Africa Climate Week: Carbon pricing seen as key tool to drive sustainable development and social benefit

Africa Climate Week: Carbon pricing seen as key tool to drive sustainable development and social benefit

Rachel Boti, Ministry of Environment and Sustainable Development, Côte d'Ivoire

Rachel Boti, Ministry of Environment and Sustainable Development, Côte d'Ivoire

On Tuesday, March 19 at Africa Climate Week, the World Bank Group (WBG) and International Emissions Trading Association (IETA) hosted a Carbon Pricing Leadership Coalition (CPLC) workshop on Carbon Pricing, Markets, and Sustainable Development in Africa. This all-day event showcased how policies and programs to put a price on carbon can mobilize climate investment, drive social benefit, and reduce carbon pollution. The agenda featured key stakeholders who are either implementing, considering, or advancing carbon pricing—including representatives from Burkina Faso, Côte d'Ivoire, South Africa, Rwanda, Senegal and Nigeria. Drawing over 250 participants, the key takeaways included:

1)      There is a compelling case to price carbon to drive sustainable development in Africa;

2)      Momentum for carbon pricing is building in Africa, but more needs to be done to expand coverage of initiatives across the continent;

3)     Communication and stakeholder engagement are key to ensuring carbon pricing initiatives are equitable and aligned with larger development goals;

4)      Cooperation—domestically, regionally, and internationally—can facilitate greater ambition and efficiency of carbon pricing initiatives (CPIs).

These takeaways and the outcomes will provide foundation for CPLC’s future activities, including enhancing awareness of the important role carbon pricing can play in African countries, engaging youth and other stakeholders in the region, and increasing country-specific knowledge creation.

Asmau Jibril, Federal Ministry of Environment, Nigeria

Asmau Jibril, Federal Ministry of Environment, Nigeria

Asmau Jibril of the Federal Ministry of Environment of Nigeria articulated the importance of the session emphasizing that “Africa has come together to join the rest of the world in tackling the issues of climate change as we have just one world and we have to protect it now”.

In the first session, panelists discussed the role carbon pricing could play in achieving sustainable development objectives. They highlighted the importance of designing carbon pricing initiatives in the context of local conditions to ensure predictability for future investments. They also referenced benefits that accrue from the incentives carbon pricing policies and measures create including technology development, revenue generation that can be channeled towards additional priorities, and job creation.

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Regarding the private sector, discussion highlighted how African businesses operate in a globalized world with global supply chains. The panel mentioned how in South Africa the number of companies disclosing the use or future use of an internal carbon price is increasing. Applying a price on carbon can help increase transparency and allows companies to make long term decisions regarding their investments and operations. The panel also noted that concerns regarding competitiveness, especially on energy intensive economies, need to be addressed to increase the responsiveness among businesses. They added that as companies begin linking their finances closer to their carbon footprint, climate action will accelerate. The panel underscored the need to have a clearly defined climate strategy with an overarching vision and purpose to define carbon prices that would be responsive, equitable and relevant. This will ensure a just-transition for people whose livelihood depends on fossil-fuel intensive industries.

In the afternoon, representatives from the West African Alliance, UNFCCC, Perspectives Climate Group, UNEP, and the World Bank Group looked at ongoing carbon pricing initiatives in Africa, including those that build on past experiences with carbon markets and new pilot opportunities. A common theme across the ongoing initiatives was the importance of aligning carbon pricing initiatives with other domestic policies to avoid inefficiencies and unintended impacts and ensure coherence with sustainable development objectives.

Finally, the closing session focused on international cooperation on carbon markets and the opportunities for African engagement. The discussions emphasized how the efficiency of carbon markets and their ability to increase climate ambition are worth fighting for—setting the stage for Article 6 negotiations moving forward.

There is room to explore ways to roll out carbon pricing mechanisms in Africa which are not in conflict with poverty eradication gains. [Mechanisms that are] complimentary with national plans to deliver Sustainable Development Goals (SDGs) ensure that the chosen carbon pricing tools fit national circumstances.
Davinah Milenge-Uwella, African Development Bank

Davinah Milenge-Uwella, African Development Bank

In the closing session, Dr. Venkata Ramana Putti of World Bank Group called for enhanced engagement with governments, private sector representatives, and civil society organizations and emphasized how institutional partnerships, such as the West African Alliance on Carbon Markets and Climate Finance, can improve the likelihood of carbon pricing adoption.

Here are some of the next steps:

1.       Knowledge Creation and Distribution

CPLC partners, like the World Bank Group, will continue exploring ways to conduct country and regionally-specific carbon pricing research in Africa.

2.       Increase Collaboration & Engagement

The CPLC aims to expand the Africa Working Group to bring in more stakeholders and foster important conversations on the role carbon pricing can play and the best practices for its implementation.

3.       Expand Capacity Building

CPLC partners will continue to support capacity building in African countries to ensure proper readiness for the implementation of carbon pricing initiatives that are environmentally effective and aligned with sustainable development.

Panelists take a photo after the closing session and final remarks

Panelists take a photo after the closing session and final remarks


If you have questions or would like more information, contact terb@worldbank.org.