Malawi Accelerates in Carbon Market Participation

Malawi Accelerates in Carbon Market Participation

In the heart of Africa, Malawi is making strides in harnessing the potential of carbon markets for sustainable development and climate action. The country's natural resources, particularly its forests and land, are becoming valuable assets in the global fight against climate change.

Mphatso Thawe, the Project Manager of Total Landcare, is spearheading a carbon project in the northern district of Mzimba through the Restore Africa Project. This initiative empowers local landowners to earn carbon credits for the carbon stored on their property, marking a significant step towards Malawi's carbon-neutral future.

Yusuf Nkungula, Secretary for Natural Resources and Climate Change, considers carbon credits as one of Malawi's lifelines. The World Bank estimates that Malawi can earn between US$25-70 million per year from its forest carbon, while a more ambitious estimate values Malawi's potential carbon credits at 19,882,395 metric tonnes per annum, translating into over US$600 million per annum.

Malawi has already generated K300 million (US$150,000) through carbon trading, with earnings realised from the sale of approximately 75,000 carbon credits. The country's forests, covering over 1 million hectares of designated reserves and the same number of hectares under wildlife conservation parks and reserves, are a significant resource for carbon trading.

One of the key initiatives in Malawi's carbon trading journey is the implementation of projects under the Green Development Mechanism and the Reducing Emissions from Deforestation and Degradation in Developing Countries (REDD+) initiative. These projects are expanding under new international carbon trading frameworks, notably through clean cookstove and large-scale reforestation initiatives.

For instance, a major forestry reforestation project in Malawi has secured authorization to expand from 6,000 to approximately 100,000 hectares. This project, set to be certified under Verra’s VM0047 methodology and to issue credits aligned with Article 6 of the Paris Agreement and the Integrity Council for Voluntary Carbon Markets (ICVCM), demonstrates Malawi's utilization of REDD+ type efforts for carbon trading growth.

However, challenges lie ahead. Research indicates that carbon pricing and electricity price hikes in Malawi have led to increased firewood consumption, potentially paradoxically raising emissions unless balanced by targeted interventions. To address this, suggestions include recycling carbon tax/spending revenues into green investments or direct transfers to women, who disproportionately bear the burden of increased firewood collection.

To maximize carbon market income, Malawi can expand and scale forestry and land use projects, implement complementary policies, strengthen domestic institutional capacity, and leverage emerging voluntary carbon markets. By doing so, Malawi can ensure a sustainable and equitable carbon emission reduction strategy, thereby maximizing its potential income from carbon markets.

The Malawi University of Business and Applied Sciences (MUBAS) vice chancellor, Ishmael Kossamu, believes that Malawi has not maximized its potential income from carbon trading due to a lack of a robust and comprehensive legal framework. To address this, Malawi finalized the Malawi Carbon Regulatory Framework in 2023, a legislation designed to facilitate the implementation of carbon trading projects.

The African Carbon Market Initiative (ACMI), launched in recent years, aims to mobilize up to US$100 billion carbon credits per year by 2050, making climate finance available for African countries and spurring increased access to clean energy and sustainable development.

In conclusion, Malawi is actively engaged in carbon trading and emissions reduction initiatives, particularly through pilot and scaling projects in renewable energy, clean cooking, and forestry-related carbon credit generation under emerging international frameworks. By addressing energy access and social equity challenges linked to carbon pricing and growing credible, transparent carbon credit projects in forestry and clean energy sectors, Malawi can ensure a sustainable and equitable carbon emission reduction strategy, thereby maximizing its potential income from carbon markets.

1. Mphatso Thawe, working under the Restore Africa Project, is helping Malawi's carbon-neutral future by implementing a carbon project in Mzimba, which allows local landowners to earn carbon credits for the carbon stored on their property.
2. Yusuf Nkungula views carbon credits as a lifeline for Malawi, with the potential to generate annual revenues of over US$600 million from carbon trading, particularly from forest carbon.
3. The Malawi University of Business and Applied Sciences (MUBAS) vice chancellor, Ishmael Kossamu, believes that Malawi can maximize its potential income from carbon trading by addressing the lack of a robust and comprehensive legal framework, as finalized with the Malawi Carbon Regulatory Framework in 2023.

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