Benin Hosts Climate Finance Conference to Boost Carbon Trading
On 16 July 2024, Benin, in collaboration with the International Monetary Fund (IMF), hosted an International Roundtable on #ClimateFinance. The objectives were twofold: firstly, to explore innovative climate finance instruments, and secondly, to come up with a comprehensive strategy in context of the Nationally Determined Contribution (#NDC) at the upcoming #COP29 in Baku, Azerbaijan.
Government officials, financiers, development partners, stakeholders from private sector and civil society took part in the Roundtable. According to the World Bank, Benin is among the smallest polluters globally with 0.05% of total Greenhouse Effect Gases (#GHEG) emitted. Being a coastal state in West Africa bordering on the Atlantic Ocean, Benin is particularly vulnerable to the rise of the ocean and other negative impact of #ClimateChange.
Benin is widely recognized as a torch bearer in terms of policies around Climate Change and Climate Financing in the region. By its own estimates, Benin believes it will need at least USD 10 billion by 2030 to achieve the goals set in its NDC. In particular, Benin aims to reduce emissions by at last 20% by 2030 and has actively looking at carbon credit as a viable form of financing for climate action.
Since its adherence to the Paris Agreement during COP21, Benin has issued two decrees in 2022 in order to access climate finance via the carbon exchange. The scheme is under the Ministry of Environment of Benin.
At the moment, the authorities are accounting the amount of carbon credits which Benin can exchange in return for financing. The first apportionment will comprise of 2.5 millions carbon credits derived from a sustainable agribusiness project. The United Nations is engaged to validate the first ever carbon trading by Benin.
In addition, Label Gold Standard, an independent and private environmental audit firm, has signed an agreement with the Government of Benin to assist in technical matters of the Carbon Market.
However, a lot of work remains to be done. According to a recent study, the ECOWAS region issued on 9% of the total Voluntary Carbon Credits (VCC) in Africa between 2010 and 2023. The figure represents one-third of #VCC issued by Kenya, which is one of the leaders in Carbon Trading.
According to the Africa Carbon Markets Initiative (ACMI), African countries only managed to monetize the equivalent of 22 megatonnes of CO2 in 2021, generating a paltry USD 132 million in #ClimateFinance. On the other hand, some experts believe that Africa has the potential to readily mobilize USD 6 billion on the #CarbonCredit markets.
It is worth recalling that at the end of 2023, the IMF approved an envelope of USD 200 million to reinforce resilience to #ClimateChange in Benin. The Roundtable is part of a series of meetings leading up to COP29 in Azerbaijan later this year.