Afdb
13.11.2024
(source : Afdb)
Today, several African countries are giving away their vast amounts of land to carbon credits. While this may generate some short-term financing, it needs to be understood that Africa is a carbon price taker and therefore is short-changed. While the price of carbon in Europe is high and could be as high as $200 per ton because of the strict EU Emission Trading Standards, carbon price in Africa could be as low as $3 to $10 per ton.
The proper valuation of Africa’s green wealth will increase access to financial flows, in part because credit ratings agencies will be able to incorporate the true value of overall asset class, which in turn could improve countries’ risk profile.
Therefore, it is time for Africa’s green environmental assets to be properly priced to allow the continent to turn its massive green assets into wealth, through their inclusion in “green’ GDP for Africa. This will raise massive financial resources for the continent, spur greater green investments and provide better policies for the greening of African economies for sustainable development. The significantly higher revenues that Africa will generate from the proper valuation of its carbon sinks and environmental services will also allow it to be able to service its debts, assuring debt sustainability.
