In a significant development, the Climate Change (Amendment) Act,2023 was assented to on 1st September 2023. This landmark piece of legislation is designed to amend the existing Climate Change Act of 2016, with a dual purpose:
bolstering the response to climate change; and
ushering in regulatory measures for carbon markets.
A central facet of this legislation is its role in regulating carbon markets, an essential instrument in the fight against climate change. By providing a framework for the trade of carbon credits, the bill encourages activities that reduce greenhouse gas emissions, a pivotal step in curbing climate-altering pollutants. Having come into effect on 15th September 2023, what significant changes does the 2023 Amendment bring?
Significant changes in the Climate Change (Amendment) Act, 2023
At Section 2, the Act introduces and defines new terms that it intends to bring into the realm of the climate change regulation. Some of the terms introduced and defined include:
Carbon Market which is a mechanism that facilitates the transfer and exchange of units related to emission reductions, mitigation results, or outcomes achieved through carbon-related initiatives, products, programs, and projects by both public and private entities.
Carbon Credits that represent a unit of credit generated when the equivalent of one metric tonne of carbon dioxide is prevented from entering the atmosphere. It equates to one tonne of carbon dioxide or an equivalent amount of another greenhouse gas that has been reduced, sequestered, or avoided.
Carbon Budget as the allowable quantity of greenhouse gas emissions deemed acceptable over a specified timeframe. It is determined based on the National Greenhouse Gas Inventory and serves as a guideline for allocating emission reductions for Nationally Determined Contributions or other purposes in line with the guidance, rules, modalities, and procedures of the Conference of the Parties under the Paris Agreement.
Carbon Offset referring to a reduction or removal of carbon dioxide or other greenhouse gas emissions undertaken to balance out an equivalent quantity of emissions produced elsewhere.
Carbon Standards as a comprehensive set of established regulations, processes, and methodologies that govern the generation and issuance of certified carbon credits.
Carbon Projects that encompass various interventions, including programs, initiatives, projects, and products designed to either remove, reduce, sequester, or prevent carbon emissions.
Tonnes of Carbon Dioxide Equivalent defined as an amount of carbon dioxide emissions expressed in metric tonnes that would result in the same cumulative radiative forcing or temperature change, over a specified time frame, as an emitted quantity of a greenhouse gas or a mixture of greenhouse gases.
Voluntary carbon market, as defined, is a marketplace where private investors, governments, non-governmental organizations, and businesses voluntarily engage in the buying and selling of carbon credits that represent certified removals or reductions of greenhouse gas emissions in the atmosphere.
Mitigation Outcomes denote reductions in greenhouse gas emissions with a global warming potential equivalent to one tonne of carbon dioxide. These reductions are measured and verified in accordance with established standards.
At Section 3 the Act expands the definition of “climate change responses” to include non-market approaches, such as adaptation measures and capacity building. This is important because it recognizes that there is no single solution to climate change and that a variety of approaches are needed.
At Section 6, and in amending Section 8 of the principal Act, the Act goes on to clarifies the role of the Designated National Authority (DNA) in the regulation of the carbon markets. The DNA is now responsible for developing and implementing regulations for carbon credit projects, as well as registering and monitoring these projects. This will help to ensure that the carbon markets are transparent and can be accounted for in the National Carbon Registry Established by Section 23G of the Act. Further, the registry is open to access by the general public and this is intended to bolster climate finance initiatives in the country by providing assurance to investors engaged in carbon markets.
The Act at Section 23D introduces and requires all land-based projects undertaken pursuant to the Act to undergo a Reduced Emissions from Deforestation and Forest Degradation (REDD+) safeguard standards assessment. This is important because it will help to ensure that these projects do not contribute to deforestation or forest degradation.
Notably, Section 23C of the Act confers authority upon the Cabinet Secretary in charge of environmental matters to engage in carbon trading on a bilateral or multilateral basis. This means that, with Cabinet approval, the country can participate in agreements with other nations or entities to exchange carbon credits for tangible emissions reductions and removals. Such agreements are pivotal in facilitating international collaboration to combat climate change, underlining the nation’s commitment to addressing this pressing global issue.
Further, at Section 23E, the Act Furthermore, the Act goes on to extend safeguards for community resources by mandating that all land-based projects conducted in under the Act must be executed via a Community Development Agreement. This agreement delineates the interactions and obligations of the project’s proponents concerning the public and community land where the project is situated. This provision serves to protect, and support affected communities, as it compels projects to align with Kenya’s international obligations and strive to enhance the environmental, economic, social, and cultural welfare of the surrounding community.
The Kenyan Climate Change (Amendment) Act, 2023 is a significant piece of legislation that will help the country to meet its climate change obligations under the Paris Agreement. The Act is expected to have a positive impact on Kenya’s economy and environment. The regulation of the carbon markets will create new opportunities for businesses and investors, while the implementation of climate change policies and strategies will help to reduce greenhouse gas emissions and mitigate the effects of climate change. The Act also recognizes the importance of community participation in climate change action, which will help to ensure that the benefits of climate change mitigation and adaptation are shared equitably.
Otieno R. – Associate
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