By Bernard Gitau
The recent endorsement of global carbon market standards under Article 6.4 during COP29 in Baku marks a significant development in climate finance and carbon emissions trading, especially beneficial for developing countries like Kenya. This standard allows countries to trade carbon emission reductions, aiming to accelerate the implementation of climate action plans through financial support and accessible carbon markets.
UN Climate Change Executive Secretary Simon Stiell emphasized that carbon markets could enable faster, cost-effective climate progress, though substantial emissions cuts are still necessary this decade. The International Energy Agency (IEA) projects $2 trillion in clean energy investment in 2024, but it highlights that this is only a fraction of the financial support needed globally, with most investment concentrated in larger markets. Stiell and others argue that these funds must reach developing nations to improve lives and fight climate change.
Kenya, which updated its Climate Change Act in 2023, is well-positioned to benefit from this framework. The updated Act provides governance for carbon markets, including the creation of subsidiary regulations like Carbon Markets and Trading Regulations. Kenya’s 2020–2030 Nationally Determined Contributions (NDC) target a 32% reduction in greenhouse gas emissions, with 79% of the cost for this reduction expected to come from international support, particularly through financial and technological partnerships.
Critics, however, have raised concerns about the procedural rush in implementing these standards, arguing it leaves insufficient time for debate, and some are skeptical of carbon removal strategies that may allow high-emission entities to delay meaningful reductions. The approved standards will align with voluntary carbon markets, potentially broadening their adoption and supporting diverse carbon removal projects.
Mukhtar Babayev, President of COP29, hailed this as a landmark in efficiently matching carbon market buyers and sellers, with potential cost savings of $250 billion annually for NDC implementation. While this move could streamline funding to developing nations, environmental advocates caution that more regulatory oversight is essential to protect against environmental and human rights risks.
