…. This comes as the country remains heavily endowed with over half of the remaining rainforests in West Africa
Liberia’s vast forest reserve could benefit immensely from the hundreds of millions of dollars pledged for carbon credits at the ongoing African Climate Summit, in Nairobi, Kenya.
According to Rueters News Angecy, investors from the United Arab Emirates (UAE) have made a commitment to buy US$450 million worth of carbon credits from the Africa Carbon Markets Initiative (ACMI), which Liberia is working towards joining.
Also, Climate Asset Management — a joint venture of HSBC Asset Management and Pollination, a specialist climate change investment and advisory firm — announced a US$200 million investment in projects that will produce ACMI credits.
Britain said UK-backed projects worth 49 million pounds (US$62 million) would be announced over the course of the summit.
The country, which is endowed with over half of the remaining rainforests in West Africa and dominated by moist evergreen forests and semi-deciduous forests, has been working to tap into the billion-dollar carbon credits market.
The African Climate Summit, which is being held from Monday until Friday, presents Liberia with golden opportunities to rank in millions which if used properly would propel sustainable development initiatives, protect biodiversity, and elevate the living standards of Liberians living around the vast forest reserves.
African leaders are actively advocating for market-based financing instruments, such as carbon credits or offsets, which can be generated by projects that curb emissions, usually in developing countries, as explained by Rueter.
Carbon credits serve as a means for companies to compensate for emissions they cannot reduce within their own operations, assisting them in achieving climate targets. Each carbon credit represents the mitigation of one ton of carbon dioxide emissions.
In 2021, the offset market was valued at approximately US$2 billion, but a forecast jointly presented by Shell and Boston Consulting Group in January suggested that it could grow substantially, potentially reaching anywhere from US$10 billion to US$40 billion by 2030.
Despite these efforts, many speakers at the summit expressed their frustration with the slow progress in accelerating climate financing for Africa. Investors remain cautious due to perceived risks associated with the continent.
According to a report published last year by the non-profit Climate Policy Initiative, Africa has received only about 12% of the funding it requires to effectively address the impacts of climate change.
Africa, according to the United Nations, contributes just 2 to 3 percent of the world's carbon emissions, yet it remains the continent most profoundly impacted by the consequences of global warming.
Disturbingly, data from the Science Direct database reveals that since the commencement of 2022, over 4,000 lives have been lost, and a staggering 19 million people have been adversely affected by extreme weather events across Africa.
The UN, in a damning 2022 report, also estimated that Africa faces annual losses ranging from US$7 billion to US$15 billion due to the impacts of climate change.
To effectively combat these effects, African nations require an average of $124 billion annually. Regrettably, the funds raised thus far have fallen woefully short, amounting to a mere fraction of the necessary sum, at just $28 billion.
This dire shortfall in funding has raised significant concerns and placed immense pressure on the summit to serve as a pivotal turning point in addressing the critical issue of climate change financing on the continent -- leading to the summit, which has been convened to tackle Africa's escalating vulnerability to climate change -- and its associated economic and environmental toll.
The summit's primary objective is to exert influence on climate commitments, pledges, and outcomes, including the pivotal Nairobi Declaration, which outlines a roadmap for Africa's transition to green energy.
“There hasn't been any success for an African country in attracting climate finance,” said Bogolo Kenewendo, a United Nations climate adviser and former trade minister in Botswana.
Kevin Kariuki, a vice president at the African Development Bank, told Reuters the deals announced on Monday were "very welcome" but not enough.
He said African states would push at the COP28 U.N. climate summit in Dubai, at the end of November, for the expansion of special drawing rights at the International Monetary Fund that could unlock $500 billion worth of climate finance, which could be leveraged up to five times.
The inaugural Africa Climate Summit in Nairobi comes ahead of a flurry of diplomatic meetings leading to the November COP28 climate summit in the United Arab Emirates, which will likely be dominated by clashing visions for the world's energy future.
The three-day event is billed as bringing together leaders from the 54-nation continent to define a shared vision of Africa's green development -- an ambitious aim in a politically and economically diverse region whose communities are among the most vulnerable to climate change.
“Delivering prosperity and wellbeing for Africa's growing population without pushing the world deeper into climate disaster is not an abstract proposition, or mere wishful thinking. It is a real possibility, proven by science,” President William Ruto said in his opening address.
"The overarching theme... is the unparalleled opportunity that climate action represents for Africa," he said.
“For a very long time we have looked at this as a problem. It is time we flipped and looked at it from the other side,” Ruto said.
“We must see in green growth not just a climate imperative but also a fountain of multi-billion-dollar economic opportunities that Africa and the world is primed to capitalise.”
Editor’s note: Additional sources of information came from Reuters News Agency, Al Jazeera, and the New Arab — which are all media institutions covering the Africa Climate Change Summit.