38 per cent of greenhouse gas emissions by 2030. So far, 30.4 per cent of the surface is covered by forests.
The Director General of Rwanda Management Authority (REMA) , Juliet Kabera, said Rwanda expects to sell 7.5 million tonnes of carbon dioxide equivalent (MtCO2e) – carbon credits – estimating that they could generate $337 million (approx. Rwf420 billion).
Given that the minimum price is $30, Rwanda will expect to get $45 per carbon credit (one tonne of carbon dioxide equivalent), hence $337 million from 7.5 million tonnes of carbon dioxide equivalent.
Under Article 6 of the Paris Agreement, a country (or countries) can transfer carbon credits earned from the reduction of greenhouse gas (GHG) emissions to support one or more countries meet climate targets.
The cooperation agreements that Rwanda signed with Singapore and Kuwait to collaborate on carbon credits aligned with article 6 of the Paris Agreement are also expected to support the three parties in achieving their climate action targets by 2030.
Civil society organizations are urging governments to ensure the carbon market doesn’t become a scam in Africa from large polluters-developed countries.
"Governments should be vigilant so that the carbon market becomes a scam,” Faustin Vuningoma, the coordinator of Rwanda Climate Change and Development Network (RCCDN), a coalition of 73 non-government organisations dedicated to climate change, environment, and development stated.
A climate think tank, Power Shift Africa, in September during the Africa Climate Summit, released a report dismissing Africa’s carbon markets scheme as a ‘wolf in sheep’s clothing’.
During the summit, hundreds of millions of dollars were pledged, including $450 million by the UAE Carbon Alliance, to boost Africa’s carbon credit production 19-fold by 2030.
This story was produced with assistance from MESHA and IDRC Eastern and Southern Africa Office for science journalists reporting on COP28.