African Development Bank plans on launching Carbon Credit Support Facility to Enhance Climate Finance
African Development Bank (AfDB) has announced the launch of Africa Carbon Support Facility as reported by Reuters. The announcement aims to boost carbon markets across the continent. The plan is to get more and more financial resources for Africa. It is said that Africa as a region is being hit by droughts and storms. The facility is currently in the design phase and will include two significant components: supporting governments to develop, policies and regulations for carbon trading, and facilitating, supply and demand for carbon credits and the required market infrastructure.
Strategic Components of the Facility
- Policy and Regulatory Development: The facility is set to support the African governments and make such frameworks that would help in carbon trading and ensure the working of carbon markets to be efficient as well as transparent.
- Market Infrastructure Enhancement: More importance will be given to the infrastructure that might be needed to facilitate the trading of carbon credits, and listing of the same into African stock exchanges, which would increase the value of carbon credits by up to ten times.
Addressing Africa’s Climate Challenges
Although Africa contributes very little to global emissions, the continent is acutely vulnerable to climate impacts and the calamities like droughts and storms are already affecting African countries, especially Madagascar, Southern Africa and the Horn of Africa. Currently the continent only receives around 1% of global climate finance. The African Development Bank (AfDB) states can also see the urgency in developing carbon markets to help unlock new sources of funding for economic resilience and development amid climate risks.
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Future Outlook
The AfDB aims for a future where Carbon credits would become tradable commodities on the stock exchange, which would increase their value and attract more investments on the initiatives that involve climate change and further support the sustainability in the nation.
