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Rwanda is looking to join the carbon market and will be announcing its offering in April 2023, according to the Minister of Environment, Jeanne d'Arc Mujawamariya. The carbon market allows entities to trade carbon credits earned by reducing emissions beyond required levels. These credits can then be sold to entities unable to meet their reduction requirements.
The primary objective of carbon credits is to reduce emissions of greenhouse gases from industrial activities and, in turn, mitigate the effects of rising climates. The government, or any authorised agency, can specify a carbon credit trading scheme, as well as issue tradable certificates among registered entities.
To harness the opportunities the carbon market provides, Rwanda is creating a regulatory framework and a national registry. This will not only promote transparency and environmental integrity, but also add value to the quality of carbon credits, therefore, carbon investments in Rwanda.
The government aims to make deliverables that will include the potential of carbon stocks from selected sectors, reviews of policy, institutional and legal policy frameworks, centralised accounting and reporting platforms, an operational online carbon registry, and training models of stakeholders in the market.
By December 2020, over 2.25 million carbon credits had been issued to Rwanda from the Clean Development Mechanism and voluntary carbon markets. In addition, the country is developing its carbon emissions trading and readiness frameworks under Article 6 of the 2015 Paris Agreement. The government is committed to making carbon investments in Rwanda, with the private sector actively playing its role by investing in projects that generate carbon credits.
Carbon credits can be traded on private and public markets. The current trading rules allow for the international transfer of credits. By purchasing carbon credits, businesses invest in projects that help reduce greenhouse gas emissions. However, environmental experts argue that the current global carbon market is unfair in terms of pricing and does not give justice to Africa, a country that contributes less to carbon emissions.
Rwanda could benefit from carbon markets, which could unleash an estimated annual $82 billion in value, at $120 per tonne of carbon emissions, as well as create 167 million additional jobs. Experts suggest that Africa should seek entrance into the compliance market rather than voluntary markets because that's where most of the financing is.
DGB Group is a large-scale project developer, developing impactful projects that capture considerable amounts of carbon and restore nature. Many of our projects are also in Africa, conserving biodiversity and helping the sustainable development of local communities benefitting from these projects.
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