EXPLAINER: Communities to earn 25% from carbon trading projects: What you need to know about the Climate Change (Amendment) Bill, 2023.

The Climate Change (Amendment) Bill, 2023 which is currently at the public participation stage, seeks to introduce carbon market guidelines.

Carbon market - a mechanism that enables and allows public and private entities to transfer and transact emission reduction units, mitigation outcomes or offsets generated through carbon initiatives, programmes and projects. Simply put, trading systems in which carbon credits are sold and bought. 

The key issues in the Bill are:

1.     Establishment of a National Carbon Registry which will contain records of carbon credit projects and programmes implemented to reduce greenhouse gas emissions in Kenya. The registry will be in the custody of the Climate Change Directorate which will be established if the Bill sails through.

 2.     25 percent of earnings from carbon trading will be given to the hosting community.

 3.     A community development agreement with project proponents shall be recorded in the National Carbon Registry.

 4.     The Climate Change Directorate, set to be domiciled at the state Department for the time being, will be dealing with climate change issues.

 5.     The Directorate shall be the government's lead agency on national climate change plans and actions to deliver operational coordination and shall report to the Cabinet Secretary.

 6.     Transactions in carbon trading shall aim towards a reduction of greenhouse gas emissions as per the prescribed carbon standards;

 7.     Mitigation outcomes shall be accounted for in tonnes of carbon dioxide equivalent. Carbon offset projects shall ensure that emissions are kept out of the atmosphere for a reasonable time.

 8.     Carbon trading projects shall be required to undergo an environmental and social impact assessment in accordance with the Environmental Management and Coordination Act.

 9.     A project undertaken shall specify the anticipated environmental, economic or social benefits of the project.

 10.    Every project undertaken pursuant to this Act shall be implemented through a community development agreement which shall outline the relationships and obligations of the proponents of the project with impacted communities.

 11.   The National Government and the respective county government where the project is situated shall oversee and monitor the negotiation of the community development agreements with project proponents and the stakeholders.

 12.   A community development agreement shall provide— (list of stakeholders of the project including project proponents, the impacted communities, the National Government and the county government) where the project is being undertaken.

The Ministry of Environment, Climate Change and Forestry is currently receiving comments until May 26, 2023.