Carbon Market Opportunities for the Forestry Sector of Africa

From Open Energy Information


"In the report, suggestions are presented for developing a strong land use carbon project sector that will produce an increasing quantity of projects with associated income generation, development benefits and environmental and social cobenefits. Many of these recommendations are aimed at reducing the barriers facing project creation.

Recommendation 1: Create a positive legislative and regulatory environment

Carbon project development can interact with many sectors of the economy and regulatory environment. By examining the legislative system, regulations that complicate or hinder project formation, approval, and registration can be identified and altered where appropriate. Successful carbon credit formation, issuance, and trading will require credit sellers to explicitly demonstrate their rights to carbon credit sale. Regulations can be put in place that guarantee project developers ownership of the carbon rights. Project costs and project uncertainty have been increased worldwide by overly burdensome country-approval process. An attractive investment and project development climate exists where countries view themselves as partners in the aims of carbon projects and maintain streamlined processes that facilitate the bureaucracy associated with carbon project approval and registration.

Recommendation 2: Develop incentives for project implementation

Financing is a hurdle that excludes many potential land use carbon projects. The administrative capabilities and strengths of governments could assist project finances and could develop and maintain new sources of money. The economic, social and environmental benefits that will arise from carbon projects argue for direct government involvement. Potential financial assistance that governments could give to projects include:

  • Tax incentives for projects
  • Low interest loans for project development
  • Direct grants for project development
  • Encouragement of ODA investment in carbon projects
  • Encouragement of multinational companies to invest in carbon projects in countries where they have a large presence as part of their GHG portfolios
  • Project development technical assistance
Recommendation 3: Conduct analyses to identify opportunities

It is important for Governments to understand what form of land use project (conservation,forest management, agricultural management, tree planting) offers the most potential for successful carbon projects. An analysis should also identify where in the country projects would be optimally located.Increasing economic opportunity, sustaining natural resources, and protecting the environment.An analysis should examine the economics of potential carbon projects including costs of implementing projects and likely carbon income from projects. This analysis should include an evaluation of the opportunity costs of ceasing current activities and therefore how such changes would impact local income generation at the short and long term. The analysis would also focus on likely benefits to the local community, and impacts on the environment such as effects on water supply, erosion and biodiversity. The output from such an analysis should be a list of potential project activities and regions in the country where projects could be most successfully implemented.

Recommendation 4: Develop a carbon project extension service

A critical component of a successful national carbon program is expertise. Government carbon project extension experts can assist project designers and ensure positive project implementation. Extension experts could be selected from existing Government employees with a training in forestry and/or agriculture, or could be hired from an existing successful carbon project in the country. Trainings will guarantee extension officers have current and complete knowledge.

Recommendation 5: Conduct carbon project training sessions

Training is important for extension officers and also to generally build the capacity of the project development sector. Training sessions held centrally or regionally in countries could facilitate the process of private sector involvement in carbon projects. The training would cover:

  • How to develop project ideas
  • How to attain carbon project financing
  • How to establish the project baseline
  • How to monitor the project
  • How to register, validate and verify the project
Recommendation 6: Create guidance documents

Guidance documents giving country-specific advice on project development, project implementation and project monitoring will give confidence to project developers and will reduce the need for project to hire consultants from overseas. Providing guidance on best land management practices that are simple to implement and have proven success will allow a greater number of people to be able to participate in carbon project creation.The development of carbon projects in the agriculture, land use, and forestry sector of Africa has a large amount of potential for financial generation, environmental and sustainability improvement, and social benefits. Although there are challenges, by following the recommended trajectory, governments have a greater chance of overcoming challenges while at the same time maximizing the benefits this new carbon market creates."


  1.  "Carbon Market Opportunities for the Forestry Sector of Africa"