By: Oforiwa Darko
Carbon Credits talks at UN Climate Summit
Ahead of the global stocktake which is gradually moving closer to a conclusion at COP 28 in Dubai, UAE, Climate negotiators representing their countries have been discussing standards for credits that allow their holders to compensate for pollution at home by investing in projects elsewhere to cut emissions or remove carbon dioxide from the atmosphere.
Last year, the Africa Carbon Markets Initiative was inaugurated at COP 27, with the goal to “produce 300 million carbon credits annually by 2030, and 1.5 billion credits annually by 2050. Now, countries are working to agree on frameworks for a new UN-run international market for carbon credits. While this has been slowly taking shape, there are already functioning carbon markets worth more than 865 billion globally.
Emission Reduction Payment Agreement (ERPA) by Ghana and Costa Rica under LEAF Coalition
With focus on restoring forests loss and halting land degradation, Ghana, in addition to investing in nature-based climate solutions, is leveraging on carbon credits as an essential source of financing. Following a letter of Intent signed at COP26 in Glasgow, UK, the Ministry of Lands and Natural Resources at COP 28 in Dubai, UAE, has signed an Emission Reduction Payment Agreement (ERPA) with Emergent Forest Accelerator, under the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition for high-integrity credits.
Ghana’s Minister for Lands and Natural Resources, Mr Samuel A. Jinapor said, his outfit looks forward to working with the LEAF Coalition to scale private sector funding support to tackle deforestation, and build a strong economy, based on a truly sustainable approach.
“While the world’s poorest suffers from the impacts of climate change, we must strive to protect our forests which undoubtedly is an important aspect of the solution to the climate fight as they protect biodiversity, sequester carbon, support livelihoods and promote sustainability. Ghana would therefore not relent in its efforts to explore opportunities in climate financing to conserve, restore and rehabilitate forests” reiterated the Minister for Lands and Natural Resources, Mr Samuel A. Jinapor, while addressing the landmark event at COP 28, in Dubai, UAE.
He further stressed that local communities that depend on forests for their livelihoods should be incentivised to help protect and conserve them, and that underscores the need for a sustainable climate financing.
“Over the past few years, Ghana has had to expend limited resources on the protection of our forests and the implementation of our aggressive afforestation and reforestation programme including the flagships, “Green Ghana Day” under which some 42 million trees have been planted over the last three years and the “Ghana Forest Plantation Strategy” which has led to the restoration of some 690,000 hectares of degraded forests in just five years. This new agreement will complement other interventions being implemented to halt climate change in Ghana” Mr Jinapor added.
The landmark agreement, worth $ 50 million for 5 million tonnes at $10 a tonne, for Architecture for REDD+ Transactions (ART) TREES credits from 2017 to 2019 involves funds from multiple corporate buyers alongside the public sector. This makes Ghana the first country globally, to sign ERPA under the LEAF Coalition. As an approach to rapidly scale finance to support forest governments in their efforts to reverse deforestation, Ghana is expected to supply high-integrity jurisdictional REDD+1 emissions reductions and removals credits to LEAF Coalition buyers.
Costa Rica has also joined Ghana in finalising the Emissions Reductions Purchase Agreements (ERPAs), showing a demonstration of the potential of the LEAF approach to rapidly scale finance to support forest governments in their efforts to reverse deforestation. At least, ten corporate buyers from the LEAF Coalition including Bayer, Capgemini, McKinsey, PwC and Walmart Foundation will purchase credits from the governments of Ghana or Costa Rica. Costa Rica’s agreement is worth up to $14 million at $10 a tonne for ART TREES credits from crediting year 2017. First credits will be issued in 2024, generating much needed finance for these two forest nations and providing high-integrity credits to support corporate buyers’ climate strategies.
I caught up with the Founder and Chief Executive of Emergent, Eron Bloomgarden, whom after 20 years of working in the climate sector, arrived at a cost-effective solution that he believes fits the bill and that is a robust market for carbon credits tied to tropical forests. He touched on the rapid ramp-up of the voluntary carbon market over the last 18-24 months, and institutional progress of Emergent’s LEAF Coalition, connecting corporates with jurisdictional REDD+ carbon credits through forward purchase agreements. Eron Bloomgarden expressed optimism about Ghana and Costa Rica’s drive and commitment to ensuring that an agreement was reached to help fast track their efforts in addressing climate change, hence protecting livelihoods, while safeguarding biodiversity.
Bloomgarden said Emergent believes it has created an approach that works for all parties, by providing much needed funding to forest governments, involving indigenous people and local communities to ensure their rights are recognised by receiving a fair share of the benefits while giving corporate buyers confidence in the integrity and quality of the credits.
“Buying carbon credits is a great tool that companies can use to help meet net-zero goals, compensating for emissions elsewhere in their operations, however, there is the need for companies participating in LEAF to remain committed to deep voluntary cuts in their own greenhouse gas emissions, in line with science-based targets as well as be consistent with the long-term temperature goals of the Paris Agreement”, Eron Bloomgarden emphasised.
“Ghana is the first African country to sign this agreement, and this is a great move to promote the protection of Africa’s forests” he added.
“I have two little boys at home and when you ask them about the best thing you can do for the environment, they would say “plant a tree”. I think most grownups would also agree to planting of trees, well it is absolutely true but while we do this, we should also focus on investing in serious climate strategies to deal with deforestation which is actually an enormous contributor to climate change”.
Results-Based Payments to Ghana and Costa Rica
Proceeds from credit sales represent results-based payments to Ghana and Costa Rica and will be channelled to different stakeholders according to the benefit sharing plans developed by the two governments through extensive stakeholder consultation. Payments will be made to final beneficiaries via financial intermediaries, in line with the LEAF Coalition’s robust framework for fund monitoring, compliance and reporting. The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition aims to scale what is expected to become one of the largest ever public-private efforts to help protect tropical forests, to the benefit of billions of people depending on them, and to support sustainable development.
Ghana’s Cocoa Forest REDD+ Program (GCFRP), developed with the World Bank’s Forest Carbon Partnership Facility (FCPF), is the world’s first commodity-based emissions reductions program. It focuses on six priority cocoa production areas, aiming to reduce emissions from deforestation and forest degradation whilst improving smallholder farmers’ livelihoods. LEAF proceeds will be used to scale up the program, rewarding local communities that have been historic guardians of the forest, supporting farmer organisations to improve yields without encroaching on forests, and implementing long-term policies to halt and reverse deforestation. Under existing REDD+ benefit sharing plans, 69% of REDD+ proceeds are to be distributed to local communities.
Carbon credit purchases
Carbon credits are vital for putting a price on carbon, reducing emissions, and building resilient economies but experts say strict supervision and regulation is essential to ensure trust and functionality. The credit purchases linked to cuts in the carbon dioxide emitted by burning fossil fuels and deforestation could create “the largest marketplace the world will have ever known”, said US climate envoy John Kerry, at COP 28.
Saving Ghana’s Forests
Ghana is deepening its resilience capacity to address the drivers of deforestation and forest degradation, such as agriculture, illegal mining, illegal logging, and wildfires.
To adapt to climate change, measures are being put in place to improve early warning systems, promote climate-resilient agriculture, restore degraded lands and protect coastal zones to achieve its vision by about 64 million tonnes by 2030.
