Carbon capture and trading is rapidly gaining traction worldwide as nations strive to curb carbon emissions, aiming to foster conservation and transition towards greener energy practices.
This process revolves around a three-step approach: capturing carbon dioxide produced by power generation or industrial activities like steel or cement production, transporting it, and then storing it deep underground. On a global scale, the carbon trading economy reached a valuation of $87.9 billion in 2022 and is projected to experience a 14 percent growth between 2023 and 2032, as reported by the Global Market Insights Magazine.
Essentially, every nation stands to gain from embracing this emerging field of knowledge. This burgeoning demand for carbon capture, utilization, transport, and storage is fueled by the imperative to boost operational efficiency, reduce maintenance requirements, and bolster safety measures in the battle against global warming.
Consequently, captured carbon finds diverse applications across industries. In construction, it proves invaluable for manufacturing panels, insulations, and roofing materials. In transportation, it contributes to crafting lightweight and durable components for automobiles, trains, and aircraft. Additionally, within the wind energy sector, it is instrumental in fabricating wind turbine blades.
Having looked at these carbon opportunities, Tanzania Mainland enacted the Tanzania Carbon Trade Regulations 2022, aimed at enhancing environment conservation, but also tap into various opportunities associated with the carbon resource.
Thus, by July 2022, a local firm Simba Gas, was already eying the share of carbon global market with an aim of exporting it to the neighboring countries including; Malawi, Zambia, DR Congo, Mozambique and many other countries.
According to Tanzania government, carbon regulation and trading has already attracted over $1billion (Sh2.3trillion) which will be mobilized annually through carbon trading across the nation. This means that carbon trade, would not only be crucial in bringing in foreign exchange earnings to the country, but it could as well create huge employment opportunities to the majority jobless youths, thereby boosting the country’s economic growth.
Numerous carbon credit deal trades as well, has been signed by Tanzania by December last year (2023) on land-based carbon, covering six national parks, spanning 1.8million hectares. These deals works as a pivotal mechanism in the global fight against climate change.
These credit deals, which permit firms the right to emit one ton of carbon dioxide or its equivalent, have not only provided a means to curb greenhouse gas emissions but have also unlocked avenues for economic development, especially in regions endowed with unique environmental attributes.
The global carbon credit market, established under mechanisms like the Kyoto Protocol better known as Clean Development Mechanism (CDM) and the Paris Agreement mechanisms, allow countries or regions to earn credits by reducing emissions or sequestering carbon.
With this growth potential, carbon credits offer a promising opportunity to leverage natural resources, such as vast coastlines and diverse marine ecosystems, and a space for island economies like Zanzibar to generate revenue and promote sustainable development.
While Tanzania Mainland has moved a step further into the carbon credit activities by enacting the regulation, and its associated guidelines, in Zanzibar, the carbon credit activities have been undergoing a piloting of Reducing Emissions from Deforestation and Forest Degradation (REDD) under the Conservation of Natural Forests, dubbed, Hifadhi ya Misitu ya Asili, (HIMA), a project implemented by CARE International with support from the Department of Forestry and other partners.
Although the actual trading has not been fully realized since the implementation of HIMA and realization of the carbon trade potential for community’s livelihood development, Zanzibar has a significant potential to benefit from carbon trading due to its growing economy which demands for more energy.
This, creates an opportunity for the Isles to invest in low-carbon development and to generate carbon credits that can be sold to international buyers, thereby generating revenues to both the government and the private sector. This revenue could also be used to invest in low-carbon development projects such as renewable energy and energy efficiency.
Carbon trading can also help Zanzibar’s reputation in environment conservation by ensuring it meets its climate change Sustainable Development Goals (SDGs) commitments by 2030 which could lead to attract more investment in renewable green initiatives.
The Isles also stand to benefit from carbon trading through job creation, thereby boosting the economy. Thus, low-carbon development projects could create construction, manufacturing and maintenance jobs whereas the sale for carbon credit could generate foreign exchange to the government, providing a pathway for technological advancements and innovation in clean energy solutions.
Zanzibar could as well gain significant economic opportunities through the sale of carbon credits generated from its efforts to reduce deforestation and forest degradation, providing a boost to the economy, thus contributing to sustainable development. This means that the revenue generated from the sale of carbon credits could as well be reinvested into other sustainable development projects like improving infrastructure or promoting eco-tourism.
In summary, Zanzibar stands to reap significant economic benefits through active participation in the carbon economy, including economic diversification away from traditional sectors like tourism and agriculture.
This move would create a more resilient economy, ensuring long-term sustainability and prosperity for its populace, while also fortifying the Blue Economy. It is imperative for Zanzibar to seize the opportunities presented by carbon trading to fully capitalize on its potential.
One step towards this would be to establish a comprehensive carbon credit framework, delineating rules and procedures for engagement in carbon credit activities, thereby instilling confidence in both local communities and potential investors.
Conducting a feasibility study to identify viable projects capable of generating carbon credits is another crucial undertaking. This would involve assessing the potential of renewable energy projects, forestry initiatives, and other sustainable practices aimed at reducing greenhouse gas emissions.
Furthermore, community awareness programs should be implemented to promote carbon credit trading for the betterment of livelihoods. Educating local communities about the benefits of participating in carbon credit activities and their positive impact on livelihoods is paramount. By implementing these measures, Zanzibar can foster an environment conducive to carbon credit activities, attract investment, promote sustainable development, and contribute to global climate change mitigation efforts
International Development. (Private Sector Development, Innovation & Enterprenuership, Governance & Leadership).
